Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Feb. 28, 2014 | Apr. 09, 2014 | |
Document And Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 28-Feb-14 | ' |
Entity Registrant Name | 'SARA CREEK GOLD CORP. | ' |
Entity Central Index Key | '0001415286 | ' |
Current Fiscal Year End Date | '--08-31 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 39,386,703 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Feb. 28, 2014 | Aug. 31, 2013 |
Current assets | ' | ' |
Cash | $74,287 | $8,298 |
Accounts receivable | 11,801 | 18,755 |
Inventory | 9,841 | 7,064 |
Prepaid expenses | 17,920 | 2,658 |
Total current assets | 113,849 | 36,775 |
Fixed assets: | ' | ' |
Machinery and equipment, net of accumulated depreciation of $17,245 and $15,179, respecitvely | 14,619 | 13,156 |
Other assets: | ' | ' |
Capitalized oil and gas properties, net of accumulated depletion of $71,209 and $59,878, respectively | 578,959 | 297,590 |
Deposits | 5,000 | ' |
Total assets | 712,427 | 347,521 |
Current liabilities: | ' | ' |
Accounts payable and accrued expenses | 202,818 | 31,018 |
Net profits interest payable, current portion | 16,643 | 12,109 |
Loans payable to related parties, short term | 13,000 | ' |
Total current liabilities | 232,461 | 43,127 |
Long term liabilities: | ' | ' |
Loans payable to related parties, long term | 90,572 | 89,833 |
Asset retirement obligations | 140,819 | 103,299 |
Net profits interest payable, long term portion | 138,874 | 112,488 |
Total long term liabilities | 370,265 | 305,620 |
Total liabilities | 602,726 | 348,747 |
Stockholders' equity: | ' | ' |
Common stock; $0.001 par value; 750,000,000 shares authorized, 35,736,983 shares issued and outstanding | 35,737 | ' |
Common stock payable | 40,000 | ' |
Additional paid in capital | 637,714 | 350,000 |
Accumulated deficit | -603,750 | -351,226 |
Total stockholders' equity (deficit) | 109,701 | -1,226 |
Total liabilities and stockholders' equity | $712,427 | $347,521 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Feb. 28, 2014 | Aug. 31, 2013 |
CONDENSED CONSOLIDATED BALANCE SHEETS [Abstract] | ' | ' |
Accumulated depreciation of machinery and equipment | $17,245 | $15,179 |
Capitalized oil and gas properties accumulated depletion | $71,209 | $59,878 |
Common stock, par value per share | $0.00 | $0.00 |
Common stock, shares authorized | 750,000,000 | 750,000,000 |
Common stock, shares issued | 35,736,983 | ' |
Common stock, shares outstanding | 35,736,983 | ' |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | Feb. 28, 2013 | |
Revenue: | ' | ' | ' | ' |
Oil revenues | $18,348 | ' | $44,112 | $23,425 |
Expenses: | ' | ' | ' | ' |
Direct operating costs | 8,020 | 14,580 | 20,992 | 26,874 |
Depletion, depreciation and amortization | 7,847 | 3,912 | 15,957 | 11,469 |
Professional fees | 121,972 | 630 | 193,043 | 1,747 |
General and administrative expenses | 53,665 | 995 | 59,896 | 1,789 |
Total expenses | 191,504 | 20,117 | 289,888 | 41,879 |
Net operating (loss) | -173,156 | -20,117 | -245,776 | -18,454 |
Other expense: | ' | ' | ' | ' |
Interest expense | 3,335 | 3,250 | 6,748 | 6,569 |
Total other expense | 3,335 | 3,250 | 6,748 | 6,569 |
Loss before income taxes | -176,491 | -23,367 | -252,524 | -25,023 |
Provision for income taxes | ' | ' | ' | ' |
Net loss | ($176,491) | ($23,367) | ($252,524) | ($25,023) |
Net loss per common share - basic and diluted | ($0.01) | ' | ($0.01) | ' |
Weighted average common shares outstanding - basic and diluted | 31,376,427 | 5,544,561 | 24,477,454 | 5,403,939 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 6 Months Ended | |
Feb. 28, 2014 | Feb. 28, 2013 | |
Cash flows from operating activities: | ' | ' |
Net loss | ($252,524) | ($25,023) |
Depletion, depreciation and amortization | 11,342 | 7,422 |
Accretion of asset retirement obligation | 4,615 | 4,046 |
Accretion of net profits interest liability | 6,009 | 6,569 |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Accounts receivable | 8,507 | 11,064 |
Inventory | 714 | -7,954 |
Prepaid expenses | 1,363 | 2 |
Accounts payable and accrued expenses | 16,134 | 10,010 |
Net cash provided by (used in) operating activities | -203,840 | 6,136 |
Cash flows from investing activities: | ' | ' |
Cash acquired in Sara Creek acquisition | 6,004 | ' |
Acquisition of an additional working interest in DEEP Lease | -200,000 | ' |
Cash acquired in Hawker acquisition | 1,214 | ' |
Net cash provided by (used in) investing activities | -192,782 | ' |
Cash flows from financing activities: | ' | ' |
Net proceeds from unit offering | 434,524 | ' |
Proceeds from unit offering to be closed | 40,000 | ' |
Payments on net profits interest agreement | -11,913 | -11,995 |
Net cash provided by (used in) financing activities | 462,611 | -11,995 |
Net change in cash | 65,989 | -5,859 |
Cash, beginning | 8,298 | 7,822 |
Cash, end | 74,287 | 1,963 |
Supplemental disclosure of cash flow information: | ' | ' |
Interest paid | 6,009 | 6,569 |
Units issued to settle accounts payable | $22,500 | ' |
CONDENSED_STATEMENT_OF_STOCKHO
CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY (USD $) | Total | Common Stock [Member] | Common Stock Payable [Member] | Additional Paid-in Capital [Member] | Accumulated Equity [Member] |
Balance at Aug. 31, 2012 | $40,765 | ' | ' | $350,000 | ($309,235) |
Balance, shares at Aug. 31, 2012 | ' | ' | ' | ' | ' |
Net loss | -41,991 | ' | ' | ' | -41,991 |
Balance at Aug. 31, 2013 | -1,226 | ' | ' | 350,000 | -351,226 |
Balance, shares at Aug. 31, 2013 | ' | ' | ' | ' | ' |
Recapitalization on completion of acquisition of SCNRG | 1,626 | 25,962 | 2,000 | -26,336 | ' |
Recapitalization on completion of acquisition of SCNRG, shares | ' | 25,961,983 | 2,000,000 | ' | ' |
Issued to acquire Hawker | -135,199 | 3,000 | ' | -138,199 | ' |
Issued to acquire Hawker, shares | ' | 3,000,000 | ' | ' | ' |
Issuance of common stock payable | ' | 2,000 | -2,000 | ' | ' |
Issuance of common stock payable, shares | ' | 2,000,000 | -2,000,000 | ' | ' |
Net proceeds from unit offering | 457,024 | 4,775 | ' | 452,249 | ' |
Net proceeds from unit offering, shares | ' | 4,775,000 | ' | ' | ' |
Proceeds received for common stock payable | 40,000 | ' | 40,000 | ' | ' |
Proceeds received for common stock payable, shares | ' | ' | 400,000 | ' | ' |
Net loss | -252,524 | ' | ' | ' | -252,524 |
Balance at Feb. 28, 2014 | $109,701 | $35,737 | $40,000 | $637,714 | ($603,750) |
Balance, shares at Feb. 28, 2014 | 35,736,983 | 35,736,983 | 400,000 | ' | ' |
DESCRIPTION_OF_BUSINESS
DESCRIPTION OF BUSINESS | 6 Months Ended |
Feb. 28, 2014 | |
DESCRIPTION OF BUSINESS [Abstract] | ' |
DESCRIPTION OF BUSINESS | ' |
1. DESCRIPTION OF BUSINESS | |
Sara Creek Gold Corp. ("we", "our", "us", "SCGC" or "the Company") was incorporated under the laws of the State of Nevada on June 12, 2006, under the name of Uventus Technologies Corp. On September 23, 2009, we merged with our wholly owned subsidiary and changed our name to Sara Creek Gold Corp. | |
On October 25, 2013, we closed on the Agreement and Plan of Reorganization with SCNRG, LLC ("SCNRG"), a California limited liability company, whereby we acquired 100% of the membership interest in SCNRG, resulting in SCNRG becoming a wholly-owned subsidiary of SCGC, in exchange for 14.0 million shares of our common stock issued to the members of SCNRG (see Note 3). For accounting purposes, the acquisition of SCNRG by SCGC has been accounted for as a recapitalization of SCGC. Accordingly, SCNRG is considered the acquirer for accounting purposes and, therefore, the historical financial statements are SCNRG's, consolidated with SCGC's beginning October 25, 2013. As a result of this transaction, SCGC changed its business direction and is now in the oil and gas industry. Our goal is to acquire and develop mature leases, interests and other rights to oil and gas producing properties with proven undeveloped potential. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Feb. 28, 2014 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | |
The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and the rules and regulations of the United States Securities and Exchange Commission ("SEC") for interim financial information. | |
The unaudited interim financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended August 31, 2013, which contains the audited financial statements and notes thereto for SCGC. Additionally, the Company's Amendment No. 1 to Current Report on Form 8-K/A filed with the SEC on December 24, 2013, contains the audited financial statements and notes thereto for the years ended August 31, 2013 and 2012 for SCNRG. | |
Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The interim results for the six months ended February 28, 2014 are not necessarily indicative of results for the full fiscal year. | |
Principles of Consolidation | |
The acquisition of SCNRG by SCGC on October 25, 2013, has been accounted for as a recapitalization of SCGC and SCNRG is considered the acquirer for accounting purposes. Therefore, our condensed consolidated financial statements include the historic accounts of SCNRG, and from the date of our acquisition of SCNRG on October 25, 2013, include the accounts of SCGC. | |
On January 1, 2014, we acquired all of the membership interests of Hawker Energy, LLC ("Hawker"), and its wholly-owned subsidiary Punta Gorda Resources, LLC (see Note 4). Our condensed consolidated financial statements include the accounts of these entities beginning January 1, 2014. | |
All significant intercompany balances and transactions have been eliminated. | |
Use of Estimates | |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates included in the financial statements are: (1) depreciation and depletion; (2) accrued assets and liabilities; (3) asset retirement obligations; and (4) net profits interest payable. Although management believes these estimates are reasonable, changes in facts and circumstances or discovery of new information may result in revised estimates. Actual results could differ from those estimates. | |
Financial Instruments | |
Financial instruments consist of cash, accounts receivable, accounts payable and notes payable. Recorded values of cash, receivables, accounts payable and accrued liabilities approximate fair values due to the short maturities of such instruments. Recorded values for notes payable approximate fair values, since their stated or imputed interest rates are commensurate with prevailing market rates for similar obligations. | |
Oil Properties | |
We follow the full-cost method of accounting under which all costs associated with property acquisition, exploration and development activities are capitalized. We also capitalize internal costs that can be directly identified with our acquisition, and exploration and development activities. We do not capitalize any costs related to production, general corporate overhead or similar activities. Surface equipment on a property is also part of the amounts capitalized. | |
Under the full-cost method, capitalized costs are depleted (amortized) on a composite unit-of-production method based on proved oil reserves. If we maintain the same level of production year over year, the depletion expense may be significantly different if our estimate of remaining reserves changes significantly. Proceeds from the sale of properties are accounted for as reductions of capitalized costs unless such sales involve a significant change in the relationship between costs and the value of proved reserves or the underlying value of unproved properties, in which case a gain or loss is recognized. The costs of unproved properties are excluded from amortization until the properties are evaluated. We review all of our unevaluated properties quarterly to determine whether or not and to what extent proved reserves have been assigned to the properties, and if impairment has occurred. Unevaluated properties are assessed individually when individual costs are significant. | |
We review the carrying value of our oil properties under the full-cost accounting rules of the SEC on a quarterly basis. This quarterly review is referred to as a ceiling test. Under the ceiling test, capitalized costs, less accumulated amortization and related deferred income taxes, may not exceed an amount equal to the sum of the present value of estimated future net revenues (adjusted for cash flow hedges) less estimated future expenditures to be incurred in developing and producing the proved reserves, less any related income tax effects. In calculating future net revenues, current SEC regulations require us to utilize prices at the end of the appropriate quarterly period. Such prices are utilized except where different prices are fixed and determinable from applicable contracts for the remaining term of those contracts, including the effects of derivatives qualifying as cash flow hedges. Two primary factors impacting this test are reserve levels and current prices, and their associated impact on the present value of estimated future net revenues. Revisions to estimates of oil reserves and/or an increase or decrease in prices can have a material impact on the present value of estimated future net revenues. Any excess of the net book value, less deferred income taxes, is generally written off as an expense. Under SEC regulations, the excess above the ceiling is not expensed (or is reduced) if, subsequent to the end of the period, but prior to the release of the financial statements, oil prices increase sufficiently such that an excess above the ceiling would have been eliminated (or reduced) if the increased prices were used in the calculations. | |
The estimates of proved crude oil reserves utilized in the preparation of the financial statements are estimated in accordance with guidelines established by the SEC and the Financial Accounting Standards Board ("FASB"), which require that reserve estimates be prepared under existing economic and operating conditions using a 12-month average price with no provision for price and cost escalations in future years except by contractual arrangements. Actual results could differ materially from these estimates. | |
Long-Lived Assets | |
Impairment of long-lived assets is recorded when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying value. The carrying value of the assets is then reduced to their estimated fair value that is usually measured based on an estimate of future discounted cash flows. | |
Asset Retirement Obligations | |
Asset retirement obligations relate to the plug and abandonment costs when our wells are no longer useful, and for the cost of removing related surface facilities. We determine the value of the liability by reviewing operator estimates and estimate the increase we will face in the future. We then discount the future value based on an intrinsic interest rate that is appropriate for us. If costs rise more than what we have expected there could be additional charges in the future, however, on a quarterly basis we monitor the costs of the abandoned wells and adjust this liability if necessary. | |
Revenue Recognition | |
Oil revenues are recognized net of royalties when production is sold to a purchaser at a fixed or determinable price, when title has transferred, and if collection of the revenue is probable. | |
Net Profits Interest | |
A Net Profits Interest ("NPI") on the DEEP property calls for 40% of the net cash flow, as defined in the Assignment of Net Profit Interest (see Note 8), to be paid each month to the owner of the NPI. If net cash flow is negative, such losses carry forward to be deducted against future positive net cash flow. Given its terminating nature, the discounted present value of the minimum monthly NPI payments was recorded as a liability at SCNRG's December 1, 2009, acquisition date of a 66.67% working interest in the DEEP property, and this liability was increased pro rata when our working interest increased to 87.18% on February 1, 2014 (See Note 5). The discount rate used in both cases was 10.0% per annum. See Note 8. | |
Concentrations | |
Pursuant to a January 13, 2010 Crude Oil Purchase Contract between the DEEP operator and Plains Marketing L.P. ("PMLP"), all production from the DEEP property is sold to PMLP. The initial term of the agreement was for one year, expiring on December 31, 2010, and was automatically renewed for an additional one-year term that expired on December 31, 2011. Since January 1, 2012, the agreement has continued on a month-to-month basis and is cancellable upon thirty day's written notice by either party. | |
New Accounting Pronouncements | |
There are no recent accounting pronouncements that are expected to have a material effect on the Company's financial statements. | |
ACQUISITION_OF_SCNRG
ACQUISITION OF SCNRG | 6 Months Ended | ||||
Feb. 28, 2014 | |||||
ACQUISITION OF SCNRG [Abstract] | ' | ||||
ACQUISITION OF SCNRG | ' | ||||
3. ACQUISITION OF SCNRG | |||||
As described in Note 1, on October 25, 2013, we acquired 100% of the membership interest in SCNRG, resulting in SCNRG becoming a wholly-owned subsidiary of SCGC, in exchange for 14.0 million shares of our common stock issued to the members of SCNRG. For accounting purposes, the acquisition of SCNRG by SCGC has been accounted for as a recapitalization of SCGC. Accordingly, SCNRG is considered the acquirer for accounting purposes and, therefore, the historical financial statements are SCNRG's, consolidated with SCGC's beginning October 25, 2013. | |||||
The 14.0 million common shares issued by SCGC had an aggregate par value of $14,000. The net assets acquired by SCNRG as the accounting acquirer were: | |||||
Cash | $ | 6,004 | |||
Accounts receivable | 1,553 | ||||
Oil properties | 26,500 | ||||
Deposit | 5,000 | ||||
Accounts payable and accrued liabilities | (37,431 | ) | |||
Net assets acquired | $ | 1,626 | |||
The fair value of the consideration effectively transferred is to be based on the most reliable measure. In this case, the par value of SCGC shares provides a more reliable basis for measuring the consideration effectively transferred than the estimated fair value of the membership interest of SCNRG whose capital accounts reflect negative equity. The consideration of SCGC's equity at its par value was determined to be the most reliable measure due to its lack of reliability in market price due to negligible trading activity. | |||||
In accordance with ASC 805-40, we calculated goodwill at $12,374, which represents the excess consideration over the fair value of the net assets acquired. We further analyzed the calculated amount of goodwill to the actual substance of goodwill, if any. Based on the net present value of future cash flows collectively with consideration of the negative equity position of both SCNRG and SCGC, management determined the calculated goodwill was not a fair representation of the substance of the transaction taken as a whole. As a result and in an effort to fairly represent and not overstate the assets of SCGC, a decrease in capital was deemed appropriate. | |||||
The difference between the par value of the common shares issued and the net assets acquired was recorded in additional paid-in capital. |
ACQUISITION_OF_HAWKER_ENERGY_L
ACQUISITION OF HAWKER ENERGY, LLC | 6 Months Ended | ||||
Feb. 28, 2014 | |||||
ACQUISITION OF HAWKER ENERGY, LLC [Abstract] | ' | ||||
ACQUISITION OF HAWKER ENERGY, LLC | ' | ||||
4. ACQUISITION OF HAWKER ENERGY, LLC | |||||
On January 1, 2014, we exercised our option to acquire all of the membership interests in Hawker from Darren Katic (who was also a seller in our transaction with SCNRG) and Charles Moore (collectively the "Hawker Sellers"). We issued 3,000,000 shares of our common stock to the Hawker Sellers as consideration for the acquisition and, as described below, may be required to issue up to an additional 33,000,000 shares of our common stock to the Hawker Sellers upon us or Hawker consummating certain follow-on transactions described below ("Potential Follow-On Transactions"). In addition, we assumed $135,199 in net liabilities of Hawker. | |||||
Hawker is a California-based independent development-stage oil company focused on identifying and evaluating low-risk developmental opportunities in proven oil reserves in existing oil fields. Over the last two years, Hawker has assembled an inventory of potential development opportunities, including the Potential Follow-On Transactions. Hawker, through its wholly-owned subsidiary Punta Gorda Resources, LLC, claims developmental rights of certain mineral rights of coastal lease PRC 145.1 just offshore Ventura County in the Rincon Field and ownership rights to an associated on-shore drilling and production site. This lease is subject to 24.5% in overriding royalties, primarily to the State of California. A single active well on PRC 145.1 has historically produced between 5 and 15 barrels of oil per day (gross production before royalties). This lease has ten other non-active wells, one or more of which may be recompleted or re-drilled. All rights claimed by Hawker to PRC 145.1 are being challenged in court by the lease's operator of record -- Case No. 56-2013-00440672-CU-BC-VTA pending in Ventura County Superior Court (see Part II, Item 1, "Legal Proceedings"). Hawker is currently not receiving any net proceeds from production on this lease pending resolution of this matter in our favor. | |||||
After we exercise the option to acquire Hawker, the agreement also provides that the Hawker Sellers may be entitled to additional shares of our common stock upon the consummation of Potential Follow-On Transactions as follows: | |||||
(a) 2,000,000 shares of our common stock shall be issued upon our or Hawker's acquisition of California Oil Independents (or certain oil and gas interests held by it located in the Monroe Swell Field, Monterey, California); | |||||
(b) 2,000,000 shares of our common stock shall be issued upon our or Hawker's acquisition of a participation in South Coast Oil - Huntington Beach (or the oil and gas interests held by it); | |||||
(c) 5,000,000 shares of our common stock shall be issued upon our or Hawker's acquisition of the Midway-Sunset Lease oil and gas interests held by Christian Hall (or affiliates); | |||||
(d) 10,000,000 shares of our common stock shall be issued upon our or Hawker's acquisition of TEG Oil & Gas, Inc. (or certain oil and gas interests held by it located in the Tapia Field, Los Angeles County, California); | |||||
(e) 7,000,000 shares of our common stock shall be issued upon the conveyance to us or Hawker of certain assets and rights regarding PRC 145.1 Lease held by Rincon Island Limited Partnership or settlement in lieu of such conveyance; and | |||||
(f) 7,000,000 shares of our common stock shall be issued upon the conveyance to us or Hawker of certain mineral rights regarding PRC 427 Lease held by ExxonMobil. | |||||
The Potential Follow-On Transactions are dependent on a number of variables that are not within our control and as a result management cannot state with a reasonable degree of certainty that the acquisitions will occur. The consummation of any Potential Follow-On Transaction is independent of the Hawker acquisition. Any shares of SCGC that may be issued upon the consummation of any of the Potential Follow-On Transactions will constitute costs of completing the applicable follow-on transaction (as opposed to incremental consideration for the SCGC's acquisition of Hawker). | |||||
The assets and liabilities of Hawker at the date of acquisition were recorded at their fair values of: | |||||
Cash | $ | 1,214 | |||
Prepaid expenses | 16,625 | ||||
Less: | |||||
Accounts payable | (140,038 | ) | |||
Loan payable to related party, short term | (13,000 | ) | |||
Net liabilities assumed | $ | 135,199 | |||
The $138,199 difference between the par value of the common stock issued, $3,000, and the net liabilities assumed, $135,199, was recorded to paid in capital as there is no objective evidence of the value of Hawker's assets, which consist of the disputed claim to coastal lease PRC 145.1, and inability to determine a probability of success of the litigation. As a result and in an effort to fairly represent and not overstate the consolidated assets of SCGC, a decrease in capital was deemed appropriate. |
ACQUISITION_OF_AN_ADDITIONAL_2
ACQUISITION OF AN ADDITIONAL 20.5% WORKING INTEREST IN DEEP LEASE | 6 Months Ended |
Feb. 28, 2014 | |
ACQUISITION OF AN ADDITIONAL 20.5% WORKING INTEREST IN DEEP LEASE [Abstract] | ' |
ACQUISITION OF AN ADDITIONAL 20.5% WORKING INTEREST IN DEEP LEASE | ' |
5. ACQUISITION OF AN ADDITIONAL 20.5% WORKING INTEREST IN DEEP LEASE | |
On February 4, 2014, our wholly-owned subsidiary SCNRG completed the acquisition of additional 20.5108% working interest in the DEEP Lease for $200,000 in cash plus assumed asset retirement obligations and net profits interest liabilities aggregating to an estimated fair value of $69,729, for total consideration of $269,729. SCNRG's working interest increased from 66.67% to 87.18% as a result of the purchase, effective February 1, 2014. Our condensed consolidated financial statements include the increased working interest beginning February 1, 2014. | |
The purchase price was allocated $3,529 to machinery and equipment, and $266,200 to oil properties based on estimated fair values. | |
SCNRG has an agreement with the two other working interest owners to acquire the remaining 12.82% working interest for $125,000 in cash, plus assumption of asset retirement obligations and net profits interest liabilities, once SCGC raises net unit offering proceeds (see Note 14) of at least $125,000 following February 4, 2014. SCGC completed this amount of fund raising on April 9, 2014, but SCNRG has yet to close on the remaining purchase and is in discussion with the sellers to extend the agreed purchase to one or more later dates. Upon completion of this remaining purchase, SCNRG's working interest in the DEEP Lease will be 100%. | |
The operator, Caleco, LLC, will continue to operate the DEEP Lease on SCNRG's behalf during a transitional period following completion of the acquisition of the remaining 12.82% working interest. |
LOANS_PAYABLE_RELATED_PARTIES
LOANS PAYABLE, RELATED PARTIES | 6 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
LOANS PAYABLE, RELATED PARTIES [Abstract] | ' | ||||||||
LOANS PAYABLE, RELATED PARTIES | ' | ||||||||
6. LOANS PAYABLE, RELATED PARTIES | |||||||||
SCNRG received various loans from its former members from its inception totaling $89,833 as of February 28, 2014 and August 31, 2013. Each loan was originally unsecured, non-interest bearing and due on demand. On September 18, 2013, each loan was formalized through the issuance of an amended and restated promissory note to each former member. The amended and restated promissory notes are unsecured, bear interest at a rate of 1.66% per annum and mature no later than September 18, 2018. The unpaid principal and interest are payable upon the earlier of their maturity or upon the issuance of new debt or equity securities in a transaction or series of transactions resulting in aggregate gross proceeds to Sara Creek of a minimum of $5 million. Sara Creek assumed these loans payable upon its acquisition of SCNRG on October 25, 2013. | |||||||||
Loans from related parties, long term, consist of the following at February 28, 2014 and August 31, 2013: | |||||||||
February 28, | August 31, | ||||||||
2014 | 2013 | ||||||||
Darren Katic | $ | 38,500 | $ | 38,500 | |||||
Manhattan Holdings, LLC | 38,500 | 38,500 | |||||||
Gerald Tywoniuk | 12,833 | 12,833 | |||||||
Total long-term loans | 89,833 | 89,833 | |||||||
Accrued interest payable | 739 | - | |||||||
Less current portion | - | - | |||||||
Long-term loans from related parties, long term | $ | 90,572 | $ | 89,833 | |||||
In addition, as part of the acquisition of Hawker on January 1, 2014, we assumed a $13,000 loan payable to Darren Katic. This loan is unsecured and non-interest bearing with no formal maturity date. Accordingly, it has been treated as a short-term loan. | |||||||||
On April 9, 2014, the related parties agreed to convert the short- and long-term loans payable to related parties into common stock and warrants on the same terms as the unit offering described in Note 11. See "Subsequent Event" in Note 14. |
ASSET_RETIREMENT_OBLIGATION
ASSET RETIREMENT OBLIGATION | 6 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
ASSET RETIREMENT OBLIGATION [Abstract] | ' | ||||||||
ASSET RETIREMENT OBLIGATION | ' | ||||||||
7. ASSET RETIREMENT OBLIGATION | |||||||||
Our asset retirement obligations relate to the abandonment of oil wells and related surface facilities. The amounts recognized are based on numerous estimates and assumptions, including future retirement costs, inflation rates and credit adjusted risk-free interest rates. | |||||||||
The following shows the changes in asset retirement obligations for the six months ended February 28, 2014: | |||||||||
February 28, | August 31, | ||||||||
2014 | 2013 | ||||||||
Asset retirement obligations, beginning | $ | 103,299 | $ | 95,206 | |||||
Liabilities acquired during the period | 32,905 | - | |||||||
Liabilities settled during the period | - | - | |||||||
Current period accretion | 4,615 | 8,093 | |||||||
Asset retirement obligations, ending | $ | 140,819 | $ | 103,299 |
NET_PROFITS_INTEREST_NPI_PAYAB
NET PROFITS INTEREST ("NPI") PAYABLE | 6 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
NET PROFITS INTEREST ("NPI") PAYABLE [Abstract] | ' | ||||||||
NET PROFITS INTEREST ("NPI") PAYABLE | ' | ||||||||
8. NET PROFITS INTEREST ("NPI") PAYABLE | |||||||||
In connection with SCNRG's December 1, 2009 Purchase and Sale Agreement for DEEP, and as part of the purchase price consideration, SCNRG entered into an Assignment of Net Profit Interest with Christian Hall Petroleum. Pursuant to the agreement, SCNRG is required to make monthly payments to the holder in an amount equal to 40% of SCNRG's share of net profit (as defined in the agreement) from production. | |||||||||
Until February 1, 2014, SCNRG's working interest in the DEEP property was 66.67%, and the NPI agreement called for a minimum monthly payment of $1,985 (SCNRG's 66.67% share). Beginning February 1, 2014, SCNRG's working interest in the DEEP property increased to 87.18% (see Note 5), and its share of the minimum monthly payment became $2,596. In total, SCNRG and other working interest owners are required to make a minimum monthly payment of $2,978. Payments are required until SCNRG and other working interest owners have made NPI payments in aggregate between $347,000 and $357,410 on or before December 31, 2022 (the actual maximum amount within this range is dependent on when SCNRG and other working interest owners satisfy their aggregate NPI payment obligations). As of February 28, 2014, SCNRG and other working interest owners have made NPI payments totaling $110,311. SCNRG has paid its 66.67% working interest share of this amount paid to date, and will be responsible for its 87.18% working interest share of future payments as a result of recently increasing its working interest (87.18% will increase to 100% once the remaining interest is acquired.) | |||||||||
Given its terminating nature, the discounted present value of the minimum monthly NPI payments was recorded as a liability at SCNRG's December 1, 2009, acquisition date of a 66.67% working interest in the DEEP property, and this liability was increased pro rata when our working interest increased to 87.18% on February 1, 2014. The discount rate used in both cases was 10.0% per annum. | |||||||||
Changes in SCNRG's share of the NPI liability are as follows: | |||||||||
February 28, | August 31, | ||||||||
2014 | 2013 | ||||||||
NPI liability, beginning of period | $ | 124,597 | $ | 135,640 | |||||
Liabilities assumed in connection with | 36,824 | - | |||||||
DEEP Lease acquisition | |||||||||
Current period accretion | 6,009 | 12,865 | |||||||
Payments made | (11,913 | ) | (23,908 | ) | |||||
NPI liability, end of period | 155,517 | 124,597 | |||||||
Less: current portion | 16,643 | 12,109 | |||||||
NPI liability, long-term portion | $ | 138,874 | $ | 112,488 |
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended | ||||||||||||
Feb. 28, 2014 | |||||||||||||
FAIR VALUE MEASUREMENTS [Abstract] | ' | ||||||||||||
FAIR VALUE MEASUREMENTS | ' | ||||||||||||
9. FAIR VALUE MEASUREMENTS | |||||||||||||
We hold certain financial assets, which are required to be measured at fair value on a recurring basis in accordance with the Statement of Financial Accounting Standard No. 157, "Fair Value Measurements" ("ASC Topic 820-10"). ASC Topic 820-10 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). ASC Topic 820-10 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 on the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability. | |||||||||||||
The three levels of the fair value hierarchy under ASC Topic 820-10 are described below: | |||||||||||||
§ | Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access. We believe receivables, payables and our loans approximate fair value at February 28, 2014 and August 31, 2013. | ||||||||||||
§ | Level 2 - Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. | ||||||||||||
§ | Level 3 - Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. We consider depleting assets, asset retirement obligations and net profit interest liability to be Level 3. We determine the fair value of Level 3 assets and liabilities utilizing various inputs, including oil price quotations and contract terms. | ||||||||||||
Fair Value Measurement | |||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||
28-Feb-14 | |||||||||||||
Assets: | |||||||||||||
Capitalized oil and gas properties, net | $ | - | $ | - | $ | 578,959 | |||||||
Liabilities: | |||||||||||||
Net profit interest liability | - | - | (155,517 | ) | |||||||||
Asset retirement obligation | (140,819 | ) | |||||||||||
Total | $ | - | $ | - | $ | 282,623 | |||||||
31-Aug-13 | |||||||||||||
Assets: | |||||||||||||
Capitalized oil and gas properties, net | $ | - | $ | - | $ | 297,500 | |||||||
Liabilities: | |||||||||||||
Net profit interest liability | - | - | (124,597 | ) | |||||||||
Asset retirement obligation | - | - | (103,299 | ) | |||||||||
Total | $ | - | $ | - | $ | 69,604 |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Feb. 28, 2014 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | ' |
COMMITMENTS AND CONTINGENCIES | ' |
10. COMMITMENTS AND CONTINGENCIES | |
Commitments | |
Pursuant to SCNRG's December 1, 2009 Purchase and Sale Agreement, oil production from the DEEP property is subject to a 1% overriding royalty. Additionally, production is also subject to an aggregate additional 19.92% royalty for total royalties of 20.92%. | |
Further, in connection with the aforementioned agreement, SCNRG entered into an Operating Agreement with Caleco, LLC ("Caleco") for a term equal to the life of the wells. Caleco now owns a 6.47% working interest in DEEP, which is subject to a purchase option in favor of SCNRG as described in Note 5. As the operator, Caleco incurs production and other costs, which are subsequently billed to SCNRG through a joint interest billing process; and the operator distributes to SCNRG its share of revenue received from production, less royalties and NPI obligations. All expenses and revenue presented by the operator represent the pro rata share of the revenue earned and expenses incurred. In accordance with the terms of the agreement, the operator is entitled to a fee for services but has instead elected to bill SCNRG based on actual time and materials. | |
Contingencies | |
We are subject to various federal, state and local laws and regulations relating to discharge of materials into, and protection of, the environment. These laws and regulations may, among other things, impose liability on the owners for the cost of pollution cleanup resulting from operations and subject the owners to liability for pollution damages. In some instances, the operator may be directed to suspend or cease operations in the affected area. As of February 28, 2014, and August 31, 2013, we have no reserve for environmental remediation and are not aware of any environmental claims. | |
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Feb. 28, 2014 | |
STOCKHOLDERS' EQUITY [Abstract] | ' |
STOCKHOLDERS' EQUITY | ' |
11. STOCKHOLDERS' EQUITY | |
The following common stock transactions occurred during the six months ended February 28, 2014: | |
(a) On October 25, 2013, we issued 14,000,000 shares of our common stock to the members of SCNRG for 100% of the membership interests in SCNRG. As described in Notes 1 and 3, the acquisition of SCNRG by SCGC has been accounted for as a recapitalization of SCGC for accounting purposes; | |
(b) On January 1, 2014, we issued 3,000,000 shares of our common stock to acquire Hawker as described in Note 4; | |
(c) On January 8, 2014, we issued 2,000,000 shares of our common stock to Ryan Bateman to satisfy an obligation pursuant to a July 2013 purchase agreement for the Sawtelle well interest; | |
(d) On January 10 and January 31, 2014, we closed private placements for an aggregate of 4,775,000 units for gross proceeds of $477,500. This includes $22,500 to settle certain accounts payable. No commissions were paid or are payable. The price of each unit was $0.10. Each unit is comprised of one share of our common stock, together with a warrant to acquire an additional one-half share of our common stock at $0.20 per share. The warrants expire five years from the closing date. Net proceeds after offering costs were $457,000. No separate accounting was given to the warrants as the value is indeterminable, and any such allocation would be recorded to paid-in capital regardless, just as the excess over par value for the common stock was recorded. | |
(e) During the period February 1, 2014 through February 28, 2014, we receive an additional $40,000 for an additional 400,000 units, for which closing had not yet occurred as of February 28, 2014. See Note 14. |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Feb. 28, 2014 | |
Related Party Transactions [Abstract] | ' |
RELATED PARTY TRANSACTIONS | ' |
12. RELATED PARTY TRANSACTIONS | |
On January 1, 2014, we exercised our option to acquire all of the membership interests in Hawker Energy, LLC, a California limited liability company ("Hawker"), from Darren Katic and Charles Moore (collectively the "Sellers"). We issued 3,000,000 shares of our common to the Sellers as consideration for the acquisition, 1,500,000 shares to each Seller. We also assumed net liabilities of $135,199. We may be required to issue up to an additional 33,000,000 shares to Sellers upon SCGC or Hawker consummating certain follow-on transactions. (See Note 4). Mr. Katic is a director and our Chief Executive Officer and Chief Financial Officer. He was a member of SCNRG, LLC, which we acquired on October 25, 2013, and at which point Mr. Katic became a director, officer and a significant shareholder of SCGC. | |
The Hawker option was originally entered into with Sara Creek on October 15, 2013 and amended on November 20, 2013 to (a) extend the term of the option, (b) revise the option consideration payable upon consummation of certain transactions described in the Agreement and (c) provide for additional option consideration in the event of the consummation of certain transactions not previously contemplated by the parties. | |
On January 10, 2014, Darren Katic, one of the sellers of SCNRG and a director, officer and significant shareholder of SCGC, purchased 380,000 units of SCGC for $38,000, Manhattan Holdings, LLC, one of the sellers of SCNRG and a significant shareholder of SCGC, acquired 900,000 units of SCGC for $90,000, and Gerald Tywoniuk, also one of the sellers of SCNRG, purchased 500,000 units of SCGC for $50,000. On January 31, 2014, Kristian Andresen, a director, officer and significant shareholder agreed to settle $15,000 owing to him in exchange for 150,000 units. All of these amounts are a portion of the monies we raised described in Note 11. Each unit is comprised of one share of our common stock, together with a warrant to acquire an additional one-half share of our common stock at $0.20 per share. The warrants expire five years from the closing date. The price of each unit was $0.10 per unit. | |
Subsequent to February 28, 2014, Mr. Katic, Manhattan Holdings, LLC and Mr. Tywoniuk agreed to settle amounts owing to them (see Note 6), and for certain expenses incurred by them, totaling $120,312, in exchange for 1,203,120 units with the same terms described above. See Note 14. | |
PRO_FORMA_FINANCIAL_INFORMATIO
PRO FORMA FINANCIAL INFORMATION | 6 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
PRO FORMA FINANCIAL INFORMATION [Abstract] | ' | ||||||||
PRO FORMA FINANCIAL INFORMATION | ' | ||||||||
13. PRO FORMA FINANCIAL INFORMATION | |||||||||
The following table presents unaudited pro forma consolidated information, adjusted for the acquisitions of SCGC (Note 3) and the additional 20.51% interest in DEEP Lease (Note 5), as if the acquisitions had occurred on September 1, 2012: | |||||||||
Six Months Ended | |||||||||
February 28, | |||||||||
2014 | 2013 | ||||||||
Revenue | $ | 58,681 | $ | 30,632 | |||||
Net loss | $ | (263,866 | ) | $ | (70,199 | ) | |||
Loss per share | $ | (0.01 | ) | $ | - | ||||
These amounts have been calculated after applying our accounting policies and adjusting the results to reflect the recapitalization of SCGC. The unaudited pro forma adjustments are based on available information and certain assumptions we believe are reasonable. It was determined that Hawker was not a business and therefore there is no pro forma adjustment for the acquisition of Hawker (Note 4). |
SUBSEQUENT_EVENT
SUBSEQUENT EVENT | 6 Months Ended |
Feb. 28, 2014 | |
SUBSEQUENT EVENT [Abstract] | ' |
SUBSEQUENT EVENT | ' |
14. SUBSEQUENT EVENT | |
On April 9, 2014, we closed on an additional $364,972 for 3,649,720 units with the same terms as described in Note 11. Included in this amount is $120,312 to settle amounts owing to related parties, and for certain expenses incurred by them, in exchange for 1,203,120 units (see Note 12 to the unaudited interim financial statements elsewhere in this report). Also included in this amount is $25,000 in cash for 250,000 units purchased by SMED Capital Corp., an entity owned indirectly by Kristian Andresen, a director, officer and significant shareholder, and the conversion of a $24,060 accounts payable to a vendor into 240,600 units. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Feb. 28, 2014 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' |
Basis of Presentation | ' |
Basis of Presentation | |
The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and the rules and regulations of the United States Securities and Exchange Commission ("SEC") for interim financial information. | |
The unaudited interim financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended August 31, 2013, which contains the audited financial statements and notes thereto for SCGC. Additionally, the Company's Amendment No. 1 to Current Report on Form 8-K/A filed with the SEC on December 24, 2013, contains the audited financial statements and notes thereto for the years ended August 31, 2013 and 2012 for SCNRG. | |
Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The interim results for the six months ended February 28, 2014 are not necessarily indicative of results for the full fiscal year. | |
Principles of Consolidation | ' |
Principles of Consolidation | |
The acquisition of SCNRG by SCGC on October 25, 2013, has been accounted for as a recapitalization of SCGC and SCNRG is considered the acquirer for accounting purposes. Therefore, our condensed consolidated financial statements include the historic accounts of SCNRG, and from the date of our acquisition of SCNRG on October 25, 2013, include the accounts of SCGC. | |
On January 1, 2014, we acquired all of the membership interests of Hawker Energy, LLC ("Hawker"), and its wholly-owned subsidiary Punta Gorda Resources, LLC (see Note 4). Our condensed consolidated financial statements include the accounts of these entities beginning January 1, 2014. | |
All significant intercompany balances and transactions have been eliminated. | |
Use of Estimates | ' |
Use of Estimates | |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates included in the financial statements are: (1) depreciation and depletion; (2) accrued assets and liabilities; (3) asset retirement obligations; and (4) net profits interest payable. Although management believes these estimates are reasonable, changes in facts and circumstances or discovery of new information may result in revised estimates. Actual results could differ from those estimates. | |
Financial Instruments | ' |
Financial Instruments | |
Financial instruments consist of cash, accounts receivable, accounts payable and notes payable. Recorded values of cash, receivables, accounts payable and accrued liabilities approximate fair values due to the short maturities of such instruments. Recorded values for notes payable approximate fair values, since their stated or imputed interest rates are commensurate with prevailing market rates for similar obligations. | |
Oil Properties | ' |
Oil Properties | |
We follow the full-cost method of accounting under which all costs associated with property acquisition, exploration and development activities are capitalized. We also capitalize internal costs that can be directly identified with our acquisition, and exploration and development activities. We do not capitalize any costs related to production, general corporate overhead or similar activities. Surface equipment on a property is also part of the amounts capitalized. | |
Under the full-cost method, capitalized costs are depleted (amortized) on a composite unit-of-production method based on proved oil reserves. If we maintain the same level of production year over year, the depletion expense may be significantly different if our estimate of remaining reserves changes significantly. Proceeds from the sale of properties are accounted for as reductions of capitalized costs unless such sales involve a significant change in the relationship between costs and the value of proved reserves or the underlying value of unproved properties, in which case a gain or loss is recognized. The costs of unproved properties are excluded from amortization until the properties are evaluated. We review all of our unevaluated properties quarterly to determine whether or not and to what extent proved reserves have been assigned to the properties, and if impairment has occurred. Unevaluated properties are assessed individually when individual costs are significant. | |
We review the carrying value of our oil properties under the full-cost accounting rules of the SEC on a quarterly basis. This quarterly review is referred to as a ceiling test. Under the ceiling test, capitalized costs, less accumulated amortization and related deferred income taxes, may not exceed an amount equal to the sum of the present value of estimated future net revenues (adjusted for cash flow hedges) less estimated future expenditures to be incurred in developing and producing the proved reserves, less any related income tax effects. In calculating future net revenues, current SEC regulations require us to utilize prices at the end of the appropriate quarterly period. Such prices are utilized except where different prices are fixed and determinable from applicable contracts for the remaining term of those contracts, including the effects of derivatives qualifying as cash flow hedges. Two primary factors impacting this test are reserve levels and current prices, and their associated impact on the present value of estimated future net revenues. Revisions to estimates of oil reserves and/or an increase or decrease in prices can have a material impact on the present value of estimated future net revenues. Any excess of the net book value, less deferred income taxes, is generally written off as an expense. Under SEC regulations, the excess above the ceiling is not expensed (or is reduced) if, subsequent to the end of the period, but prior to the release of the financial statements, oil prices increase sufficiently such that an excess above the ceiling would have been eliminated (or reduced) if the increased prices were used in the calculations. | |
The estimates of proved crude oil reserves utilized in the preparation of the financial statements are estimated in accordance with guidelines established by the SEC and the Financial Accounting Standards Board ("FASB"), which require that reserve estimates be prepared under existing economic and operating conditions using a 12-month average price with no provision for price and cost escalations in future years except by contractual arrangements. Actual results could differ materially from these estimates. | |
Long-Lived Assets | ' |
Long-Lived Assets | |
Impairment of long-lived assets is recorded when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying value. The carrying value of the assets is then reduced to their estimated fair value that is usually measured based on an estimate of future discounted cash flows. | |
Asset Retirement Obligations | ' |
Asset Retirement Obligations | |
Asset retirement obligations relate to the plug and abandonment costs when our wells are no longer useful, and for the cost of removing related surface facilities. We determine the value of the liability by reviewing operator estimates and estimate the increase we will face in the future. We then discount the future value based on an intrinsic interest rate that is appropriate for us. If costs rise more than what we have expected there could be additional charges in the future, however, on a quarterly basis we monitor the costs of the abandoned wells and adjust this liability if necessary. | |
Revenue Recognition | ' |
Revenue Recognition | |
Oil revenues are recognized net of royalties when production is sold to a purchaser at a fixed or determinable price, when title has transferred, and if collection of the revenue is probable. | |
Net Profits Interest | ' |
Net Profits Interest | |
A Net Profits Interest ("NPI") on the DEEP property calls for 40% of the net cash flow, as defined in the Assignment of Net Profit Interest (see Note 8), to be paid each month to the owner of the NPI. If net cash flow is negative, such losses carry forward to be deducted against future positive net cash flow. Given its terminating nature, the discounted present value of the minimum monthly NPI payments was recorded as a liability at SCNRG's December 1, 2009, acquisition date of a 66.67% working interest in the DEEP property, and this liability was increased pro rata when our working interest increased to 87.18% on February 1, 2014 (See Note 5). The discount rate used in both cases was 10.0% per annum. See Note 8. | |
Concentrations | ' |
Concentrations | |
Pursuant to a January 13, 2010 Crude Oil Purchase Contract between the DEEP operator and Plains Marketing L.P. ("PMLP"), all production from the DEEP property is sold to PMLP. The initial term of the agreement was for one year, expiring on December 31, 2010, and was automatically renewed for an additional one-year term that expired on December 31, 2011. Since January 1, 2012, the agreement has continued on a month-to-month basis and is cancellable upon thirty day's written notice by either party. | |
New Accounting Pronouncements | ' |
New Accounting Pronouncements | |
There are no recent accounting pronouncements that are expected to have a material effect on the Company's financial statements. |
ACQUISITION_OF_SCNRG_Tables
ACQUISITION OF SCNRG (Tables) (SCNRG [Member]) | 6 Months Ended | ||||
Feb. 28, 2014 | |||||
SCNRG [Member] | ' | ||||
Business Acquisition [Line Items] | ' | ||||
Schedule of Net Assets Acquired | ' | ||||
The net assets acquired by SCNRG as the accounting acquirer were: | |||||
Cash | $ | 6,004 | |||
Accounts receivable | 1,553 | ||||
Oil properties | 26,500 | ||||
Deposit | 5,000 | ||||
Accounts payable and accrued liabilities | (37,431 | ) | |||
Net assets acquired | $ | 1,626 | |||
ACQUISITION_OF_HAWKER_ENERGY_L1
ACQUISITION OF HAWKER ENERGY, LLC (Tables) (HAWKER ENERGY, LLC [Member]) | 6 Months Ended | ||||
Feb. 28, 2014 | |||||
HAWKER ENERGY, LLC [Member] | ' | ||||
Business Acquisition [Line Items] | ' | ||||
Schedule of Fair Value of the Assets Acquired and Liabilities Assumed | ' | ||||
The assets and liabilities of Hawker at the date of acquisition were recorded at their fair values of: | |||||
Cash | $ | 1,214 | |||
Prepaid expenses | 16,625 | ||||
Less: | |||||
Accounts payable | 140,038 | ||||
Loan payable to related party, short term | 13,000 | ||||
Net liabilities assumed | $ | 135,199 |
LOANS_PAYABLE_RELATED_PARTIES_
LOANS PAYABLE, RELATED PARTIES (Tables) | 6 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
LOANS PAYABLE, RELATED PARTIES [Abstract] | ' | ||||||||
Schedule of Loans from Related Parties | ' | ||||||||
Loans from related parties, long term, consist of the following at February 28, 2014 and August 31, 2013: | |||||||||
February 28, | August 31, | ||||||||
2014 | 2013 | ||||||||
Darren Katic | $ | 38,500 | $ | 38,500 | |||||
Manhattan Holdings, LLC | 38,500 | 38,500 | |||||||
Gerald Tywoniuk | 12,833 | 12,833 | |||||||
Total long-term loans | 89,833 | 89,833 | |||||||
Accrued interest payable | 739 | - | |||||||
Less current portion | - | - | |||||||
Long-term loans from related parties, long term | $ | 90,572 | $ | 89,833 |
ASSET_RETIREMENT_OBLIGATION_Ta
ASSET RETIREMENT OBLIGATION (Tables) | 6 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
ASSET RETIREMENT OBLIGATION [Abstract] | ' | ||||||||
Schedule of Changes in Asset Retirement Obligation | ' | ||||||||
The following shows the changes in asset retirement obligations for the six months ended February 28, 2014: | |||||||||
February 28, | August 31, | ||||||||
2014 | 2013 | ||||||||
Asset retirement obligations, beginning | $ | 103,299 | $ | 95,206 | |||||
Liabilities acquired during the period | 32,905 | - | |||||||
Liabilities settled during the period | - | - | |||||||
Current period accretion | 4,615 | 8,093 | |||||||
Asset retirement obligations, ending | $ | 140,819 | $ | 103,299 |
NET_PROFITS_INTEREST_NPI_PAYAB1
NET PROFITS INTEREST ("NPI") PAYABLE (Tables) | 6 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
NET PROFITS INTEREST ("NPI") PAYABLE [Abstract] | ' | ||||||||
Schedule of Changes in NPI Liability | ' | ||||||||
Changes in SCNRG's share of the NPI liability are as follows: | |||||||||
February 28, | August 31, | ||||||||
2014 | 2013 | ||||||||
NPI liability, beginning of period | $ | 124,597 | $ | 135,640 | |||||
Liabilities assumed in connection with | 36,824 | - | |||||||
DEEP Lease acquisition | |||||||||
Current period accretion | 6,009 | 12,865 | |||||||
Payments made | (11,913 | ) | (23,908 | ) | |||||
NPI liability, end of period | 155,517 | 124,597 | |||||||
Less: current portion | 16,643 | 12,109 | |||||||
NPI liability, long-term portion | $ | 138,874 | $ | 112,488 |
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended | ||||||||||||
Feb. 28, 2014 | |||||||||||||
FAIR VALUE MEASUREMENTS [Abstract] | ' | ||||||||||||
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | ' | ||||||||||||
Fair Value Measurement | |||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||
28-Feb-14 | |||||||||||||
Assets: | |||||||||||||
Capitalized oil and gas properties, net | $ | - | $ | - | $ | 578,959 | |||||||
Liabilities: | |||||||||||||
Net profit interest liability | - | - | (155,517 | ) | |||||||||
Asset retirement obligation | (140,819 | ) | |||||||||||
Total | $ | - | $ | - | $ | 282,623 | |||||||
31-Aug-13 | |||||||||||||
Assets: | |||||||||||||
Capitalized oil and gas properties, net | $ | - | $ | - | $ | 297,500 | |||||||
Liabilities: | |||||||||||||
Net profit interest liability | - | - | (124,597 | ) | |||||||||
Asset retirement obligation | - | - | (103,299 | ) | |||||||||
Total | $ | - | $ | - | $ | 69,604 |
PRO_FORMA_FINANCIAL_INFORMATIO1
PRO FORMA FINANCIAL INFORMATION (Tables) | 6 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
PRO FORMA FINANCIAL INFORMATION [Abstract] | ' | ||||||||
Schedule of Unaudited Pro Forma Consolidated Information | ' | ||||||||
The following table presents unaudited pro forma consolidated information, adjusted for the acquisitions of SCGC (Note 3) and the additional 20.51% interest in DEEP Lease (Note 5), as if the acquisitions had occurred on September 1, 2012: | |||||||||
Six Months Ended | |||||||||
February 28, | |||||||||
2014 | 2013 | ||||||||
Revenue | $ | 58,681 | $ | 30,632 | |||||
Net loss | $ | (263,866 | ) | $ | (70,199 | ) | |||
Loss per share | $ | (0.01 | ) | $ | - |
DESCRIPTION_OF_BUSINESS_Detail
DESCRIPTION OF BUSINESS (Details) (SCNRG [Member]) | 1 Months Ended | ||
Oct. 25, 2013 | Feb. 28, 2014 | Dec. 01, 2009 | |
SCNRG [Member] | ' | ' | ' |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ' | ' | ' |
Ownership interest | 100.00% | 87.18% | 66.67% |
Number of shares issued for acquisition | 14,000,000 | ' | ' |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 6 Months Ended | |||
Feb. 28, 2014 | Feb. 28, 2014 | Oct. 25, 2013 | Dec. 01, 2009 | |
SCNRG [Member] | SCNRG [Member] | SCNRG [Member] | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ' | ' | ' | ' |
Percentage of monthly payments equal to net profit | 40.00% | ' | ' | ' |
Interest rate utilizing a discount rate | 10.00% | ' | ' | ' |
Ownership interest | ' | 87.18% | 100.00% | 66.67% |
ACQUISITION_OF_SCNRG_Narrative
ACQUISITION OF SCNRG (Narrative) (Details) (USD $) | 6 Months Ended | 1 Months Ended | ||
Feb. 28, 2014 | Oct. 25, 2013 | Feb. 28, 2014 | Dec. 01, 2009 | |
SCNRG [Member] | SCNRG [Member] | SCNRG [Member] | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ' | ' | ' | ' |
Ownership interest | ' | 100.00% | 87.18% | 66.67% |
Number of shares issued for acquisition | ' | 14,000,000 | ' | ' |
Stock issued during period for acquisition | $1,626 | $14,000 | ' | ' |
Goodwill | ' | $12,374 | ' | ' |
ACQUISITION_OF_SCNRG_Schedule_
ACQUISITION OF SCNRG (Schedule of Net Assets Acquired) (Details) (USD $) | Oct. 25, 2013 |
ACQUISITION OF SCNRG [Abstract] | ' |
Cash | $6,004 |
Accounts receivable | 1,553 |
Oil properties | 26,500 |
Deposits | 5,000 |
Accounts payable and accrued liabilities | -37,431 |
Net assets acquired | $1,626 |
ACQUISITION_OF_HAWKER_ENERGY_L2
ACQUISITION OF HAWKER ENERGY, LLC (Narrative) (Details) (USD $) | 0 Months Ended | 6 Months Ended |
Jan. 01, 2014 | Feb. 28, 2014 | |
Business Acquisition [Line Items] | ' | ' |
Possible additional shares required to issue | ' | 33,000,000 |
Overriding royalty percentage | ' | 1.00% |
HAWKER ENERGY, LLC [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Number of shares issued for acquisition | 3,000,000 | ' |
Overriding royalty percentage | ' | 24.50% |
Par value | ' | $138,199 |
Additional paid-in capital | ' | $3,000 |
California Oil Independents [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Number of shares issued for acquisition | ' | 2,000,000 |
South Coast Oil [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Number of shares issued for acquisition | ' | 2,000,000 |
Midway Sunset Lease Oil And Gas [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Number of shares issued for acquisition | ' | 5,000,000 |
TEG Oil & Gas, Inc. [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Number of shares issued for acquisition | ' | 10,000,000 |
Rincon Island Limited Partnership [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Number of shares issued for acquisition | ' | 7,000,000 |
ExxonMobil [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Number of shares issued for acquisition | ' | 7,000,000 |
Darren Katic [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Number of shares issued for acquisition | ' | 1,500,000 |
Sellers [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Number of shares issued for acquisition | ' | 3,000,000 |
Charles Moore [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Number of shares issued for acquisition | ' | 1,500,000 |
ACQUISITION_OF_HAWKER_ENERGY_L3
ACQUISITION OF HAWKER ENERGY, LLC (Schedule of Assets and Liabilities Acquired) (Details) (USD $) | Oct. 25, 2013 | Jan. 01, 2014 |
HAWKER ENERGY, LLC [Member] | ||
Business Acquisition [Line Items] | ' | ' |
Cash | $6,004 | $1,214 |
Prepaid expenses | ' | 16,625 |
Accounts payable | 37,431 | 140,038 |
Loan payable to related party | ' | 13,000 |
Net liabilities assumed | ' | $135,199 |
ACQUISITION_OF_AN_ADDITIONAL_21
ACQUISITION OF AN ADDITIONAL 20.5% WORKING INTEREST IN DEEP LEASE (Details) (USD $) | 0 Months Ended | |||
Feb. 04, 2014 | Feb. 28, 2014 | Oct. 25, 2013 | Dec. 01, 2009 | |
Business Acquisition [Line Items] | ' | ' | ' | ' |
Oil properties | ' | ' | 26,500 | ' |
Caleco, LLC [Member] | ' | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' | ' |
Ownership interest | 12.82% | ' | ' | ' |
SCNRG [Member] | ' | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' | ' |
Ownership interest | ' | 87.18% | 100.00% | 66.67% |
Cash paid for business acquisition | 200,000 | ' | ' | ' |
Working interest for cash | 125,000 | ' | ' | ' |
Machinery and equipment | 3,529 | ' | ' | ' |
Oil properties | 266,200 | ' | ' | ' |
Purchase price of entity | 269,729 | ' | ' | ' |
Contingent consideration liabilities | $69,729 | ' | ' | ' |
Acquisition of additional working interest in DEEP lease | 20.51% | ' | ' | ' |
LOANS_PAYABLE_RELATED_PARTIES_1
LOANS PAYABLE, RELATED PARTIES (Narrative) (Details) (USD $) | 1 Months Ended | |||||
Sep. 18, 2013 | Feb. 28, 2014 | Aug. 31, 2013 | Feb. 28, 2014 | Jan. 01, 2014 | Aug. 31, 2013 | |
Darren Katic [Member] | Darren Katic [Member] | Darren Katic [Member] | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ' | ' | ' | ' | ' | ' |
Loans payable | ' | $89,833 | $89,833 | $38,500 | $13,000 | $38,500 |
Maturity date | 18-Sep-18 | ' | ' | ' | ' | ' |
Interest rate | 1.66% | ' | ' | ' | ' | ' |
Gross proceeds recieved to trigger repayment of loans to related party | $5,000,000 | ' | ' | ' | ' | ' |
LOANS_PAYABLE_RELATED_PARTIES_2
LOANS PAYABLE, RELATED PARTIES (Schedule of Loans from Related Parties) (Details) (USD $) | Feb. 28, 2014 | Jan. 01, 2014 | Aug. 31, 2013 |
Related Party Transaction [Line Items] | ' | ' | ' |
Total long-term term loans | $89,833 | ' | $89,833 |
Accrued interest payable | 739 | ' | ' |
Less - current maturities | ' | ' | ' |
Long-term loans from related parties | 90,572 | ' | 89,833 |
Darren Katic [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Total long-term term loans | 38,500 | 13,000 | 38,500 |
Manhattan Holdings, LLC [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Total long-term term loans | 38,500 | ' | 38,500 |
Gerald Tywoniuk [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Total long-term term loans | $12,833 | ' | $12,833 |
ASSET_RETIREMENT_OBLIGATION_De
ASSET RETIREMENT OBLIGATION (Details) (USD $) | 6 Months Ended | 12 Months Ended | |
Feb. 28, 2014 | Feb. 28, 2013 | Aug. 31, 2013 | |
ASSET RETIREMENT OBLIGATION [Abstract] | ' | ' | ' |
Asset retirement obligations, August 31, 2013 | $103,299 | $95,206 | $95,206 |
Liability assumed on acquisition of additional interest in DEEP Lease (see Note 5) | 32,905 | ' | ' |
Liabilities settled during the period | ' | ' | ' |
Accretion | 4,615 | 4,046 | 8,093 |
Asset retirement obligations, February 28, 2014 | $140,819 | ' | $103,299 |
NET_PROFITS_INTEREST_NPI_PAYAB2
NET PROFITS INTEREST ("NPI") PAYABLE (Narrative) (Details) (USD $) | 6 Months Ended | 0 Months Ended | 6 Months Ended | ||
Feb. 28, 2014 | Aug. 31, 2013 | Dec. 01, 2009 | Feb. 28, 2014 | Oct. 25, 2013 | |
SCNRG [Member] | SCNRG [Member] | SCNRG [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ' | ' | ' | ' | ' |
Percentage of monthly payments equal to net profit | 40.00% | ' | ' | ' | ' |
Stated minimum monthly payment | $2,978 | ' | $1,985 | $2,596 | ' |
Maturity date | 31-Dec-22 | ' | ' | ' | ' |
Interest rate utilizing a discount rate | 10.00% | ' | ' | ' | ' |
NPI payments | 110,311 | ' | ' | ' | ' |
Minimum NPI payment requirement | 347,000 | ' | ' | ' | ' |
Maximum NPI payment requirement | 357,410 | ' | ' | ' | ' |
Net profits interest payable, current portion | $16,643 | $12,109 | ' | ' | ' |
Ownership interest | ' | ' | 66.67% | 87.18% | 100.00% |
NET_PROFITS_INTEREST_NPI_PAYAB3
NET PROFITS INTEREST ("NPI") PAYABLE (Schedule of Changes in NPI Liability) (Details) (USD $) | 6 Months Ended | 12 Months Ended | |
Feb. 28, 2014 | Feb. 28, 2013 | Aug. 31, 2013 | |
NET PROFITS INTEREST ("NPI") PAYABLE [Abstract] | ' | ' | ' |
NPI liability, beginning of period | $124,597 | $135,640 | $135,640 |
Liabilities assumed with acquisition of additional interest in DEEP Lease | 36,824 | ' | ' |
Accretion of net profits interest liability | 6,009 | 6,569 | 12,865 |
Payments made | -11,913 | -11,995 | -23,908 |
NPI liability, end of period | 155,517 | ' | 124,597 |
Less: current portion | 16,643 | ' | 12,109 |
NPI liability: long-term portion | $138,874 | ' | $112,488 |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Details) (USD $) | Feb. 28, 2014 | Aug. 31, 2013 |
Level 1 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Capitalized oil and gas properties | ' | ' |
Net profit interest liability | ' | ' |
Asset retirement obligation | ' | ' |
Total | ' | ' |
Level 2 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Capitalized oil and gas properties | ' | ' |
Net profit interest liability | ' | ' |
Asset retirement obligation | ' | ' |
Total | ' | ' |
Level 3 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Capitalized oil and gas properties | 578,959 | 297,500 |
Net profit interest liability | -155,517 | -124,597 |
Asset retirement obligation | -140,819 | -103,299 |
Total | $282,623 | $69,604 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details) | 6 Months Ended |
Feb. 28, 2014 | |
Long-term Purchase Commitment [Line Items] | ' |
Overriding royalty percentage | 1.00% |
Aggregate additional royalty percentage subject to production | 19.92% |
Total royalties | 20.92% |
Caleco, LLC [Member] | ' |
Long-term Purchase Commitment [Line Items] | ' |
Working interest | 6.47% |
STOCKHOLDERS_EQUITY_Details
STOCKHOLDERS' EQUITY (Details) (USD $) | 6 Months Ended | 6 Months Ended | 0 Months Ended | 1 Months Ended | ||||||
Feb. 28, 2014 | Feb. 28, 2013 | Jan. 10, 2014 | Feb. 28, 2014 | Feb. 28, 2014 | Jan. 01, 2014 | Jan. 08, 2014 | Oct. 25, 2013 | Feb. 28, 2014 | Dec. 01, 2009 | |
Common Stock [Member] | Common Stock Payable [Member] | HAWKER ENERGY, LLC [Member] | Ryan Bateman [Member] | SCNRG [Member] | SCNRG [Member] | SCNRG [Member] | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares issued for acquisition | ' | ' | ' | ' | ' | 3,000,000 | 2,000,000 | 14,000,000 | ' | ' |
Ownership interest | ' | ' | ' | ' | ' | ' | ' | 100.00% | 87.18% | 66.67% |
Warrant exercise price | ' | ' | 0.2 | ' | ' | ' | ' | ' | ' | ' |
Price per unit | ' | ' | $0.10 | ' | ' | ' | ' | ' | ' | ' |
Net proceeds from unit offering | $457,024 | ' | ' | $4,775 | ' | ' | ' | ' | ' | ' |
Net proceeds from unit offering, shares | ' | ' | ' | 4,775,000 | ' | ' | ' | ' | ' | ' |
Proceeds received for common stock payable | 40,000 | ' | ' | ' | 40,000 | ' | ' | ' | ' | ' |
Proceeds received for common stock payable, shares | ' | ' | ' | ' | 400,000 | ' | ' | ' | ' | ' |
Units issued to settle accounts payable | $22,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details) (USD $) | 6 Months Ended | 0 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | |||
Feb. 28, 2014 | Jan. 10, 2014 | Jan. 01, 2014 | Jan. 10, 2014 | Feb. 28, 2014 | Jan. 10, 2014 | Feb. 28, 2014 | Jan. 10, 2014 | Feb. 28, 2014 | Jan. 31, 2014 | Feb. 28, 2014 | Feb. 28, 2014 | |
HAWKER ENERGY, LLC [Member] | Darren Katic [Member] | Darren Katic [Member] | Manhattan Holdings, LLC [Member] | Sellers [Member] | Gerald Tywoniuk [Member] | Charles Moore [Member] | Kristian Andresen [Member] | Kristian Andresen [Member] | Manhattan Holdings, LLC and Mr.Tywoniuk [Member] | |||
Subsequent Event [Member] | Subsequent Event [Member] | |||||||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares issued for acquisition | ' | ' | 3,000,000 | ' | 1,500,000 | ' | 3,000,000 | ' | 1,500,000 | ' | ' | ' |
Warrant exercise price | ' | 0.2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Price per unit | ' | $0.10 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Possible additional shares required to issue | 33,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Value of purchased units | ' | ' | ' | $38,000 | ' | $90,000 | ' | $50,000 | ' | $15,000 | $25,000 | $120,312 |
Purchased units | ' | ' | ' | 380,000 | ' | 900,000 | ' | 500,000 | ' | 150,000 | 250,000 | 1,203,120 |
Liabilities assumed | ' | ' | ($135,199) | ' | ' | ' | ' | ' | ' | ' | ' | ' |
PRO_FORMA_FINANCIAL_INFORMATIO2
PRO FORMA FINANCIAL INFORMATION (Narrative) (Details) (SCNRG [Member]) | Feb. 04, 2014 |
SCNRG [Member] | ' |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ' |
Acquisition of additional working interest in DEEP lease | 20.51% |
PRO_FORMA_FINANCIAL_INFORMATIO3
PRO FORMA FINANCIAL INFORMATION (Schedule of Unaudited Pro Forma Consolidated Information) (Details) (USD $) | 6 Months Ended | |
Feb. 28, 2014 | Feb. 28, 2013 | |
PRO FORMA FINANCIAL INFORMATION [Abstract] | ' | ' |
Revenue | $58,681 | $30,632 |
Net loss | ($263,866) | ($70,199) |
Loss per share | ($0.01) | ' |
SUBSEQUENT_EVENT_Details
SUBSEQUENT EVENT (Details) (USD $) | 6 Months Ended | 0 Months Ended | 6 Months Ended | |||
Feb. 28, 2014 | Feb. 28, 2014 | Feb. 28, 2014 | Feb. 28, 2014 | Jan. 31, 2014 | Feb. 28, 2014 | |
Subsequent Event [Member] | Subsequent Event [Member] | Manhattan Holdings, LLC and Mr.Tywoniuk [Member] | Kristian Andresen [Member] | Kristian Andresen [Member] | ||
SCNRG [Member] | Subsequent Event [Member] | Subsequent Event [Member] | ||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' |
Value of purchased units | ' | ' | $364,972 | $120,312 | $15,000 | $25,000 |
Purchased units | ' | ' | 3,649,720 | 1,203,120 | 150,000 | 250,000 |
Proceeds received for common stock payable | $40,000 | $24,060 | ' | ' | ' | ' |
Proceeds received for common stock payable, shares | ' | 240,600 | ' | ' | ' | ' |