Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Jul. 31, 2013 | Nov. 12, 2013 | Jan. 31, 2013 | |
Document and Entity Information [Abstract] | ' | ' | ' |
Document Type | '10-K | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 31-Jul-13 | ' | ' |
Entity Registrant Name | 'DUMA ENERGY CORP | ' | ' |
Entity Central Index Key | '0001425808 | ' | ' |
Current Fiscal Year End Date | '--07-31 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 15,140,882 | ' |
Entity Public Float | ' | ' | $15,400,000 |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Jul. 31, 2013 | Jul. 31, 2012 |
Current assets | ' | ' |
Cash and cash equivalents | $317,881 | $1,102,987 |
Oil and gas revenues receivable | 725,691 | 457,567 |
Accounts receivable - related party | 176,773 | 117,618 |
Available for sale securities | ' | 313,446 |
Other current assets | 333,136 | 256,677 |
Other receivables, net | 23,730 | 517,441 |
Total current assets | 1,577,211 | 2,765,736 |
Oil and Gas Property, accounted for using the full cost method of accounting | ' | ' |
Evaluated property, net of accumulated depletion of $2,617,478 and $1,557,675, respectively; and accumulated impairment of $373,335 and $373,335, respectively | 16,867,029 | 15,622,826 |
Unevaluated property | 713,655 | 265,639 |
Restricted cash | 6,920,739 | 6,890,000 |
Other assets | 180,726 | 190,259 |
Property and equipment, net of accumulated depreciation of $62,749 and $36,572, respectively | 19,792 | 45,969 |
Total assets | 26,279,152 | 25,780,429 |
Current liabilities | ' | ' |
Accounts payable and accrued expenses | 3,779,401 | 2,298,838 |
Line of credit | ' | 300,000 |
Current portion of notes payable | 1,059,644 | 102,025 |
Asset retirement obligations - short term | 724,374 | 549,796 |
Derivative warrant liability | ' | 1,325,388 |
Advances | 180,804 | 55,161 |
Due to related parties | 15,046 | ' |
Total current liabilities | 5,759,269 | 4,631,208 |
Notes payable | 942,992 | 11,678 |
Asset retirement obligations - long term | 10,209,024 | 8,833,137 |
Total liabilities | 16,911,285 | 13,476,023 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Common stock, $.001 par; 500,000,000 authorized shares; 13,281,003 and 10,791,003 shares issued and outstanding in 2013 and 2012, respectively | 13,281 | 10,791 |
Additional paid in capital | 75,756,801 | 38,963,817 |
Accumulated other comprehensive loss | ' | -743,082 |
Accumulated deficit | -66,402,215 | -25,927,120 |
Total stockholders' equity | 9,367,867 | 12,304,406 |
Total liabilities and stockholders' equity | $26,279,152 | $25,780,429 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Jul. 31, 2013 | Jul. 31, 2012 | 16-May-12 |
CONSOLIDATED BALANCE SHEETS [Abstract] | ' | ' | ' |
Accumulated depletion on evaluated oil and gas property accounted for using the full cost method of accounting | $2,617,478 | $1,557,675 | ' |
Accumulated impairment on evaluated oil and gas property accounted for using the full cost method of accounting | 373,355 | 373,355 | ' |
Accumulated depreciation recorded for property and equipment | $62,749 | $36,572 | ' |
Common stock, par value per share | $0.00 | $0.00 | $0.00 |
Common stock, shares authorized | 500,000,000 | 500,000,000 | 20,000,000 |
Common stock, shares issued | 13,281,003 | 10,791,003 | 269,742,986 |
Common stock, shares outstanding | 13,281,003 | 10,791,003 | 269,742,986 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) [Abstract] | ' | ' |
Revenues | $7,070,540 | $7,165,233 |
Operating expenses | ' | ' |
Lease operating expense | 4,560,201 | 4,013,083 |
Depreciation, depletion, and amortization | 1,085,980 | 1,021,981 |
Accretion | 1,056,508 | 943,508 |
Consulting fees - related party | 196,384 | 189,372 |
Acquisition-related costs - related party | 37,234,752 | 4,367,750 |
General and administrative expense | 3,298,376 | 3,852,722 |
Total operating expenses | 47,432,201 | 14,388,416 |
Loss from operations | -40,361,661 | -7,223,183 |
Interest expense, net | -499,360 | -157,964 |
Net gain (loss) on sale of available for sale securities | -793,247 | 463,117 |
Gain on derivative warrant liability | 1,056,224 | 1,217,835 |
Net loss before income taxes | -40,598,044 | -5,700,195 |
Income tax benefit | 122,949 | 1,120,471 |
Net loss | -40,475,095 | -4,579,724 |
Other comprehensive income, net of tax: | ' | ' |
Change in market value of available for sale securities, including unrealized loss and reclassification adjustments to net income, net of income tax of $0 and $0 | ' | -743,082 |
Comprehensive Loss | ($40,475,095) | ($5,322,806) |
Basic and diluted loss per common share | ($3.11) | ($0.45) |
Weighted average shares outstanding (basic and diluted) | 13,028,592 | 10,218,355 |
CONSOLIDATED_STATEMENTS_OF_OPE1
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Parenthetical) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) [Abstract] | ' | ' |
Tax benefit on change in market value of available for sale securities, including reclassification adjustments to net income | $0 | $0 |
CONSOLIDATED_STATEMENT_OF_CHAN
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (USD $) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] |
Balance at Jul. 31, 2011 | $6,629,915 | $6,791 | $27,970,520 | ' | ($21,347,396) |
Balance, shares at Jul. 31, 2011 | ' | 6,790,816 | ' | ' | ' |
Common stock issued for: | ' | ' | ' | ' | ' |
Services | 620,155 | 200 | 619,955 | ' | ' |
Services, shares | ' | 200,189 | ' | ' | ' |
Acquisition | 9,500,000 | 3,800 | 9,496,200 | ' | ' |
Acquisition, shares | ' | 3,799,998 | ' | ' | ' |
Share-based compensation: | ' | ' | ' | ' | ' |
Amortization of fair value of stock options | 687,770 | ' | 687,770 | ' | ' |
Warrants granted to related party | 189,372 | ' | 189,372 | ' | ' |
Expiration of derivative warrant liability | ' | ' | ' | ' | ' |
Unrealized loss on available for sale securities | -743,082 | ' | ' | -743,082 | ' |
Net loss | -4,579,724 | ' | ' | ' | -4,579,724 |
Balance at Jul. 31, 2012 | 12,304,406 | 10,791 | 38,963,817 | -743,082 | -25,927,120 |
Balance, shares at Jul. 31, 2012 | 10,791,003 | 10,791,003 | ' | ' | ' |
Common stock issued for: | ' | ' | ' | ' | ' |
Acquisition | 35,396,800 | 2,490 | 35,394,310 | ' | ' |
Acquisition, shares | ' | 2,490,000 | ' | ' | ' |
Share-based compensation: | ' | ' | ' | ' | ' |
Amortization of fair value of stock options | 933,126 | ' | 933,126 | ' | ' |
Warrants granted to related party | 196,384 | ' | 196,384 | ' | ' |
Expiration of derivative warrant liability | 269,164 | ' | 269,164 | ' | ' |
Unrealized loss on available for sale securities | ' | ' | ' | 743,082 | ' |
Net loss | -40,475,095 | ' | ' | ' | -40,475,095 |
Balance at Jul. 31, 2013 | $9,367,867 | $13,281 | $75,756,801 | ' | ($66,402,215) |
Balance, shares at Jul. 31, 2013 | 13,281,003 | 13,281,003 | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Cash Flows From Operating Activities | ' | ' |
Net loss | ($40,475,095) | ($4,579,724) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation, depletion, and amortization | 1,085,980 | 1,021,981 |
Accretion | 1,056,508 | 943,508 |
Change in allowance for doubtful accounts | 57,491 | -26,563 |
Change in deferred taxes | ' | -130,200 |
(Gain) loss on sale of available for sale securities | 517,920 | -463,117 |
Impairment of available for sale securities | 275,327 | ' |
Warrants granted to related party | 196,384 | 189,372 |
Common stock granted for services and for investor relations | ' | 620,155 |
Acquisition-related costs - related party | 37,234,752 | 4,367,750 |
Share based compensation - amortization of the fair value of stock options | 933,126 | 687,770 |
Gain on derivative warrant liability | -1,056,224 | -1,217,835 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | 168,096 | 197,885 |
Advances | 125,643 | 55,161 |
Accounts payable and accrued expenses | 491,956 | -948,070 |
Settlement of asset retirement obligations | -318,225 | -178,539 |
Accounts receivable - related party | -44,109 | -47,738 |
Other assets | 189,177 | 134,280 |
Net cash provided by operating activities | 438,707 | 626,076 |
Cash Flows From Investing Activities | ' | ' |
Purchases of oil and gas properties | -1,379,946 | -2,221,242 |
Purchases of property, equipment and domain name | ' | -66,847 |
Change in restricted cash | -30,739 | -160,213 |
Purchase of available for sale securities | -24,593 | -702,959 |
Proceeds from sale of available for sale securities | 287,874 | 4,009,548 |
Proceeds from sale of oil and gas properties | 195,563 | ' |
Net cash provided by (used in) investment activities | -951,841 | 858,287 |
Cash Flows From Financing Activities | ' | ' |
Proceeds from notes payable | ' | 300,000 |
Payments on notes payable | -271,972 | -1,748,752 |
Payments on notes payable to related parties | ' | -14,723 |
Net cash used in financing activities | -271,972 | -1,463,475 |
Net increase (decrease) in cash | -785,106 | 20,888 |
Cash at beginning of period | 1,102,987 | 1,082,099 |
Cash at end of period | 317,881 | 1,102,987 |
Supplemental Disclosures: | ' | ' |
Interest paid in cash | 207,269 | 38,129 |
Income taxes paid in cash | 42,483 | 4,847 |
Non-cash investing and financing | ' | ' |
Accounts payable for oil and gas assets | 188,607 | 244,793 |
Asset retirement obligation purchased | ' | 97,374 |
Asset retirement obligation - change in estimate | 786,120 | 1,827,889 |
Asset retirement obligations incurred | 26,500 | 1,389 |
Asset retirement obligation sold | 438 | 32,772 |
Acquisition of SPE Navigation I, LLC for Duma common stock, including asset retirement obligation assumed of $2,268,156 | ' | 5,132,250 |
Adjustment of purchase price of acquisition: environmental liability acquired | ' | 112,500 |
Acquisition of Namibia Exploration, Inc. | 562,048 | ' |
Unrealized loss on available for sale securities | ' | 743,082 |
Note payable for purchase of vehicle | ' | 18,027 |
Note payable for prepaid insurance | 260,905 | 227,912 |
Expiration of derivative warrant liability | $269,164 | ' |
Description_of_Business_and_Su
Description of Business and Summary of Significant Accounting Policies | 12 Months Ended | ||||
Jul. 31, 2013 | |||||
Description of Business and Summary of Significant Accounting Policies [Abstract] | ' | ||||
Description of Business and Summary of Significant Accounting Policies | ' | ||||
Note 1 - Description of Business and Summary of Significant Accounting Policies | |||||
Description of business and basis of presentation | |||||
Duma Energy Corp. ("we", "us", "Duma", the "Company") was formed for the purpose of oil and gas exploration, development, and production. We own 100% of Penasco Petroleum Inc. ("Penasco"), a Nevada corporation incorporated on November 23, 2005 and 100% of Galveston Bay, LLC, ("GBE"), a Texas limited liability company, 100% of SPE Navigation I, LLC ("SPE") a Nevada limited liability company and 100% of Namibia Exploration, Inc. ("NEI") a Nevada corporation. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"). | |||||
Reclassifications | |||||
Certain prior year amounts have been reclassified to conform with the current presentation. | |||||
Principles of consolidation | |||||
The accompanying consolidated financial statements include the accounts of Duma and our wholly owned subsidiaries, Penasco, SPE, GBE and NEI. All significant intercompany accounts and transactions have been eliminated in consolidation. | |||||
Use of estimates | |||||
The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, if any, at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the respective reporting periods. We base our estimates and judgments on historical experience and on various other assumptions and information that we believe to be reasonable under the circumstances. Estimates and assumptions about future events and their effects cannot be perceived with certainty and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as our operating environment changes. | |||||
Significant areas requiring management's estimates and assumptions include the determination of the fair value of transactions involving stock-based compensation and financial instruments, estimates of the costs and timing of asset retirement obligations, and oil and natural gas proved reserve quantities. Oil and natural gas proved reserve quantities which form the basis for the calculation of amortization of oil and natural gas properties and for asset impairment tests. Management emphasizes that reserve estimates are inherently imprecise and that estimates of more recent reserve discoveries are more imprecise than those for properties with long production histories. | |||||
Actual results may differ from the estimates and assumptions used in the preparation of our consolidated financial statements. | |||||
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. | |||||
Our functional currency is the United States dollars. Transactions denominated in foreign currencies are translated into their United States dollar equivalents using current exchange rates. Monetary assets and liabilities are translated using exchange rates that prevailed as of the balance sheet date. Non-monetary assets and liabilities are translated using exchange rates that prevailed as of the transaction date. Revenue, if applicable and expenses are translated using average exchange rates over the accounting period. We have had no revenue denominated in foreign currencies. Gains or losses resulting from foreign currency transactions are included in results of operations. | |||||
Receivables and allowance for doubtful accounts | |||||
Oil and gas revenues receivable are recorded at the invoiced amount and do not bear any interest. We regularly review collectability and establish or adjust an allowance for uncollectible amounts as necessary using the specific identification method. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Management has determined that a reserve for uncollectible amounts was not required in the periods presented. | |||||
Accounts receivable - related party includes the oil and gas revenue receivable from our Barge Canal properties, which, up until September 1, 2013, were operated by a company owned by one of our former officers who was also a director, and joint interest billings receivable from two working interest partners who are related to the Chief Financial Officer and the Chief Executive Officer. | |||||
Other receivables consist of joint interest billings due to us from participants holding a working interest in oil and gas properties that we operate. | |||||
We regularly review collectability and establish or adjust an allowance for uncollectible amounts as necessary using the specific identification method. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of July 31, 2013 and 2012, we have reserved $58,585 and $1,302, respectively, for potentially uncollectable other receivables. | |||||
Available for sale securities | |||||
We invest in marketable equity securities which are classified as available for sale. The first in first out method is used to determine the cost basis of our equity securities sold. Available-for-sale securities are marked to market based on the fair values of the securities determined in accordance with ASC Section 820 (Fair Value Measurement), with the unrealized gains and losses, net of tax, reported as a component of Accumulated other comprehensive income (loss). | |||||
Other current assets | |||||
Other current assets consist primarily of prepaid insurance, prepaid interest expense, prepayments made towards properties not operated by us, and accrued interest on our deposits. | |||||
Concentrations | |||||
Our operations are concentrated in Texas and the majority of our operations are conducted offshore in Galveston Bay. We operate in the oil and gas exploration and production industry. If the oil and natural gas exploration and production industry as a whole were adversely affected, for example by weather, supply shortages, or other factors, we would also experience adverse effects. Because our properties are offshore, we are also vulnerable to adverse weather. | |||||
For the year ended July 31, 2013, 85% of our revenue was attributable to one purchaser. At July 31, 2013, this same purchaser accounted for 76% of our accounts receivable. For the year ended July 31, 2012, 67% of our revenue was attributable to one purchaser. At July 31, 2012, this same purchaser accounted for 79% of our accounts receivable. | |||||
We place cash with high quality financial institutions and at times may exceed the federally insured limits. We have not experienced a loss in such accounts nor do we expect any related losses in the near term. | |||||
Oil and natural gas properties | |||||
We account for our oil and natural gas producing activities using the full cost method of accounting as prescribed by the United States Securities and Exchange Commission (SEC). Under this method, subject to a limitation based on estimated value, all costs incurred in the acquisition, exploration, and development of proved oil and natural gas properties, including internal costs directly associated with acquisition, exploration, and development activities, the costs of abandoned properties, dry holes, geophysical costs, and annual lease rentals are capitalized within a cost center. Costs of production and general and administrative corporate costs unrelated to acquisition, exploration, and development activities are expensed as incurred. | |||||
Costs associated with unevaluated properties are capitalized as oil and natural gas properties but are excluded from the amortization base during the evaluation period. When we determine whether the property has proved recoverable reserves or not, or if there is an impairment, the costs are transferred into the amortization base and thereby become subject to amortization. | |||||
We assess all items classified as unevaluated property on at least an annual basis for inclusion in the amortization base. We assess properties on an individual basis or as a group if properties are individually insignificant. The assessment includes consideration of the following factors, among others: intent to drill; remaining lease term; geological and geophysical evaluations; drilling results and activity; the assignment of proved reserves; and the economic viability of development if proved reserves are assigned. During any period in which these factors indicate that there would be impairment, or if proved reserves are assigned to a property, the cumulative costs incurred to date for such property are transferred to the amortizable base and are then subject to amortization. | |||||
Capitalized costs included in the amortization base are depleted using the unit of production method based on proved reserves. Depletion is calculated using the capitalized costs included in the amortization base, including estimated asset retirement costs, plus the estimated future expenditures to be incurred in developing proved reserves, net of estimated salvage values. | |||||
Sales or other dispositions of oil and natural gas properties are accounted for as adjustments to capitalized costs, with no gain or loss recorded unless the ratio of cost to proved reserves would significantly change. | |||||
Impairment | |||||
The net book value of all capitalized oil and natural gas properties within a cost center, less related deferred income taxes, is subject to a full cost ceiling limitation which is calculated quarterly. Under the ceiling limitation, costs may not exceed an aggregate of the present value of future net revenues attributable to proved oil and natural gas reserves discounted at 10 percent using current prices, plus the lower of cost or market value of unproved properties included in the amortization base, plus the cost of unevaluated properties, less any associated tax effects. Any excess of the net book value, less related deferred tax benefits, over the ceiling is written off as expense. Impairment expense recorded in one period may not be reversed in a subsequent period even though higher oil and gas prices may have increased the ceiling applicable to the subsequent period. During the years ended July 31, 2013 and July 31, 2012, the ceiling exceeded the net book value of the property and it was not necessary to record an impairment charge. | |||||
Asset retirement obligation | |||||
We record the fair value of an asset retirement cost, and corresponding liability as part of the cost of the related long-lived asset and the cost is subsequently allocated to expense using a systematic and rational method. We record an asset retirement obligation to reflect our legal obligations related to future plugging and abandonment of our oil and natural gas wells and gathering systems. We estimate the expected cash flow associated with the obligation and discount the amount using a credit-adjusted, risk-free interest rate. At least annually, we reassess the obligation to determine whether a change in the estimated obligation is necessary. We evaluate whether there are indicators that suggest the estimated cash flows underlying the obligation have materially changed. Should those indicators suggest the estimated obligation may have materially changed on an interim basis (quarterly), we will update our assessment accordingly. Additional retirement obligations increase the liability associated with new oil and natural gas wells and gathering systems as these obligations are incurred. | |||||
Restricted cash | |||||
Restricted cash consists of certificates of deposit that have been posted as collateral for letters of credit supporting bonds guaranteeing remediation of our oil and gas properties in Texas and escrow funds deposited directly with regulatory authorities. As of July 31, 2013 and 2012, restricted cash totaled $6,920,739 and $6,890,000, respectively. | |||||
Other assets | |||||
Other assets at July 31, 2013 and 2012 consisted primarily of prepaid land use fees, which are payments that cover multiple years (typically ten years) rental for easements and surface leases. These are paid as they come due on an ongoing basis and amortized over the rental period. In addition, other assets also include a domain name for $30,267, which is an intangible asset with an indefinite life due to the fact that it is renewable annually for nominal cost. We evaluate intangible assets with an indefinite life for possible impairment at least annually by comparing the fair value of the asset with its carrying value. | |||||
Property and equipment, other than oil and gas | |||||
Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related asset, generally three to five years. Fully depreciated assets are retained in property and accumulated depreciation accounts until they are removed from service. We perform ongoing evaluations of the estimated useful lives of the property and equipment for depreciation purposes. Maintenance and repairs are expensed as incurred. | |||||
Impairment of long-lived assets | |||||
We periodically review our long-lived assets, other than oil and gas property, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. We recognize an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset's estimated fair value and its book value. We recorded no impairment on our non-oil and gas long-lived assets during the years ended July 31, 2013 and 2012, respectively. | |||||
Advances | |||||
Advances consist of prepayments received from working interest partners pertaining to their share of the costs of drilling oil and gas wells. Partners are billed in advance for the estimated cost to drill a well and as the work proceeds, the prepayment is applied against their share of the actual drilling cost. As of July 31, 2013 and 2012, advances totaled $180,804 and $55,161, respectively. | |||||
Revenue recognition | |||||
We recognize revenue when persuasive evidence of an arrangement exists, services have been rendered, the sales price is fixed or determinable, and collectability is reasonably assured. We follow the "sales method" of accounting for oil and natural gas revenue, so we recognize revenue on all natural gas or crude oil sold to purchasers, regardless of whether the sales are proportionate to our ownership in the property. Actual sales of gas are based on sales, net of the associated volume charges for processing fees and for costs associated with delivery, transportation, marketing, and royalties in accordance with industry standards. Operating costs and taxes are recognized in the same period in which revenue is earned. Severance and ad valorum taxes are reflected as a component of lease operating expense. | |||||
Income taxes | |||||
We account for income taxes using the asset and liability method. Under this method, deferred income tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. | |||||
Fair value | |||||
Accounting standards regarding fair value of financial instruments define fair value, establish a three-level hierarchy which prioritizes and defines the types of inputs used to measure fair value, and establish disclosure requirements for assets and liabilities presented at fair value on the consolidated balance sheets. | |||||
Fair value is the amount that would be received from the sale of an asset or paid for the transfer of a liability in an orderly transaction between market participants. A liability is quantified at the price it would take to transfer the liability to a new obligor, not at the amount that would be paid to settle the liability with the creditor. | |||||
The three-level hierarchy is as follows: | |||||
● | Level 1 inputs consist of unadjusted quoted prices for identical instruments in active markets. | ||||
● | Level 2 inputs consist of quoted prices for similar instruments. | ||||
● | Level 3 valuations are derived from inputs which are significant and unobservable and have the lowest priority. | ||||
Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. We have determined that certain warrants outstanding during the period covered by these financial statements qualify as derivative financial instruments under the provisions of FASB ASC Topic No. 815-40, " Derivatives and Hedging - Contracts in an Entity's Own Stock." (See Note 8 - Fair Value). | |||||
The fair value of these warrants was determined using a lattice model with any change in fair value during the period recorded in earnings as "Gain on derivative warrant liability." | |||||
Significant inputs used to calculate the fair value of the warrants include expected volatility, risk-free interest rate and management's assumptions regarding the likelihood of a future repricing of these warrants pursuant to the down-round provision. | |||||
We had no financial assets and liabilities that were accounted for at fair value on a recurring basis as of July 31, 2013 and o ur derivative warrant liability was our only financial asset or liability that was accounted for at fair value, using a Level 3 valuation technique, on a recurring basis as of July 31, 2012. The carrying amounts reported in the balance sheet for cash, accounts receivable, accounts receivable - related party, accounts payable and accrued expenses, and notes payable approximate their fair market value based on the short-term maturity of these instruments. | |||||
Stock-based compensation | |||||
ASC 718, "Compensation-Stock Compensation" requires recognition in the financial statements of the cost of employee services received in exchange for an award of equity instruments over the period the employee is required to perform the services in exchange for the award (presumptively the vesting period). We measure the cost of employee services received in exchange for an award based on the grant-date fair value of the award. | |||||
We account for non-employee share-based awards based upon ASC 505-50, "Equity-Based Payments to Non-Employees." ASC 505-50 requires the costs of goods and services received in exchange for an award of equity instruments to be recognized using the fair value of the goods and services or the fair value of the equity award, whichever is more reliably measurable. The fair value of the equity award is determined on the measurement date, which is the earlier of the date that a performance commitment is reached or the date that performance is complete. Generally, our awards do not entail performance commitments. When an award vests over time such that performance occurs over multiple reporting periods, we estimate the fair value of the award as of the end of each reporting period and recognize an appropriate portion of the cost based on the fair value on that date. When the award vests, we adjust the cost previously recognized so that the cost ultimately recognized is equivalent to the fair value on the vesting date, which is presumed to be the date performance is complete. | |||||
We recognize the cost associated with share-based awards that have a graded vesting schedule on a straight-line basis over the requisite service period of the entire award. | |||||
Stock Split | |||||
On April 4, 2012, we effected a 1-for-25 reverse stock split. All share and per share amounts have been retroactively restated to reflect the reverse split. This presentation is consistent with the guidance in ASC 260-10-55-12, Earnings Per Share, which requires retroactive restatement of earnings per share if a capital structure change due to a stock dividend, stock split or reverse split occurs after the date of the latest balance sheet, but before the release of the financial statements or the effective date of the registration statement, whichever is later. | |||||
Earnings per share | |||||
We compute basic earnings per share using the weighted average number of shares of common stock outstanding during each period. Diluted earnings per share includes the dilutive effects of common stock equivalents on an "as if converted" basis. For the years ended July 31, 2013 and 2012, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share. | |||||
Contingencies | |||||
Legal | |||||
We are subject to legal proceedings, claims and liabilities which arise in the ordinary course of business. We accrue for losses associated with legal claims when such losses are probable and can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. Legal fees are charged to expense as they are incurred. See Note 12 - Commitments and Contingencies for more information on legal proceedings. | |||||
Environmental | |||||
We accrue for losses associated with environmental remediation obligations when such losses are probable and can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. Costs of future expenditures for environmental remediation obligations are not discounted to their present value. Recoveries of environmental remediation costs from other parties are recorded at their undiscounted value as assets when their receipt is deemed probable. | |||||
Accumulated Other Comprehensive Income (Loss), net of tax | |||||
We follow the provisions of ASC 220, "Comprehensive Income", which establishes standards for reporting comprehensive income. In addition to net loss, comprehensive loss includes all changes to equity during a period, except those resulting from investments and distributions to the owners of the Company. The components of accumulated other comprehensive loss: | |||||
Accumulated Other Comprehensive Loss | |||||
Accumulated other comprehensive loss at July 31, 2012 | $ | (743,082 | ) | ||
Reclassification into earnings | 743,082 | ||||
Accumulated other comprehensive loss at July 31, 2013 | $ | - | |||
Recent accounting pronouncements | |||||
Recently issued or adopted accounting pronouncements are not expected to have, or did not have, a material impact on our financial position or results from operations. |
Acquisitions
Acquisitions | 12 Months Ended | ||||
Jul. 31, 2013 | |||||
Acquisitions [Abstract] | ' | ||||
Acquisitions | ' | ||||
Note 2 - Acquisitions | |||||
SPE Navigation I, LLC | |||||
On September 23, 2011, Duma acquired SPE, which owned 25% of the working interest in the oil and gas properties originally owned by Galveston Bay Energy, LLC and 1,000,000 shares of Hyperdynamics Corporation, a public company traded on the New York Stock Exchange (NYSE:HDY). The total purchase price consisted of 3,799,998 shares of Duma's common stock. We acquired 100% of the membership interest in SPE and thus SPE is our wholly owned subsidiary. | |||||
The transaction was a related party transaction because SPE was owned by companies controlled by our CEO, his brother-in-law, and his sister-in-law, and SPE was managed by our CEO's father-in-law. The purchase price was calculated as $9,500,000, based on the quoted market price of our stock on the date of the acquisition. The assets and liabilities were recorded at fair value on the date of the acquisition, $5,132,250. The excess purchase price over the net assets acquired was $4,367,750, which was recorded as an acquisition-related expense because this was a related party transaction. | |||||
As of the acquisition date, the working interests previously owned by SPE were conveyed to GBE. Thus, all oil and gas revenues after the SPE acquisition were attributed to GBE. Our consolidated statements for 2013 include the results of SPE, and accordingly the 100% acquired working interest, for the entire year. Our consolidated statements for 2012 include the results of SPE after September 23, 2011. | |||||
Supplemental pro forma information (unaudited) | |||||
The unaudited pro forma results presented below for the year ended July 31, 2012 have been prepared to give effect to the purchase of SPE as if it had been consummated on August 1, 2011. The unaudited pro forma results do not purport to represent what our results of operations actually would have been if the acquisition had been completed on such date or to project our results of operations for any future date or period. | |||||
Revenues | $ | 7,313,232 | |||
Loss from operations | (7,419,747 | ) | |||
Net loss | (4,776,288 | ) | |||
Loss per share, basic and diluted | (0.47 | ) | |||
Namibia Exploration, Inc. | |||||
On August 7, 2012, we entered into a Share Exchange Agreement (the "Agreement"), which was closed on September 6, 2012, under which we purchased Namibia Exploration, Inc. ("NEI"), a corporation organized under the laws of the state of Nevada for the issuance of up to 24,900,000 shares of our common stock as described below. Prior to the acquisition, NEI was directly and indirectly owned and controlled by the CEO, his brother-in-law, and his father-in-law. As a result, the acquisition was accounted for as an asset purchase from an entity under common control and the asset was recorded at NEI's historical cost. NEI originally acquired the concession from a subsidiary of Hydrocarb Corporation ("Hydrocarb") in exchange for a farm-in fee, as discussed below, totaling $2,400,000, payable over two years. Hydrocarb is partly owned by the uncle of the Chief Executive Officer's wife and brother-in-law. Because the $2,400,000 fee was a related party transaction, and accordingly presumed not to be arms-length, and because there was substantial uncertainty about the realizability of the fees paid to Hydrocarb given that the concession was unproved, management concluded that Hydrocarb's historical expenditures of $562,048 (which consists primarily of fees paid to the Namibian government for the concession) represented the fair value of the asset and NEI's cost basis in the asset. The farm-in agreement also provides for preferential offerings of other international oil and gas opportunities similar to the concession in Namibia. | |||||
NEI was formed in February 2012 and its sole asset was this oil and gas concession in Namibia, Africa. NEI had no operations other than ownership of this oil and gas concession; and accordingly, the transaction was accounted for as an asset purchase. Duma has assumed payment of the fee, as described below. Due to the fact that the former owners of NEI had no significant historical cost basis in NEI and the fact that the acquisition is accounted for as a related party transaction, the consideration that Duma paid beyond NEI's cost basis ($562,048) is considered compensatory and thus an expense of the acquisition. The consideration included stock granted at the closing of the transaction as well as series of stock grants that are contingent upon the achievement of certain market conditions. The value of the total consideration, including contingent stock and the liabilities assumed in excess of NEI's assets, was computed as described below. $37,234,752 is reflected in our statement of operations as Acquisition-related costs - related party in conjunction with this transaction. | |||||
As a result of the completion of the acquisition, NEI became a wholly-owned subsidiary of Duma. NEI holds the rights to 39% working interest (43.33% cost responsibility) in an onshore petroleum concession (the "Concession"), located in the Republic of Namibia, measuring approximately 5.3 million acres and covered by Petroleum Exploration License No. 0038 as issued by the Republic of Namibia Ministry of Mines and Energy. | |||||
The assignment of the 39% working interest to NEI from Hydrocarb Namibia, the operator of the concession, is subject to the prior approval of the government of the Republic of Namibia, which was obtained during August 2012. Duma now holds working interest in the Concession in partnership with the National Petroleum Corporation of Namibia Ltd. ("NPC Namibia") and Hydrocarb Namibia Energy Corporation ("Hydrocarb Namibia"), a company chartered in the Republic of Namibia and which is a majority owned subsidiary of Hydrocarb Corporation ("Hydrocarb"), a company organized under the laws of the State of Nevada. Hydrocarb Namibia, as operator of the Concession, now holds at 51% working interest (56.67% cost responsibility) in the Concession and NPC Namibia now holds a 10% carried working interest in the Concession. We have entered into a joint operating agreement with Hydrocarb Namibia effective August 29, 2012, that covers operations for the Concession. | |||||
Consideration for the acquisition of NEI | |||||
Pursuant to the terms of the Agreement, Duma issued 2,490,000 shares of common stock in September 2012 at the closing. Additional shares are required to be issued as consideration for the Acquisition, in accordance with the following milestones which must be reached within 10 years after the closing of the acquisition: | |||||
(a) a further 2,490,000 of the Shares will be issued when and if Duma's 10-day volume-weighted average market capitalization reaches $82,000,000; | |||||
(b) a further 7,470,000 of the Shares will be issued when and if Duma's 10-day volume-weighted average market capitalization reaches $196,000,000; and | |||||
(c) a further and final 12,450,000 of the Shares will be issued when and if Duma's 10-day volume-weighted average market capitalization reaches $434,000,000. | |||||
Duma will maintain 100% ownership of NEI after Closing even if one or more of the market capitalization milestones have not been attained within 10 years from the Closing. The accounting for this stock award is discussed in the section "Valuation" below. | |||||
Hydrocarb agreement | |||||
In conjunction with the execution of the Agreement, and as a condition of Closing, Duma has entered into a Consulting Services Agreement with Hydrocarb (the "Consulting Agreement"), whereby Hydrocarb will provide various consulting services with respect to Duma's business ventures in Namibia and whereby Hydrocarb has acknowledged and agreed that the obligations of NEI under its existing Farmin Opportunity Report with Hydrocarb (the "FOR") will be satisfied in exchange for Duma paying a consulting fee (the "Fee") to Hydrocarb of $2,400,000 as follows: | |||||
(a) payment on the later of the effective date of the Consulting Agreement or 15 days from the receipt of the working interest assignment under the FOR to be processed by Hydrocarb to be signed by Namibia's Minister of Mines and Energy, by Duma to Hydrocarb of $800,000 in cash or stock (at a deemed conversion price which equates to the then previous 60-day volume-weighted average trading price of Duma's common stock) or a combination of cash and stock. Duma has the sole and absolute discretion to select the manner of payment. | |||||
(b) for the remaining $1,600,000 by way of the issuance of a promissory note in favor of Hydrocarb in the principal amount of $1,600,000 (the "Promissory Note"), with interest accruing on the principal amount at the rate of 5% per annum, calculated semi-annually and payable in arrears, and of which $800,000 of the principal amount plus accrued interest is due on or before the first anniversary of the effective date and the remaining $800,000 of the principal amount plus accrued interest is due on or before the second anniversary of the effective date. Duma has the sole and absolute discretion to select whether payment of the note will be in stock (at a deemed conversion price which equates to the then previous 60-day volume-weighted average trading price of Duma's common stock), cash, or a combination of cash and stock. | |||||
Duma is required to pay a late fee of 10% per quarter for any outstanding balance of the Fee under the Consulting Agreement which will commence 30 calendar days from the date that the Fee or portion of the Fee is due, which may only be paid in cash. Duma has not yet paid the first installment as described in (a) above. Thus, the fee, which totals $320,000 as of July 31, 2013, has been accrued and it is characterized as interest expense. The fee is included in the balance sheet caption "Accounts payable and accrued expenses". | |||||
Valuation | |||||
NEI's cost basis in the concession is $562,048. Since Duma acquired the liability due to Hydrocarb, Duma acquired a net liability of $1,837,952. The assets and liabilities were recorded at NEI's carrying value on the date of the acquisition and the excess purchase price over the net assets acquired was recorded as an acquisition-related expense (compensation) because this was a related party transaction. The purchase price consists of the 2,490,000 shares that were awarded at closing, which were valued using the closing market price of the stock on the date of grant, and the contingent stock grant. The fair value of equity compensation that vests upon the attainment of a market condition (in this case, market capitalization) must be estimated and recorded on the date of the grant. The fair value of the contingent stock grant was valued in accordance with ASC 820 - Fair Value Measurements. The determination of fair value used a market approach weighted at 75% and the income approach (discounted cash flows) weighted at 25%. The computations included consideration of projections of the future results of Duma and NEI, using multiple probability-weighted scenarios, and projections of Duma's capital structure. | |||||
As of July 31, 2013, we had recognized $37,234,752 of expense associated with the acquisition of NEI, which consisted of the assumption of NEI's net liability of $1,837,952, $3,784,800 associated with the 2,490,000 shares issued at the closing date of the acquisition and $31,612,000 associated with the contingent consideration. |
Available_for_Sale_Securities
Available for Sale Securities | 12 Months Ended |
Jul. 31, 2013 | |
Available for Sale Securities [Abstract] | ' |
Available for Sale Securities | ' |
Note 3 - Available for Sale Securities | |
Beginning in the quarter ended October 31, 2011, we owned marketable equity securities, which are classified as available for sale. | |
We acquired securities with a market value of $3,900,000 in conjunction with our acquisition of SPE. (See Note 2 - Acquisitions - SPE Navigation I, LLC). During the year ended July 31, 2012, we received cash proceeds of $4,009,548 from sales of securities with a cost basis of $3,546,431; thus, we had a realized gain on sale of available for sale securities of $463,117. During the year ended July 31, 2012, we also purchased securities at a market price of $702,959 and reclassified $6,383 unrealized loss from other comprehensive loss into earnings. | |
During September 2012, we received cash proceeds of $145,237 from sales of securities with a cost basis of $607,201; thus, we had a realized loss on sale of available for sale securities of $461,964. In October 2012, we recognized an other than temporary impairment of $275,327 resulting in a new cost basis in the stock of $174,000. | |
During December 2012, we received cash proceeds of $142,637 from sales of securities with a cost basis of $198,593; thus, we had a realized loss on sale of available for sale securities of $55,956. We reclassified $743,082 unrealized loss from other comprehensive loss into earnings in conjunction with these sales and the impairment. | |
As of July 31, 2013, we do not hold any available for sale securities. |
Oil_and_Gas_Properties
Oil and Gas Properties | 12 Months Ended | ||||||||
Jul. 31, 2013 | |||||||||
Oil and Gas Properties [Abstract] | ' | ||||||||
Oil and Gas Properties | ' | ||||||||
Note 4 - Oil and Gas Properties | |||||||||
Oil and natural gas properties as of July 31, 2013 and July 31, 2012 consisted of the following: | |||||||||
31-Jul-13 | 31-Jul-12 | ||||||||
Evaluated Properties | |||||||||
Costs subject to depletion, net of accumulated impairment of $373,355 and $373,355, respectively | $ | 19,484,507 | $ | 17,180,501 | |||||
Accumulated depletion | (2,617,478 | ) | (1,557,675 | ) | |||||
Total evaluated properties | 16,867,029 | 15,622,826 | |||||||
Unevaluated properties | 713,655 | 265,639 | |||||||
Net oil and gas properties | $ | 17,580,684 | $ | 15,888,465 | |||||
Evaluated properties | |||||||||
We incurred geological and geophysical costs of $157,818 during the year ended July 31, 2013. | |||||||||
Offshore property | |||||||||
Our subsidiary, GBE, has interests in multiple leases with the State of Texas General Land Office in Galveston Bay. Through GBE, our primary operations are offshore in Galveston Bay. Significant changes to our offshore assets in Galveston Bay during the year ended July 31, 2013 include: | |||||||||
● | costs associated with a development well, the State Tract 9-12A#4 well in Galveston Bay totaling $447,511; | ||||||||
● | costs for a recompletion in Galveston Bay totaling $361,372; and | ||||||||
● | increase in asset retirement obligations of $803,788 primarily due to changes in timing and in estimated costs for the gathering systems located in Galveston Bay. | ||||||||
Onshore property | |||||||||
As of July 31, 2013, we owned interests in properties in Texas and Illinois as follows: | |||||||||
Illinois | |||||||||
We owned 10% working interest in multiple leases in or near Markham City, Illinois that are operated by Core Minerals Management II, LLC ("Core") in accordance with a farmout agreement, which we entered into during January 2011. After payout of the property, $1,350,000 or 29,000 barrels, whichever comes first, provided that we hold less than 25% working interest in the property at payout, our working interest will be adjusted to 25%. During fiscal 2012, the operator drilled wells in the contract area and commenced a pilot waterflood project to re-pressurize the reservoir and enhance recovery of oil from the area. The wells in the project area produce oil. | |||||||||
Texas | |||||||||
We own 100% working interest and a 72.5% net revenue interest in approximately 81 acres of an oil and gas lease (the "Welder Lease") located in Calhoun County, Texas. There are two productive wells on the property, which was operated by a company owned by one of our former officers until September 1, 2013. Effective September 1, 2013, we took over operations of the lease. | |||||||||
In September 2011, we purchased a non-operated working interest in mineral leases covering 460 acres onshore in Duval County, Texas (the "Palacios Lease"). Under the agreement, the operator commenced drilling a well, the Palacios #1, during November 2011. Our working interest in the lease area is 6.70732% to the casing point of the first well drilled and 5.5% after the casing point of the initial well and for subsequent operations in the lease area. Our net revenue interest in the prospect is 4.125%. The well produces primarily gas. | |||||||||
In April 2012, we acquired 25% working interest in Chapman Ranch II Prospect in Nueces County, Texas (the "Chapman Prospect"). According to the terms of the agreement, we would pay 31.25% of costs to casing point of the initial well and of the plug and abandonment costs if the initial well is a dry hole and 25% of costs after casing point. For subsequent wells, we would pay 25% of the costs before and after the casing point. The well was drilled in June 2012; however, the first completion zone was non-economic. $265,639 in costs, including acquisition costs of $58,805 and drilling costs of $206,834, were reflected as unevaluated property as of July 31, 2012. During October 2012, we participated in a recompletion operation which resulted in the completion of the well into an upper zone, however commercial production was not established. Another rework operation was attempted in June 2013, which was unsuccessful. Because of the lack of success, management determined that there would be no reserves ascribed and the prospect is classified as evaluated as of the July 31, 2013. | |||||||||
During August 2012, we leased approximately 190 acres of land in Bee County, Texas (the "Curlee Prospect"). The operator of the project was Carter E&P, a company owned by our former Vice President of Operations. We had a 50% working interest in the project, 25% of which was carried to the casing point by the other participants in the initial well. Because we took a 25% additional interest, the portion of the working interest that we pay, prior to the casing point, is 33.3%. After the casing point and for all costs in future wells, we will be responsible for 50% of the costs. We paid $45,931 in acquisition and land costs for this prospect. We received a bonus of $51,589 from the other parties in the well, which was reflected as a reduction of capitalized costs in accordance with full cost accounting. During the quarter ended October 31, 2012, we drilled a well on the property, the Curlee No. 1 well, which was plugged and abandoned. | |||||||||
In December 2012, we acquired a 366.85 acre tract of property, the Dix Prospect, in San Patricio County, Texas. We paid $76,938 in acquisition and land costs. In February 2013, we sold 75% working interest in the prospect to partners on a third for a quarter basis, under which the 75% interest holders will carry 25% of the working interest to the casing point of the initial well drilled on the prospect. We also sold 2% of the carried working interest to Carter E&P, a company owned by our former Vice President of Operations. Thus we retained a 23% working interest which is carried to the casing point of the initial well. We received proceeds of $109,328 from the other parties in the prospect, which was reflected as a reduction of capitalized costs in accordance with full cost accounting. The initial well was drilled in May 2013, but it was determined that the well could not produce economically. Accordingly, it was not completed. | |||||||||
During April 2013, we purchased a 12.5% working interest in a 260.12 acre tract of property, the Melody Prospect, in Bee County, Texas. The operator of the project is Carter E&P, a company owned by our former Vice President of Operations. We incurred acquisition costs of $7,355 on the prospect. The well was drilled in June 2013 and it was a dry hole. | |||||||||
We incurred $210,588 of exploratory drilling costs during the year ended July 31, 2013 on the Chapman, Curlee, Dix, and Melody prospects. | |||||||||
Effective September 1, 2013, we conveyed our interest in the Dix, Melody, Curlee, Palacios and Illinois properties to Carter E&P in conjunction with our termination of Steven Carter as Vice President of Operations for $0 cash proceeds and the assumption of the abandonment liabilities. | |||||||||
Sales of properties | |||||||||
As of July 31, 2012, we owned a 6.25% overriding royalty interest in properties located in Franklin and Richland parishes in Louisiana (the "Holt" and "Strahan" properties). We also had a note receivable from the sale of our working interests in these properties, which had been fully reserved. In September 2012, we conveyed the overriding royalty interests to the operator and released the operator from any further liability from the note receivable in exchange for $50,000 cash. We allocated the cash proceeds between the note receivable and the overriding royalty interests based on the relative fair value of the balance on the note and the projected present value of the income streams from the royalty interests. The portion attributable to the overriding royalty interest, $32,146, was treated as a reduction of capitalized costs in accordance with rules governing full cost companies. | |||||||||
During December 2012, we sold our 3% working interest in the producing Janssen lease located in Karnes County, Texas. We received $2,500 as cash proceeds in conjunction with the sale. The buyer assumed the asset retirement obligation for the well, which was $438. In accordance with full cost rules, we recognized no gain or loss on the sale. | |||||||||
We received proceeds of $160,917 in conjunction with sales of interest in the Dix and Curlee prospects, as described above. | |||||||||
Unevaluated Properties | |||||||||
Namibia, Africa. | |||||||||
In September 2012, we acquired a 39% (43.33% cost responsibility) working interest in a concession in Namibia, Africa, as discussed in Note 2 - Acquisitions - Namibia Exploration, Inc. This property is a 5.3 million-acre concession in northern Namibia in Africa. | |||||||||
We have incurred total costs of $713,655, including NEI's cost basis at the time we acquired the property, which was $562,048. The concession specifies the following minimum cost responsibilities on an 8/8ths basis: | |||||||||
1) | Initial Exploration Period (expires September 2015): Perform a hydrocarbon potential study, gather and review existing technical data including reprocessing of seismic lines, and acquire and process 750 kilometers of new 2D seismic data. The minimum expenditure is $4,505,000. | ||||||||
2) | First renewal exploration period (two years from end of the initial exploration period): Acquire 200 square kilometers of 3D seismic data, interpret and map the data, design a drilling program, drill one well, conduct an environmental study, and relinquish 25% of the Exploration license area. The minimum expenditure is $17,350,000. | ||||||||
3) | Second Renewal (Production License) Exploration Period (25 years): report on reserves and production, conduct and environmental study. The minimum expenditure is $300,000. | ||||||||
As of July 31, 2013, approximately $900,000 has been expended towards the initial exploration period. |
Impairment
Impairment | 12 Months Ended |
Jul. 31, 2013 | |
Impairment [Abstract] | ' |
Impairment | ' |
Note 5 - Impairment | |
We account for our oil and natural gas producing activities using the full cost method of accounting as prescribed by the United States Securities and Exchange Commission ("SEC"). Under this method, subject to a limitation based on estimated value, all costs incurred in the acquisition, exploration, and development of proved oil and natural gas properties, including internal costs directly associated with acquisition, exploration, and development activities, the costs of abandoned properties, dry holes, geophysical costs, and annual lease rentals are capitalized within a cost center. | |
We evaluated our capitalized costs using the full cost ceiling test as prescribed by the Securities and Exchange Commission at the end of each reporting period. As of July 31, 2013 and July 31, 2012, the net book value of oil and gas properties did not exceed the ceiling amount and thus, there was no impairment. | |
Changes in production rates, levels of reserves, future development costs, and other factors will determine our actual ceiling test calculation and impairment analyses in future periods. |
Asset_Retirement_Obligation
Asset Retirement Obligation | 12 Months Ended | ||||||||
Jul. 31, 2013 | |||||||||
Asset Retirement Obligation [Abstract] | ' | ||||||||
Asset Retirement Obligation | ' | ||||||||
Note 6 - Asset Retirement Obligation | |||||||||
The following is a reconciliation of our asset retirement obligation liability as of July 31, 2013 and 2012: | |||||||||
2013 | 2012 | ||||||||
Liability for asset retirement obligation, beginning of period | $ | 9,382,933 | $ | 4,455,928 | |||||
Asset retirement obligations assumed | - | 2,365,530 | |||||||
Asset retirement obligations sold | (438 | ) | (32,772 | ) | |||||
Asset retirement obligations incurred on properties drilled | 26,500 | 1,389 | |||||||
Accretion | 1,056,508 | 943,508 | |||||||
Revisions in estimated cash flows | 786,120 | 1,827,889 | |||||||
Costs incurred | (318,225 | ) | (178,539 | ) | |||||
Liability for asset retirement obligation, end of period | $ | 10,933,398 | $ | 9,382,933 | |||||
Current portion of asset retirement obligation | $ | 724,374 | $ | 549,796 | |||||
Noncurrent portion of asset retirement obligation | 10,209,024 | 8,833,137 | |||||||
Total liability for asset retirement obligation | $ | 10,933,398 | $ | 9,382,933 | |||||
Notes_Payable
Notes Payable | 12 Months Ended | ||||
Jul. 31, 2013 | |||||
Notes Payable [Abstract] | ' | ||||
Notes Payable | ' | ||||
Note 7 - Notes Payable | |||||
Installment Notes Payable | |||||
In February 2012, we entered into a premium financing arrangement to pay principal of $209,244 in conjunction with our commercial insurance program renewal. We were obligated to make nine payments of $24,578 per month, which include principal and interest, beginning in March 2012. As of July 31, 2012, $96,252 remained unpaid on the note. As of July 31, 2013, the note payable balance was $0. | |||||
In May 2012, we entered into a note payable of $18,375 to purchase a vehicle. The note carries an interest rate of 6.93% and is payable beginning in June 2012, in 36 installments of $567 per month. The principal balance owed on the note payable was $17,451 and $11,678 as of July 31, 2012 and July 31, 2013, respectively. | |||||
In September 2012, we entered into a note payable of $1,600,000 with Hydrocarb Corporation, as described in Note 2 - Acquisitions - Namibia Exploration, Inc. The note carries interest of 5%; which is calculated semi-annually and payable with principal payments. Principal of $800,000 is due on August 7, 2013 and $800,000 is due on August 7, 2014. In October 2013, we paid off the note and accrued interest and fees associated with the note. | |||||
In March 2013, we financed our commercial insurance program using a note payable for $260,905. Under the note, we are obligated to make nine payments of $29,591 per month, which include principal and interest, beginning in March 2013. As of July 31, 2013, $115,958 remained outstanding on this note. | |||||
In June 2013, the outstanding balance on our line of credit, $300,000, was replaced by a term loan that matures on June 22, 2015. Under the term loan, we are obligated to make twenty four monthly payments of $12,500 principal reduction plus interest for the month. The note carries interest at prime + 1%, currently 6%. As of July 31, 2013, $275,000 remained outstanding on this note. As of November 12, 2013, the date of this report, $250,000 remained outstanding on the note. | |||||
As of July 31, 2013, future maturities on our notes payable were as follows: | |||||
Fiscal year ending: | |||||
2014 | $ | 1,059,644 | |||
2015 | 942,992 | ||||
Total | $ | 2,002,636 | |||
Line of Credit | |||||
On March 17, 2011, GBE secured a one year revolving line of credit of up to with a commercial bank. The note specified interest at a rate of prime + 1% with a minimum interest rate of 5%. The initial interest rate was 6%. Interest is payable monthly. We must use proceeds from the line of credit solely to enhance our Galveston Bay properties. The note is collateralized by our Galveston Bay properties and substantially all GBE's assets. Duma also executed a parental guarantee of payment. As of July 31, 2012 the amount outstanding under the line of credit was $300,000. The note was extended several times during fiscal 2013 and finally replaced by a term loan note in June 2013. |
Fair_Value
Fair Value | 12 Months Ended | ||||||||||||||||
Jul. 31, 2013 | |||||||||||||||||
Fair Value [Abstract] | ' | ||||||||||||||||
Fair Value | ' | ||||||||||||||||
Note 8 - Fair Value | |||||||||||||||||
We had no financial assets and liabilities that were accounted for at fair value on a recurring basis as of July 31, 2013. | |||||||||||||||||
The following table sets forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis as of July 31, 2012. | |||||||||||||||||
Carrying Value at | Fair Value Measurement at July 31, 2012 | ||||||||||||||||
31-Jul-12 | Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets: | |||||||||||||||||
Available for sale securities | $ | 313,446 | $ | 313,446 | $ | - | $ | - | |||||||||
Liabilities: | |||||||||||||||||
Derivative warrant liability | $ | 1,325,388 | $ | - | $ | - | $ | 1,325,388 | |||||||||
Derivative Warrant Liability | |||||||||||||||||
Effective July 31, 2009, we adopted FASB ASC Topic No. 815-40 (formerly EITF 07-05) which defines determining whether an instrument (or embedded feature) is indexed to an entity's own stock. This literature specifies that a contract that would otherwise meet the definition of a derivative but is both (a) indexed to our own stock and (b) classified in stockholders' equity in the statement of financial position, would not be considered a derivative financial instrument and provides a new two-step model to be applied in determining whether a financial instrument or an embedded feature is indexed to an issuer's own stock and thus able to qualify for the scope exception. | |||||||||||||||||
Certain warrants we issued during the year ended July 31, 2010 were not afforded equity treatment because these warrants had a down-round ratchet provision on the exercise price. As a result, the warrants were not considered indexed to our own stock, and as such, the fair value of the embedded derivative liability was reflected on the balance sheet and all future changes in the fair value of these warrants were recognized currently in earnings in our consolidated statement of operations under the caption "Gain (loss) on warrant derivative liability" until such time as the warrants are exercised or the down-ratchet provision expires. The total fair values of the warrants issued during the year ended July 31, 2010, were determined using a lattice model and have been recognized as a derivative liability as described below. | |||||||||||||||||
The warrants were valued using a multi-nomial lattice model with the following assumptions: | |||||||||||||||||
· | The stock price on the valuation date would fluctuate with our projected volatility; | ||||||||||||||||
· | Warrant holders would exercise at target price multiples of the market price trigger prices. The target price multiple reduces as the warrants approach maturity; | ||||||||||||||||
· | Warrant holders would exercise the warrant at maturity if the stock price was above two times the reset exercise price; | ||||||||||||||||
· | An annual reset event would occur at 65% discount to market price; | ||||||||||||||||
· | The projected volatility was based on historical volatility. Because we did not have sufficient trading history to determine our own historical volatility, we used the volatility of a group of comparable companies combined with our own historical volatility from May 2009, when we began trading. | ||||||||||||||||
The following table sets forth the changes in the fair value measurement of our Level 3 derivative warrant liability during the years ended July 31, 2013 and 2012: | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Beginning of the period | $ | 1,325,388 | $ | 2,543,223 | |||||||||||||
Expiration of derivative warrant feature | (269,164 | ) | - | ||||||||||||||
Unrealized gain on changes in fair value of derivative liability | (1,056,224 | ) | (1,217,835 | ) | |||||||||||||
End of the period | $ | - | $ | 1,325,388 | |||||||||||||
The unrealized gain on changes in fair value was recorded as a reduction of the derivative liability and as an unrealized gain on the change in fair value of the liability in our statement of operations. | |||||||||||||||||
The warrant agreement provides that the anti-dilution provisions expire three years after the issuance of the warrants. Accordingly, the provision for warrants to purchase 408,065 and 206,400 shares of common stock expired on October 15, 2012 and November 13, 2012, respectively. As of each those dates, the fair value of the warrant was determined for a final mark to market adjustment and the outstanding warrant derivative liability was reclassified to additional paid-in capital, as the warrants were no longer derivatives. |
Capital_Stock
Capital Stock | 12 Months Ended | ||||||||||||||||
Jul. 31, 2013 | |||||||||||||||||
Capital Stock [Abstract] | ' | ||||||||||||||||
Capital Stock | ' | ||||||||||||||||
Note 9 - Capital Stock | |||||||||||||||||
On April 4, 2012, we effected a reverse stock split of our authorized, issued and outstanding shares of common stock on a one new share for twenty-five old share basis (1:25). The effect of the reverse stock split has been retroactively applied to all periods presented. | |||||||||||||||||
As a result of the reverse split, our authorized share capital decreased from 500,000,000 shares of common stock to 20,000,000 shares of common stock and correspondingly, our issued and outstanding share capital decreased from 269,742,986 shares of common stock to 10,791,003 shares of common stock. | |||||||||||||||||
Effective May 16, 2012, Duma increased the number of its authorized shares of common stock from 20,000,000 shares, par value $0.001 per share, to 500,000,000 shares, par value $0.001 per share. | |||||||||||||||||
Our capitalization at July 31, 2013 was 500,000,000 authorized common shares with a par value of $0.001 per share. | |||||||||||||||||
Common Stock Issuances | |||||||||||||||||
During August 2011, we granted 189,585 shares of common stock to certain investors who had participated in our October and November 2009 equity raises, and as a consequence owned derivative warrants. These investors had exercised some of their warrants prior to our equity raise in February 2011, which triggered the down-round ratchet provision in the warrants. The warrant contracts specify that the ratchet adjustment is not made for warrants that were exercised prior to the repricing event. As a consequence of their warrant exercises, they had forfeited their contractual right to receive ratchet warrant shares. However, management granted stock to these investors as a goodwill gesture. The stock grant was treated as an investor relations expense and valued at $592,452. The shares were valued using the closing market price on the date of grant. | |||||||||||||||||
During December 2011 we granted 13,036 shares of common stock as compensation for services valued at $27,703. The shares were valued using the closing market price on the date of the grant. | |||||||||||||||||
During the quarter ended April 30, 2012, we canceled 2,431 shares that had previously been deemed issued to two consultants. No adjustment to compensation was made in conjunction with this settlement. | |||||||||||||||||
During September 2011, we issued 3,799,998 shares of common stock to the members of SPE Navigation I, LLC towards acquisition of SPE. The purchase price was calculated as $9,500,000, based on the quoted market price of our stock on the date of the acquisition. | |||||||||||||||||
During September 2012, we issued 2,490,000 shares of common stock to the owners of Namibia Exploration, Inc. ("NEI") for the acquisition of NEI. The shares were valued at $3,784,800, based on the quoted market price of our stock on the date of the acquisition. Additionally, $31,612,000 was recognized in conjunction with our commitment to issue additional stock if certain market conditions are achieved. (See Note 2 - Acquisitions - Namibia Exploration, Inc.) | |||||||||||||||||
Stock Compensation Plans | |||||||||||||||||
A new 2013 Stock Incentive Plan (2013 Plan) was approved by the Board during February 2013. The 2013 Plan replaced our prior stock incentive plans. Duma may grant up to 2,650,000 shares of common stock under the 2013 Plan. The Plan is administered by the Board of Directors, which has substantial discretion to determine persons, amounts, time, price, exercise terms, and restrictions of the grants, if any. | |||||||||||||||||
The fair value of each option or warrant award is estimated using the Black-Scholes valuation model. Expected volatility is based solely on historical volatility because we do not have traded options. Prior to May 2009, the volatility was determined by referring to the average historical volatility of a peer group of public companies because we did not have sufficient trading history to determine our own historical volatility. Beginning with computations after May 2009, when there was an active trading market for our stock, we have included our own historical volatility in determining the volatility used. As of October 2013, we determined that 4.5 years of trading history was sufficient to determine historical volatility; accordingly valuations from October 2013 onwards will be performed without using a peer group. | |||||||||||||||||
The expected term calculation for stock options is based on the simplified method as described in the Securities and Exchange Commission Staff Accounting Bulletin number 107. We use this method because we do not have sufficient historical information on exercise patterns to develop a model for expected term. The risk-free interest rate is based on the U. S. Treasury yield in effect at the time of grant for an instrument with a maturity that is commensurate with the expected term of the stock options. The dividend yield rate of zero is based on the fact that we have never paid cash dividends on our common stock and we do not intend to pay cash dividends on our common stock. | |||||||||||||||||
Options granted to non-employees | |||||||||||||||||
The following table details the significant assumptions used to compute the fair market values of stock options granted or revalued during the years ended July 31: | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Risk-free interest rate | 1.11% - 2.00% | 0.12% - 1.66% | |||||||||||||||
Dividend yield | 0% | 0% | |||||||||||||||
Volatility factor | 140.30%-144% | 135%-148% | |||||||||||||||
Expected life (years) | 6.5 years | 1-6.5 years | |||||||||||||||
In February 2013, options to purchase an aggregate of 600,000 shares of common stock with an exercise price of $2.20 per share and a term of ten years were granted to our three independent directors. The options vest 20% each six months over the 30 months following the award. The fair value of the total option award on the date of grant was $1,196,589. The fair market value of this award was estimated using the Black-Sholes option pricing model. | |||||||||||||||||
No options were granted to non-employees during the year ended July 31, 2012. Expense during 2012 consists of the amortization of options granted prior to July 31, 2012. | |||||||||||||||||
The following table provides information about options granted to non-employees under our stock incentive plans during the years ended July 31, 2013 and 2012: | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Number of options granted | 600,000 | - | |||||||||||||||
Compensation expense recognized | $ | 679,174 | $ | 424,569 | |||||||||||||
Weighted average exercise price of options granted | $ | 2.2 | $ | N/ | A | ||||||||||||
Based on the fair value of the options as of July 31, 2013, there was $1,011,847 of unrecognized compensation costs related to non-vested share based compensation arrangements granted to non-employees. | |||||||||||||||||
We account for options granted to non-employees under the provisions of ASC 505-50 and record the associated expense at fair value on the final measurement date. Because there is no disincentive for nonperformance for these awards, the final measurement date occurs when the services are complete, which is the vesting date. For the options granted to non-employees on a graded vesting schedule, we estimate the fair value of the award as of the end of each reporting period and recognize an appropriate portion of the cost based on the fair value on that date. When the award vests, we adjust the cost previously recognized so that the cost ultimately recognized is equivalent to the fair value on the vesting date, which is presumed to be the date the performance is complete. | |||||||||||||||||
Options granted to employees | |||||||||||||||||
The following table provides information about options granted to employees under our stock incentive plans during the years ended July 31, 2013 and 2012: | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Number of options granted | - | - | |||||||||||||||
Compensation expense recognized | $ | 253,952 | $ | 263,201 | |||||||||||||
Weighted average exercise price of options granted | $ | N/A | $ | N/A | |||||||||||||
During the year ended July 31, 2011, options to purchase 260,000 shares of common stock with an exercise price of $2.50 per share and a term of ten years were granted to five employees. The options vest 20% each six months over the 30 months following the award. Because the grantees were employees, the awards are accounted for under the provisions of ASC 718. Accordingly, they are measured at fair value on the date of grant and the expense associated with the grant will be amortized over the 30 month vesting period on a straight line basis. As of July 31, 2013, we had $56,917 in unamortized compensation expense associated with options granted to employees. | |||||||||||||||||
No options were granted to employees during the years ended July 31, 2013 or 2012. | |||||||||||||||||
Summary information regarding stock options issued and outstanding as of July 31, 2013 is as follows: | |||||||||||||||||
Options | Weighted Average | Aggregate intrinsic | Weighted average remaining contractual | ||||||||||||||
Share Price | value | life (years) | |||||||||||||||
Outstanding at July 31, 2011 | 1,101,200 | $ | 2.5 | $ | 1,101,200 | 8.14 | |||||||||||
Granted | - | - | |||||||||||||||
Exercised | - | - | |||||||||||||||
Expired or forfeited | (57,200 | ) | 2.5 | ||||||||||||||
Outstanding at July 31, 2012 | 1,044,000 | $ | 2.5 | $ | - | 7.22 | |||||||||||
Granted | 600,000 | 2.2 | |||||||||||||||
Exercised | - | - | |||||||||||||||
Expired or forfeited | (108,000 | ) | 2.5 | ||||||||||||||
Outstanding at July 31,2013 | 1,536,000 | $ | 2.38 | $ | - | 7.98 | |||||||||||
Exercisable at July 31, 2013 | 776,800 | $ | 2.5 | $ | - | 6.82 | |||||||||||
Options outstanding and exercisable as of July 31, 2013: | |||||||||||||||||
Exercise Price | Outstanding Number of | Remaining Life | Exercisable Number of | ||||||||||||||
Shares | Shares | ||||||||||||||||
$ | 2.2 | 600,000 | 9.54 years | - | |||||||||||||
2.5 | 796,000 | 7.73 years | 636,800 | ||||||||||||||
2.5 | 60,000 | 3.93 years | 60,000 | ||||||||||||||
2.5 | 24,000 | 5.81 years | 24,000 | ||||||||||||||
2.5 | 56,000 | Less than 1 year | 56,000 | ||||||||||||||
1,536,000 | 776,800 | ||||||||||||||||
Options outstanding and exercisable as of July 31, 2012: | |||||||||||||||||
Exercise Price | Outstanding Number of | Remaining Life | Exercisable Number of | ||||||||||||||
Shares | Shares | ||||||||||||||||
$ | 2.5 | 800,000 | 8.72 years | 320,000 | |||||||||||||
2.5 | 24,000 | 6.81 years | 24,000 | ||||||||||||||
2.5 | 60,000 | 4.93 years | 60,000 | ||||||||||||||
2.5 | 56,000 | 1.04 years | 56,000 | ||||||||||||||
2.5 | 104,000 | Less than 1 year | 104,000 | ||||||||||||||
1,044,000 | 564,000 | ||||||||||||||||
Summary information regarding nonvested stock options as of July 31, 2013 is as follows: | |||||||||||||||||
Number of shares | Weighted average grant date fair value | ||||||||||||||||
Nonvested at July 31, 2012 | 480,000 | $ | 2.47 | ||||||||||||||
Granted | 600,000 | $ | 1.99 | ||||||||||||||
Vested | (319,200 | ) | $ | 2.47 | |||||||||||||
Forfeited | (1,600 | ) | $ | 2.47 | |||||||||||||
Nonvested at July 31, 2013 | 759,200 | $ | 2.09 | ||||||||||||||
Warrants | |||||||||||||||||
Warrants granted to related party | |||||||||||||||||
During the year ended July 31, 2011, we entered into a consulting agreement with Geoserve Marketing, LLC ("Geoserve"), a company controlled by Michael Watts, who is the father-in-law of Jeremy Driver, a Director and our Chief Executive Officer. Under the terms of the agreement, we granted warrants to purchase 1,200,000 shares of common stock that have a market condition. If our common stock attains a five day average closing price of $7.50 per share, 600,000 warrants with an exercise price of $2.50 and an expiration date of February 15, 2016 shall be exercisable ("Warrant B"). If our common stock attains a five day average closing price of $15.00 per share, 600,000 warrants with an exercise price of $2.50 and an expiration date of February 15, 2016 shall be exercisable ("Warrant C"). The fair value of warrants that vest upon the attainment of a market condition must be estimated and amortized over the lower of the implicit or derived service period of the warrants. Previously recognized expense is not reversed in the event of a subsequent decline in the fair value of market condition equity based compensation. The fair value of the warrants and the derived service period were valued using a lattice model that values the liability of the warrants based on a probability weighted discounted cash flow model. This model is based on future projections of the various potential outcomes. Warrant B and Warrant C will be amortized over the derived service periods of 2.08 years and 2.49 years, respectively. The following table reflects information regarding Warrant B and Warrant C as of July 31, 2013 and 2012: | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Fair Value of Warrant B as of the end of the derived service period in 2013 and as of July 31, 2012 | $ | 266,017 | $ | 177,150 | |||||||||||||
Fair Value of Warrant C as of July 31, 2013 and 2012, respectively | $ | 202,127 | $ | 139,491 | |||||||||||||
Compensation expense recognized during the years ended July 31, 2013 and 2012, respectively | $ | 196,384 | $ | 189,372 | |||||||||||||
Summary information regarding common stock warrants issued and outstanding as of July 31, 2013, is as follows: | |||||||||||||||||
Warrants | Weighted Average Share Price | Aggregate intrinsic value | Weighted average remaining contractual life (years) | ||||||||||||||
Outstanding at year ended July 31, 2011 | 3,758,455 | $ | 2.5 | $ | 3,710,880 | 3.83 | |||||||||||
Granted | - | - | - | - | |||||||||||||
Exercised | - | - | - | - | |||||||||||||
Expired | (2,000 | ) | 25 | - | - | ||||||||||||
Outstanding at year ended July 31, 2012 | 3,756,455 | $ | 2.58 | $ | - | 2.83 | |||||||||||
Granted | - | - | - | - | |||||||||||||
Exercised | - | - | - | - | |||||||||||||
Expired | (45,578 | ) | 9.34 | - | - | ||||||||||||
Outstanding at year ended July 31,2013 | 3,710,877 | $ | 2.5 | $ | - | 1.87 | |||||||||||
Warrants outstanding and exercisable as of July 31, 2013: | |||||||||||||||||
Exercise Price | Outstanding Number of Shares | Remaining Life | Exercisable Number of Shares | ||||||||||||||
$ | 2.5 | 2,000,000 | 3 years or less | 800,000 | |||||||||||||
2.5 | 1,253,757 | 2 years or less | 1,253,757 | ||||||||||||||
2.5 | 457,120 | 1 year or less | 457,120 | ||||||||||||||
3,710,877 | 2,510,877 | ||||||||||||||||
Warrants outstanding and exercisable as of July 31, 2012: | |||||||||||||||||
Exercise Price | Outstanding Number of Shares | Remaining Life | Exercisable Number of Shares | ||||||||||||||
$ | 2.5 | 2,000,000 | 3.55 years | 800,000 | |||||||||||||
2.5 | 1,253,757 | 2.21 years | 1,253,757 | ||||||||||||||
2.5 | 400,000 | 1.67 years | 400,000 | ||||||||||||||
2.5 | 5,120 | 1.57 years | 5,120 | ||||||||||||||
2.5 | 52,000 | 1.55 years | 52,000 | ||||||||||||||
6.25 | 8,000 | 1 year or less | 8,000 | ||||||||||||||
10 | 37,578 | 1 year or less | 37,578 | ||||||||||||||
3,756,455 | 2,556,455 |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended | ||||||||
Jul. 31, 2013 | |||||||||
Related Party Transactions [Abstract] | ' | ||||||||
Related Party Transactions | ' | ||||||||
Note 10 - Related Party Transactions | |||||||||
During the years ended July 31, 2013 and 2012, a company controlled by one of our former officers, Carter E & P ("Carter") operated several properties onshore in South Texas, including our Barge Canal properties. Although he was not a related party after September 2013, we considered the transactions with his company during his tenure as an officer of Duma as related party transactions because they were not compensation or ordinary course of business, and because he was a related party at the time they occurred. Revenues generated, lease operating costs, and contractual overhead charges, which are included in lease operating costs incurred from these properties, were as follows: | |||||||||
Year Ended July 31, | |||||||||
2013 | 2012 | ||||||||
Revenue generated from Barge Canal properties | $ | 643,203 | $ | 569,476 | |||||
Lease operating costs incurred from Barge Canal properties | $ | 224,047 | $ | 181,113 | |||||
Overhead costs incurred | $ | 28,038 | $ | 25,087 | |||||
Outstanding accounts receivable at period end | $ | 91,967 | $ | 74,972 | |||||
Outstanding accounts payable at year end | $ | - | $ | - | |||||
In February 2013, we sold a 2% working interest in a 366.85 acre tract of unevaluated property, the Dix prospect, in San Patricio County, Texas to Carter. Carter paid cash of $1,541, the proportional share of the land acquisition costs. | |||||||||
In August 2013, we closed our Corpus Christi office and terminated this officer. In conjunction with the office closure and termination, we assumed operatorship of the Barge Canal properties effective September 1, 2013. In addition, we conveyed multiple properties located in the South Texas and Illinois area to this officer for $0 cash consideration and assumption of the associated asset retirement obligations. (See Note 4 - Oil and Gas Properties) | |||||||||
The father of the Chief Financial Officer and a company controlled by the father-in-law of the Chief Executive Officer each purchased a 5% working interest in the ST 9-12A #4 well. As of July 31, 2012, these parties owed $42,646 in billed and unbilled joint interest billings. As of July 31, 2013, the company controlled by the father-in-law of the Chief Executive Officer owed us $84,806. We also had an advance outstanding from the father of the Chief Financial Officer, which was reflected in the caption "Due to related parties", of $15,046. | |||||||||
In November 2011, we paid $6,423 principal on a note payable due to a director. We also paid the associated accrued interest of $416. | |||||||||
In October 2011, we paid $8,300 of principal on a note payable due to an officer and director of Duma. We also paid the accrued interest associated with the note of $413. | |||||||||
During 2011, we entered into a consulting contract with a company controlled by Michael Watts, the father-in-law of Jeremy Driver, our Chief Executive Officer and a Director, as detailed in Note 9 - Capital Stock. We recognized expense of $196,384 and 189,372 from this contract during the years ended July 31, 2013 and 2012, respectively. | |||||||||
During the quarter ended October 2012, we purchased NEI for up to 24,900,000 shares of Duma common stock, as described in Note 2 - Acquisitions - Namibia Exploration, Inc. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||
Jul. 31, 2013 | |||||||||
Income Taxes [Abstract] | ' | ||||||||
Income Taxes | ' | ||||||||
Note 11 - Income Taxes | |||||||||
Our net loss before income taxes totaled $(40,598,044) and $(5,700,195) for the years ended July 31, 2013 and 2012, respectively. | |||||||||
We recognized an income tax benefit during the year ended July 31, 2013 because the estimated tax liability for 2012 exceeded the actual tax liability. | |||||||||
We recognized a large income tax benefit during the year ended July 31, 2012 primarily due to intangible drilling costs and dry hole costs that resulted in tax losses and the utilization of net operating losses that offset the recognized tax gain on securities sold during the year. The securities were acquired with SPE (See Note 2 - Acquisitions) and had built-in capital gains on the purchase date, which resulted in the recognition of a deferred tax liability on the date of purchase. In accordance with purchase accounting, the utilization of the tax losses, which were possible because the gains existed, was recognized as a tax benefit and the purchase price accounting remained unchanged. A portion of the stock acquired in the purchase of SPE was not sold during the year. We determined that current deferred tax assets existed that are sufficient to offset deferred tax liability on unrecognized tax gain on these available for sale securities and accordingly we adjusted the valuation allowance for our deferred tax assets, which resulted in a further tax benefit. | |||||||||
The reconciliation of our income tax provision at the statutory rate to the reported income tax expense is as follows: | |||||||||
July 31, | |||||||||
2013 | 2012 | ||||||||
US statutory federal rate | 35 | % | 35 | % | |||||
State income tax rate | 0.58 | % | 0.58 | % | |||||
Equity-based compensation | (33.62 | )% | (36.43 | )% | |||||
Gain on derivative warrants | 0.93 | % | 7.6 | % | |||||
Gain on sale of securities | (.33 | )% | (21.15 | )% | |||||
Other | (.50 | )% | 4.02 | % | |||||
Acquired deferred tax liability | - | % | 23.12 | % | |||||
Net operating loss | (1.75 | )% | 6.92 | % | |||||
0.31 | % | 19.66 | % | ||||||
Our deferred income taxes reflect the net tax effects of operating loss and tax credit carry forwards and temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. | |||||||||
Components of deferred tax assets as of July 31, 2013 and 2012 are as follows: | |||||||||
July 31, | |||||||||
2013 | 2012 | ||||||||
Stock based compensation | $ | 713,867 | $ | 292,509 | |||||
Property, including depreciable property | (2,980,005 | ) | (2,070,809 | ) | |||||
Asset retirement obligation | 3,942,918 | 3,312,358 | |||||||
Net operating loss carry-forward | 3,846,783 | 2,530,532 | |||||||
Other | 42,368 | 318,032 | |||||||
5,565,931 | 4,382,622 | ||||||||
Valuation allowance for deferred tax assets | (5,565,931 | ) | (4,382,622 | ) | |||||
$ | - | $ | - | ||||||
The valuation allowance is evaluated at the end of each year, considering positive and negative evidence about whether the deferred tax asset will be realized. At that time, the allowance will either be increased or reduced; reduction could result in the complete elimination of the allowance if positive evidence indicates that the value of the deferred tax assets is no longer impaired and the allowance is no longer required. | |||||||||
We have no positions for which it is reasonable that the total amounts of unrecognized tax benefits at July 31, 2013 will significantly increase or decrease within 12 months. | |||||||||
Generally, our income tax years 2010 through 2013 remain open and subject to examination by Federal tax authorities or the tax authorities in Louisiana and Texas which are the jurisdictions where we have our principal operations. No material amounts of the unrecognized income tax benefits have been identified to date that would impact our effective income tax rate. | |||||||||
As of July 31, 2013, we had approximately $10,813,165 of U.S. federal and state net operating loss carry-forward ("NOLs") available to offset future taxable income, which begins expiring in 2027, if not utilized. Future tax benefits that may arise as a result of these losses have not been recognized in these financial statements. The deferred tax asset generated by the loss carry-forward has been fully reserved due to the uncertainty we will be able to realize the benefit from it. | |||||||||
Our ability to use our NOLs would be limited if it was determined that we underwent an "ownership change" under Section 382 ("Section 382") of the Internal Revenue Code. Based upon the information available to us, along with our evaluation of various scenarios, we believe that our 2011 private placement caused us to experience an "ownership change". | |||||||||
In order to determine whether an "ownership change" occurred, we had to compare the percentage of shares owned by each 5.0% shareholder immediately after the close of the testing date to the lowest percentage of shares owned by such 5.0% shareholder at any time during the testing period (which is generally a three year rolling period). The amount of the increase in the percentage of Company shares owned by each 5.0% shareholder whose share ownership percentage has increased is added together with increases in share ownership of other 5.0% shareholders, and an "ownership change" occurs if the aggregate increase in ownership by all such 5.0% shareholders exceeds 50%. The issuance of our common shares as part of the 2011 private placement caused such threshold to be exceeded. | |||||||||
As a result of experiencing an "ownership change", we will only be allowed to use a limited amount of NOLs to offset our taxable income subsequent to the "ownership change." The annual limit pursuant to Section 382 (the "382 Limitation") is obtained by multiplying (i) the aggregate value of our outstanding equity immediately prior to the "ownership change" (reduced by certain capital contributions made during the immediately preceding two years and certain other items) by (ii) the federal long-term tax-exempt interest rate in effect for the month of the "ownership change." As our ownership change occurred in February 2011, the federal long-term tax-exempt interest rate applicable to our limitation is 4.47%. Therefore, based on the factors in place at the time of our ownership change, we believe our annual limitation would be an estimated $239,600. On September 6, 2012, we acquired Namibia Exploration, Inc. We believe the transaction may have resulted in a second "ownership change", which would further limit the availability of NOLs incurred prior to the transaction. | |||||||||
If we were to have taxable income in excess of the 382 Limitation following a Section 382 "ownership change," we would not be able to offset tax on the excess income with the NOLs. Although any loss carryforwards not used as a result of any Section 382 Limitation would remain available to offset income in future years (again, subject to the Section 382 Limitation) until the NOLs expire, the "ownership change" will significantly defer the utilization of the loss carryforwards, accelerate payment of federal income tax and may cause some of the NOLs to expire unused. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||||||||||||||
Jul. 31, 2013 | |||||||||||||||||
Commitments and Contingencies [Abstract] | ' | ||||||||||||||||
Commitments and Contingencies | ' | ||||||||||||||||
Note 12 - Commitments and Contingencies | |||||||||||||||||
Contingencies | |||||||||||||||||
Legal | |||||||||||||||||
We are subject to legal proceedings, claims and liabilities which arise in the ordinary course of business. We accrue for losses associated with legal claims when such losses are probable and can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. Legal fees are charged to expense as they are incurred. | |||||||||||||||||
A state regulator has requested that we renew certain pipeline easements located in Galveston Bay. The easements in question were originally obtained by another company whose successor filed for bankruptcy protection. Our subsidiary, Galveston Bay Energy, LLC purchased certain assets from the bankruptcy estate; however, based on the bankruptcy court's order and the purchase and sale agreement, we believe the pipelines and easements in question were not included in assets purchased. The easements in question were scheduled to renew at various dates between 2012 and 2021. Based on current posted rates, the cost of renewal of all of the easements would be approximately $400,000. We have engaged legal counsel to dispute the regulator's claim. If we are obligated to renew these easements, they would be part of the asset retirement obligation that was acquired with our subsidiary, Galveston Bay Energy, LLC. As such, the potential liability for these easements is factored into the computation of the asset retirement obligation (See Note 6) that is estimated using the guidance in ASC 410-20. | |||||||||||||||||
Environmental | |||||||||||||||||
We accrue for losses associated with environmental remediation obligations when such losses are probable and can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. Costs of future expenditures for environmental remediation obligations are not discounted to their present value. Recoveries of environmental remediation costs from other parties are recorded at their undiscounted value as assets when their receipt is deemed probable. | |||||||||||||||||
There is soil contamination at a tank facility owned by GBE. Depending on the technique used to perform the remediation, we estimate the cost range to be between $150,000 and $900,000. We cannot determine a most likely scenario, thus we have recognized the lower end of the range. We have submitted a remediation plan to the appropriate authorities and have not yet received a response. For the year ended July 31, 2013 and July 31, 2012, $150,000 has been recognized and is included in the balance sheet caption "Accounts payable and accrued expenses." | |||||||||||||||||
Commitments | |||||||||||||||||
We have the following contract obligations: | |||||||||||||||||
In March 2011, we executed a lease for office space in Houston, Texas. The lease term is three years and we have an option to extend the lease for an additional three years. Our scheduled rent is $6,406 per month plus common area maintenance cost for the first year, $6,673 plus common area maintenance cost for the second year, and $6,940 per month plus common area maintenance cost for the third year. | |||||||||||||||||
During September 2013, we terminated our lease for office space in Corpus Christi, Texas. | |||||||||||||||||
Rent expense during the years ended July 31, 2013 and 2012 was $127,867 and $117,392, respectively. | |||||||||||||||||
The following table details our payment obligations related to our operating leases and to our debt that are due during the years ended July 31, | |||||||||||||||||
2014 | 2015 | 2016 | Total | ||||||||||||||
Operating leases | $ | 71,047 | $ | - | $ | - | $ | 71,047 | |||||||||
Notes payable | 1,135,042 | 967,295 | - | 2,102,337 | |||||||||||||
Total | $ | 1,206,089 | $ | 967,295 | $ | - | $ | 2,173,384 | |||||||||
In April 2012, we executed a Compression and Handling Agreement (the "PHA") with another operator. Under the terms of the PHA, oil, natural gas, and salt water from one of our fields would be disposed of through the operator's facility. Under the agreement, we are responsible for approximately a flat fee of $1,000 per month as a gauging fee, our pro-rata share of repairs at the facility, and compression, salt water disposal, and other charges based on the volumes disposed of through the facility. | |||||||||||||||||
Letters of Credit | |||||||||||||||||
Oil and gas operators in the State of Texas are required to obtain a letter of credit in favor of the Railroad Commission of Texas as security that they will meet their obligations to plug and abandon the wells they operate. We have two letters of credit in the amount of $6,610,000 and $180,000 issued by Green Bank. These letters of credit are collateralized by a certificate of deposit held with the bank for the same amount. In addition, we have a letter of credit in the amount of $40,000 issued by a commercial bank in favor of the landowner of the Welder lease as security that we will meet our obligations with regard to the salt water disposal well located on the lease. The letter of credit is collateralized by a certificate of deposit held with the bank for the same amount. We pay a 1.5% per annum fee in conjunction with these letters of credit. | |||||||||||||||||
During the year ended July 31, 2012, we paid the fees associated with the Greenbank letters quarterly. In June 2013, when we renewed the letters of credit, we prepaid the entire years' interest upfront. We amortized these fees on a straight-line basis. The following table reflects the prepaid balances as of July 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Prepaid letter of credit fees | $ | 101,850 | $ | 25,163 | |||||||||||||
Amortization | (8,488 | ) | (8,596 | ) | |||||||||||||
Net prepaid letter of credit fees | $ | 93,362 | $ | 16,567 |
Additional_Financial_Statement
Additional Financial Statement Information | 12 Months Ended | |||||||||
Jul. 31, 2013 | ||||||||||
Additional Financial Statement Information [Abstract] | ' | |||||||||
Additional Financial Statement Information | ' | |||||||||
Note 13 - Additional Financial Statement Information | ||||||||||
Other receivables | ||||||||||
Other receivables consist of joint interest billings due to us from participants holding a working interest in oil and gas properties that we operate. We regularly review collectability and establish or adjust an allowance for uncollectible amounts as necessary using the specific identification method. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of July 31, 2013 and 2012, we have reserved $58,585 and $1,302, respectively, for potentially uncollectable other receivables. | ||||||||||
Other current assets | ||||||||||
Other current assets consisted of the following: | ||||||||||
At July 31, | ||||||||||
2013 | 2012 | |||||||||
Prepaid letter of credit fees | $ | 93,362 | 16,567 | |||||||
Prepaid insurance | 180,433 | 178,471 | ||||||||
Other prepaid expenses | 2,000 | 10,164 | ||||||||
Cash call paid to operator | 24,225 | 23,234 | ||||||||
Prepaid land use fees | 28,728 | 19,852 | ||||||||
Accrued interest income | 4,388 | 8,389 | ||||||||
Total other current assets | $ | 333,136 | $ | 256,677 | ||||||
Property and Equipment | ||||||||||
Property and equipment consisted of the following: | ||||||||||
At July 31, | ||||||||||
Approximate Life | 2013 | 2012 | ||||||||
Furniture and fixtures | 5 years | $ | 7,604 | $ | 7,604 | |||||
Marine vessels | 5 years | 17,614 | 17,614 | |||||||
Vehicles | 5 years | 18,027 | 18,027 | |||||||
Computer equipment and software | 2 years | 39,296 | 39,296 | |||||||
Total property and equipment | 82,541 | 82,541 | ||||||||
Less accumulated depreciation | (62,749 | ) | (36,572 | ) | ||||||
Net book value | $ | 19,792 | $ | 45,969 | ||||||
Depreciation expense | $ | 26,177 | $ | 31,495 | ||||||
Accounts payable and accrued expenses | ||||||||||
Accounts payable and accrued expenses consisted of the following: | ||||||||||
At July 31, | ||||||||||
2013 | 2012 | |||||||||
Trade payables | $ | 3,068,671 | $ | 1,950,768 | ||||||
Accrued payroll | 151,577 | 40,000 | ||||||||
Accrued interest and fees | 398,966 | - | ||||||||
Revenue payable | 4,717 | 6,690 | ||||||||
Local taxes and royalty payable | 128,470 | 108,948 | ||||||||
Federal and state income taxes payable | 27,000 | 192,432 | ||||||||
Total accounts payable and accrued expenses | $ | 3,779,401 | $ | 2,298,838 | ||||||
Subsequent_Events
Subsequent Events | 12 Months Ended |
Jul. 31, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Note 14 - Subsequent Events | |
In August 2013, 120,000 of the 600,000 options granted to our independent directors became vested and the fair market value of these options on the date of vesting was $16,184. The fair market value was estimated using the Black-Sholes option pricing model with an expected life of 6.5 years, a risk free interest rate of 2.01%, a dividend yield of 0%, and a volatility factor of 144.01%. | |
In October 2013, the board accelerated the vesting of the remaining 480,000 options so that they became fully and immediately vested. The fair value of the options on the date of vesting of $851,096 was recognized immediately as an expense. The fair market value was estimated using the Black-Sholes option pricing model with an expected life of 6.5 years, a risk free interest rate of 2.09%, a dividend yield of 0%, and a volatility factor of 117.31%. | |
In October 2013, we issued 1,859,879 shares of common stock to Hydrocarb Corporation to settle the $2,400,000 consulting fee described in Note 2 - Acquisitions - Namibia Exploration, Inc., $553,640 of interest and late fees associated with the fee, and $635,937 of joint interest billings payable to Hydrocarb for its work on the Namibian concession. |
Supplemental_Oil_and_Gas_Infor
Supplemental Oil and Gas Information (Unaudited) | 12 Months Ended | ||||||||||||
Jul. 31, 2013 | |||||||||||||
Supplemental Oil And Gas Infomation Unaudited [Abstract] | ' | ||||||||||||
Supplemental Oil and Gas Information (Unaudited) | ' | ||||||||||||
Note 15 - Supplemental Oil and Gas Information (Unaudited) | |||||||||||||
The following supplemental information regarding our oil and gas activities is presented pursuant to the disclosure requirements promulgated by the SEC and ASC 932, Extractive Activities -Oil and Gas, (ASC 932). | |||||||||||||
Users of this information should be aware that the process of estimating quantities of "proved" and "proved developed" oil and natural gas reserves is very complex, requiring significant subjective decisions in the evaluation of all available geological, engineering and economic data for each reservoir. The data for a given reservoir may also change substantially over time as a result of numerous factors including, but not limited to, additional development activity, evolving production history and continual reassessment of the viability of production under varying economic conditions. As a result, revisions to existing reserve estimates may occur from time to time. Although every reasonable effort is made to ensure reserve estimates reported represent the most accurate assessments possible, the subjective decisions and variances in available data for various reservoirs make these estimates generally less precise than other estimates included in the financial statement disclosures. | |||||||||||||
Proved reserves represent estimated quantities of natural gas, crude oil and condensate that geological and engineering data demonstrate, with reasonable certainty, to be recoverable in future years from known reservoirs under economic and operating conditions in effect when the estimates were made. Proved developed reserves are proved reserves expected to be recovered through wells and equipment in place and under operating methods used when the estimates were made. In the following table, natural gas liquids are included in natural gas reserves. The oil and natural gas liquids price as of July 31, 2013 and 2012 is based on the 12-month un-weighted average of the first of the month prices of the NYMEX (Cushing, OK WTI) posted price which equates to $92.52 and $95.07 per barrel, respectively. The gas price as of July 31, 2013 and 2012 is based on the 12-month un-weighted average of the first of the month prices of the NYMEX (Cushing, OK WTI) spot price which equates to $3.51and $3.02 per MMbtu, respectively. The base prices were adjusted for heating content, premiums and product differentials based on historical revenue statements. All prices are held constant in accordance with SEC guidelines. All proved reserves are located in the United States; specifically, primarily in on-shore and off-shore Texas. | |||||||||||||
The following table illustrates our estimated net proved reserves, including changes, and proved developed reserves for the periods indicated, as estimated by third party reservoir engineers. Our proved reserves are located in the United States of America, our home country. | |||||||||||||
Proved Reserves | |||||||||||||
Oil | Gas | Total | |||||||||||
(Barrels) | (MCF) | ( MCFE) | |||||||||||
Balance - July 31, 2011 | 1,218,950 | 12,561,090 | 19,874,790 | ||||||||||
Revisions of previous estimates | (88,689 | ) | (1,404,465 | ) | (1,936,599 | ) | |||||||
New discoveries and extensions | 660 | 11,840 | 15,800 | ||||||||||
Purchase of reserves in place | 383,070 | 4,108,360 | 6,406,780 | ||||||||||
Sale of reserves in place | (64,730 | ) | (315,910 | ) | (704,290 | ) | |||||||
Production | (61,011 | ) | (222,955 | ) | (589,021 | ) | |||||||
Balance - July 31, 2012 | 1,388,250 | 14,737,960 | 23,067,460 | ||||||||||
Revisions of previous estimates | (667,307 | ) | (1,830,745 | ) | (5,834,587 | ) | |||||||
Sale of reserves in place | (1 | ) | (2 | ) | (8 | ) | |||||||
Production | (61,242 | ) | (176,823 | ) | (544,275 | ) | |||||||
Balance - July 31, 2013 | 659,700 | 12,730,390 | 16,688,590 | ||||||||||
Proved Reserves as of July 31, 2013 | |||||||||||||
Oil | Gas | Total | |||||||||||
(Barrels) | (MCF) | ( MCFE) | |||||||||||
Proved developed producing | 256,290 | 1,554,420 | 3,092,160 | ||||||||||
Proved developed non-producing | 229,290 | 5,000,960 | 6,376,700 | ||||||||||
Proved undeveloped | 174,120 | 6,175,010 | 7,219,730 | ||||||||||
Total proved reserves | 659,700 | 12,730,390 | 16,688,590 | ||||||||||
Proved Reserves as of July 31, 2012 | |||||||||||||
Oil | Gas | Total | |||||||||||
(Barrels) | (MCF) | ( MCFE) | |||||||||||
Proved developed producing | 308,640 | 1,785,010 | 3,636,850 | ||||||||||
Proved developed non-producing | 321,510 | 4,226,080 | 6,155,140 | ||||||||||
Proved undeveloped | 758,100 | 8,726,870 | 13,275,470 | ||||||||||
Total proved reserves | 1,388,250 | 14,737,960 | 23,067,460 | ||||||||||
The reserves in the report have been estimated using deterministic methods. For wells classified as proved developed producing where sufficient production history existed, reserves were based on individual well performance evaluation and production decline curve extrapolation techniques. For undeveloped locations and wells that lacked sufficient production history, reserves were based on analogy to producing wells within the same area exhibiting similar geologic and reservoir characteristics, combined with volumetric methods. The volumetric estimates were based on geologic maps and rock and fluid properties derived from well logs, core data, pressure measurements, and fluid samples. Well spacing was determined from drainage patterns derived from a combination of performance-based recoveries and volumetric estimates for each area or field. Proved undeveloped locations were limited to areas of uniformly high quality reservoir properties, between existing commercial producers. | |||||||||||||
Capitalized Costs Related to Oil and Gas Activities | |||||||||||||
The following table illustrates the total amount of capitalized costs relating to oil and natural gas producing activities and the total amount of related accumulated depreciation, depletion and amortization. | |||||||||||||
2013 | 2012 | ||||||||||||
Unevaluated properties | $ | 713,655 | $ | 265,639 | |||||||||
Evaluated properties | 19,857,842 | 17,553,836 | |||||||||||
Less impairment | (373,335 | ) | (373,335 | ) | |||||||||
20,198,162 | 17,446,140 | ||||||||||||
Less depreciation, depletion, and amortization | (2,617,478 | ) | (1,557,675 | ) | |||||||||
Net capitalized cost | $ | 17,580,684 | $ | 15,888,465 | |||||||||
Costs Incurred in Oil and Gas Activities | |||||||||||||
Costs incurred in property acquisition, exploration and development activities for the year ended July 31, 2013 were as follows. | |||||||||||||
Total | Namibia | USA | |||||||||||
Property acquisition | |||||||||||||
Unproved | $ | 808,307 | $ | 677,795 | $ | 130,512 | |||||||
Proved | 3,000 | - | 3,000 | ||||||||||
Exploration | 404,265 | 35,860 | 368,405 | ||||||||||
Development | 1,732,451 | - | 1,732,451 | ||||||||||
Cost recovery | (196,001 | ) | - | (196,001 | ) | ||||||||
Total costs incurred | $ | 2,752,022 | $ | 713,655 | $ | 2,038,367 | |||||||
Costs incurred in property acquisition, exploration, and development activities for the year ended July 31, 2012 were all incurred in the USA. The following table provides information about the costs incurred: | |||||||||||||
31-Jul-12 | |||||||||||||
Property acquisition | |||||||||||||
Unproved | $ | 74,805 | |||||||||||
Proved | 6,988,447 | ||||||||||||
Exploration | 420,200 | ||||||||||||
Development | 2,033,073 | ||||||||||||
Cost recovery | (32,772 | ) | |||||||||||
Total costs incurred | $ | 9,483,753 | |||||||||||
Costs Excluded | |||||||||||||
Our excluded costs as of July 31, 2013 relate to costs incurred in the concession acquired in Namibia, Africa. The concession provides for a multi-year exploration program as described in Note 4 - Oil and Gas Properties. The program provides that an initial well be drilled by September 2017. Accordingly, we anticipate including the excluded costs in the amortization base within the next four to five years. All costs that were excluded as of July 31, 2013 were incurred during that year. | |||||||||||||
Costs Excluded by Year Incurred | |||||||||||||
As of July 31, 2013 | |||||||||||||
Property Acquisition | $ | 677,795 | |||||||||||
Exploration | 35,860 | ||||||||||||
Total | $ | 713,655 | |||||||||||
Costs excluded as of July 31, 2012 consisted of acquisition and drilling costs associated with a project onshore in Texas, the Chapman Ranch prospect. During the year ended July 31, 2013, we incurred additional acquisition and exploration costs for this project as well as other projects onshore in Texas. All such costs were classified as evaluated as of July 31, 2013 because they were not successful in discovering oil and gas reserves. | |||||||||||||
Changes in Costs Excluded by Country | |||||||||||||
Namibia | United States | ||||||||||||
Balance at July 31, 2011 | $ | - | $ | - | |||||||||
Additional Cost Incurred | - | 265,639 | |||||||||||
Costs Transferred to DD&A Pool | - | - | |||||||||||
Balance at July 31, 2012 | 265,639 | ||||||||||||
Additional Costs Incurred | 713,655 | 278,090 | |||||||||||
Cost recovery | - | (132,662 | ) | ||||||||||
Costs Transferred to DD&A Pool | - | (411,067 | ) | ||||||||||
Balance at July 31, 2013 | $ | 713,655 | $ | - | |||||||||
Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Natural Gas Reserves | |||||||||||||
The following Standardized Measure of Discounted Future Net Cash Flow information has been developed utilizing ASC 932, Extractive Activities -Oil and Gas, (ASC 932) procedures and based on estimated oil and natural gas reserve and production volumes. It can be used for some comparisons, but should not be the only method used to evaluate us or our performance. Further, the information in the following table may not represent realistic assessments of future cash flows, nor should the Standardized Measure of Discounted Future Net Cash Flow be viewed as representative of our current value. | |||||||||||||
We believe that the following factors should be taken into account when reviewing the following information: | |||||||||||||
● | future costs and selling prices will probably differ from those required to be used in these calculations; | ||||||||||||
● | due to future market conditions and governmental regulations, actual rates of production in future years may vary significantly from the rate of production assumed in the calculations; | ||||||||||||
● | a 10% discount rate may not be reasonable as a measure of the relative risk inherent in realizing future net oil and natural gas revenues; and | ||||||||||||
● | future net revenues may be subject to different rates of income taxation. | ||||||||||||
Under the Standardized Measure, the future cash inflows were estimated by applying the un-weighted 12-month average of the first day of the month cash price quotes, except for volumes subject to fixed price contracts, to the estimated future production of year-end proved reserves. Estimates of future income taxes are computed using current statutory income tax rates including consideration for estimated future statutory depletion and tax credits. The resulting net cash flows are reduced to present value amounts by applying a 10% discount factor. All proved reserves are located in the United States of America. | |||||||||||||
The Standardized Measure is as follows: | |||||||||||||
2013 | 2012 | ||||||||||||
Future cash inflows | $ | 113,603,450 | $ | 200,741,090 | |||||||||
Future production costs | (55,897,070 | ) | (60,998,060 | ) | |||||||||
Future development costs | (41,794,284 | ) | (48,640,439 | ) | |||||||||
Future income tax expenses | (5,569,234 | ) | (31,885,907 | ) | |||||||||
Future net cash flows | 10,342,862 | 59,216,684 | |||||||||||
10% annual discount for estimated timing of cash flows | (3,990,069 | ) | (25,552,798 | ) | |||||||||
Future net cash flows at end of year | $ | 6,352,793 | $ | 33,663,886 | |||||||||
Changes in Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Natural Gas Reserves | |||||||||||||
The following is a summary of the changes in the Standardized Measure of discounted future net cash flows for our proved oil and natural gas reserves during each of the years in the two year period ended July 31, 2013: | |||||||||||||
2013 | 2012 | ||||||||||||
Standardized measure of discounted future net cash flows at beginning of year | $ | 33,663,886 | $ | 36,116,218 | |||||||||
Net changes in prices and production costs | (37,623,010 | ) | (3,316,394 | ) | |||||||||
Changes in estimated future development costs | 4,205,045 | (10,006,008 | ) | ||||||||||
Sales of oil and gas produced, net of production costs | (2,510,339 | ) | (3,152,150 | ) | |||||||||
Discoveries and extensions | - | 54,414 | |||||||||||
Purchases of minerals in place | - | 16,662,628 | |||||||||||
Sales of minerals in place | (17 | ) | (2,042,655 | ) | |||||||||
Revisions of previous quantity estimates | (12,391,911 | ) | (6,669,453 | ) | |||||||||
Development costs incurred | 1,124,107 | 1,085,180 | |||||||||||
Change in income taxes | 14,705,973 | 1,320,486 | |||||||||||
Accretion of discount | 5,179,059 | 3,611,622 | |||||||||||
Standardized measure of discounted future net cash flows at year end | $ | 6,352,793 | $ | 33,663,886 | |||||||||
The following schedule includes only the revenues from the production and sale of gas, oil, condensate and NGLs. The income tax expense is calculated by applying the current statutory tax rates to the revenues after deducting costs, which include DD&A allowances, after giving effect to permanent differences. The results of operations exclude general office overhead and interest expense attributable to oil and gas activities. | |||||||||||||
Results of Operations for Producing Activities | |||||||||||||
2013 | 2012 | ||||||||||||
Net revenues from production | $ | 7,070,540 | $ | 7,165,233 | |||||||||
Expenses | |||||||||||||
Lease operating expense | 4,560,201 | 4,013,083 | |||||||||||
Accretion | 1,056,508 | 943,508 | |||||||||||
Operating expenses | 5,616,709 | 4,956,591 | |||||||||||
Depreciation, depletion and amortization | 1,059,803 | 990,486 | |||||||||||
Total expenses | 6,676,512 | 5,947,077 | |||||||||||
Income before income tax | 394,028 | 1,218,156 | |||||||||||
Income tax expense | (137,910 | ) | (426,355 | ) | |||||||||
Results of operations | $ | 256,118 | $ | 791,801 | |||||||||
Depreciation, depletion and amortization rate per net equivalent MCFE | $ | 1.95 | $ | 1.68 | |||||||||
Description_of_Business_and_Su1
Description of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||
Jul. 31, 2013 | |||||
Description of Business and Summary of Significant Accounting Policies [Abstract] | ' | ||||
Description of business and basis of presentation | ' | ||||
Description of business and basis of presentation | |||||
Duma Energy Corp. ("we", "us", "Duma", the "Company") was formed for the purpose of oil and gas exploration, development, and production. We own 100% of Penasco Petroleum Inc. ("Penasco"), a Nevada corporation incorporated on November 23, 2005 and 100% of Galveston Bay, LLC, ("GBE"), a Texas limited liability company, 100% of SPE Navigation I, LLC ("SPE") a Nevada limited liability company and 100% of Namibia Exploration, Inc. ("NEI") a Nevada corporation. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"). | |||||
Reclassifications | ' | ||||
Reclassifications | |||||
Certain prior year amounts have been reclassified to conform with the current presentation. | |||||
Principles of consolidation | ' | ||||
Principles of consolidation | |||||
The accompanying consolidated financial statements include the accounts of Duma and our wholly owned subsidiaries, Penasco, SPE, GBE and NEI. All significant intercompany accounts and transactions have been eliminated in consolidation. | |||||
Use of estimates | ' | ||||
Use of estimates | |||||
The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, if any, at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the respective reporting periods. We base our estimates and judgments on historical experience and on various other assumptions and information that we believe to be reasonable under the circumstances. Estimates and assumptions about future events and their effects cannot be perceived with certainty and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as our operating environment changes. | |||||
Significant areas requiring management's estimates and assumptions include the determination of the fair value of transactions involving stock-based compensation and financial instruments, estimates of the costs and timing of asset retirement obligations, and oil and natural gas proved reserve quantities. Oil and natural gas proved reserve quantities which form the basis for the calculation of amortization of oil and natural gas properties and for asset impairment tests. Management emphasizes that reserve estimates are inherently imprecise and that estimates of more recent reserve discoveries are more imprecise than those for properties with long production histories. | |||||
Actual results may differ from the estimates and assumptions used in the preparation of our consolidated financial statements. | |||||
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. | |||||
Our functional currency is the United States dollars. Transactions denominated in foreign currencies are translated into their United States dollar equivalents using current exchange rates. Monetary assets and liabilities are translated using exchange rates that prevailed as of the balance sheet date. Non-monetary assets and liabilities are translated using exchange rates that prevailed as of the transaction date. Revenue, if applicable and expenses are translated using average exchange rates over the accounting period. We have had no revenue denominated in foreign currencies. Gains or losses resulting from foreign currency transactions are included in results of operations. | |||||
Receivables and allowance for doubtful accounts | ' | ||||
Receivables and allowance for doubtful accounts | |||||
Oil and gas revenues receivable are recorded at the invoiced amount and do not bear any interest. We regularly review collectability and establish or adjust an allowance for uncollectible amounts as necessary using the specific identification method. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Management has determined that a reserve for uncollectible amounts was not required in the periods presented. | |||||
Accounts receivable - related party includes the oil and gas revenue receivable from our Barge Canal properties, which, up until September 1, 2013, were operated by a company owned by one of our former officers who was also a director, and joint interest billings receivable from two working interest partners who are related to the Chief Financial Officer and the Chief Executive Officer. | |||||
Other receivables consist of joint interest billings due to us from participants holding a working interest in oil and gas properties that we operate. | |||||
We regularly review collectability and establish or adjust an allowance for uncollectible amounts as necessary using the specific identification method. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of July 31, 2013 and 2012, we have reserved $58,585 and $1,302, respectively, for potentially uncollectable other receivables. | |||||
Available for sale securities | ' | ||||
Available for sale securities | |||||
We invest in marketable equity securities which are classified as available for sale. The first in first out method is used to determine the cost basis of our equity securities sold. Available-for-sale securities are marked to market based on the fair values of the securities determined in accordance with ASC Section 820 (Fair Value Measurement), with the unrealized gains and losses, net of tax, reported as a component of Accumulated other comprehensive income (loss). | |||||
Other current assets | ' | ||||
Other current assets | |||||
Other current assets consist primarily of prepaid insurance, prepaid interest expense, prepayments made towards properties not operated by us, and accrued interest on our deposits. | |||||
Concentrations | ' | ||||
Concentrations | |||||
Our operations are concentrated in Texas and the majority of our operations are conducted offshore in Galveston Bay. We operate in the oil and gas exploration and production industry. If the oil and natural gas exploration and production industry as a whole were adversely affected, for example by weather, supply shortages, or other factors, we would also experience adverse effects. Because our properties are offshore, we are also vulnerable to adverse weather. | |||||
For the year ended July 31, 2013, 85% of our revenue was attributable to one purchaser. At July 31, 2013, this same purchaser accounted for 76% of our accounts receivable. For the year ended July 31, 2012, 67% of our revenue was attributable to one purchaser. At July 31, 2012, this same purchaser accounted for 79% of our accounts receivable. | |||||
We place cash with high quality financial institutions and at times may exceed the federally insured limits. We have not experienced a loss in such accounts nor do we expect any related losses in the near term. | |||||
Oil and natural gas properties | ' | ||||
Oil and natural gas properties | |||||
We account for our oil and natural gas producing activities using the full cost method of accounting as prescribed by the United States Securities and Exchange Commission (SEC). Under this method, subject to a limitation based on estimated value, all costs incurred in the acquisition, exploration, and development of proved oil and natural gas properties, including internal costs directly associated with acquisition, exploration, and development activities, the costs of abandoned properties, dry holes, geophysical costs, and annual lease rentals are capitalized within a cost center. Costs of production and general and administrative corporate costs unrelated to acquisition, exploration, and development activities are expensed as incurred. | |||||
Costs associated with unevaluated properties are capitalized as oil and natural gas properties but are excluded from the amortization base during the evaluation period. When we determine whether the property has proved recoverable reserves or not, or if there is an impairment, the costs are transferred into the amortization base and thereby become subject to amortization. | |||||
We assess all items classified as unevaluated property on at least an annual basis for inclusion in the amortization base. We assess properties on an individual basis or as a group if properties are individually insignificant. The assessment includes consideration of the following factors, among others: intent to drill; remaining lease term; geological and geophysical evaluations; drilling results and activity; the assignment of proved reserves; and the economic viability of development if proved reserves are assigned. During any period in which these factors indicate that there would be impairment, or if proved reserves are assigned to a property, the cumulative costs incurred to date for such property are transferred to the amortizable base and are then subject to amortization. | |||||
Capitalized costs included in the amortization base are depleted using the unit of production method based on proved reserves. Depletion is calculated using the capitalized costs included in the amortization base, including estimated asset retirement costs, plus the estimated future expenditures to be incurred in developing proved reserves, net of estimated salvage values. | |||||
Sales or other dispositions of oil and natural gas properties are accounted for as adjustments to capitalized costs, with no gain or loss recorded unless the ratio of cost to proved reserves would significantly change. | |||||
Impairment | ' | ||||
Impairment | |||||
The net book value of all capitalized oil and natural gas properties within a cost center, less related deferred income taxes, is subject to a full cost ceiling limitation which is calculated quarterly. Under the ceiling limitation, costs may not exceed an aggregate of the present value of future net revenues attributable to proved oil and natural gas reserves discounted at 10 percent using current prices, plus the lower of cost or market value of unproved properties included in the amortization base, plus the cost of unevaluated properties, less any associated tax effects. Any excess of the net book value, less related deferred tax benefits, over the ceiling is written off as expense. Impairment expense recorded in one period may not be reversed in a subsequent period even though higher oil and gas prices may have increased the ceiling applicable to the subsequent period. During the years ended July 31, 2013 and July 31, 2012, the ceiling exceeded the net book value of the property and it was not necessary to record an impairment charge. | |||||
Asset retirement obligation | ' | ||||
Asset retirement obligation | |||||
We record the fair value of an asset retirement cost, and corresponding liability as part of the cost of the related long-lived asset and the cost is subsequently allocated to expense using a systematic and rational method. We record an asset retirement obligation to reflect our legal obligations related to future plugging and abandonment of our oil and natural gas wells and gathering systems. We estimate the expected cash flow associated with the obligation and discount the amount using a credit-adjusted, risk-free interest rate. At least annually, we reassess the obligation to determine whether a change in the estimated obligation is necessary. We evaluate whether there are indicators that suggest the estimated cash flows underlying the obligation have materially changed. Should those indicators suggest the estimated obligation may have materially changed on an interim basis (quarterly), we will update our assessment accordingly. Additional retirement obligations increase the liability associated with new oil and natural gas wells and gathering systems as these obligations are incurred. | |||||
Restricted cash | ' | ||||
Restricted cash | |||||
Restricted cash consists of certificates of deposit that have been posted as collateral for letters of credit supporting bonds guaranteeing remediation of our oil and gas properties in Texas and escrow funds deposited directly with regulatory authorities. As of July 31, 2013 and 2012, restricted cash totaled $6,920,739 and $6,890,000, respectively. | |||||
Other assets | ' | ||||
Other assets | |||||
Other assets at July 31, 2013 and 2012 consisted primarily of prepaid land use fees, which are payments that cover multiple years (typically ten years) rental for easements and surface leases. These are paid as they come due on an ongoing basis and amortized over the rental period. In addition, other assets also include a domain name for $30,267, which is an intangible asset with an indefinite life due to the fact that it is renewable annually for nominal cost. We evaluate intangible assets with an indefinite life for possible impairment at least annually by comparing the fair value of the asset with its carrying value. | |||||
Property and equipment, other than oil and gas | ' | ||||
Property and equipment, other than oil and gas | |||||
Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related asset, generally three to five years. Fully depreciated assets are retained in property and accumulated depreciation accounts until they are removed from service. We perform ongoing evaluations of the estimated useful lives of the property and equipment for depreciation purposes. Maintenance and repairs are expensed as incurred. | |||||
Impairment of long-lived assets | ' | ||||
Impairment of long-lived assets | |||||
We periodically review our long-lived assets, other than oil and gas property, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. We recognize an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset's estimated fair value and its book value. We recorded no impairment on our non-oil and gas long-lived assets during the years ended July 31, 2013 and 2012, respectively. | |||||
Advances | ' | ||||
Advances | |||||
Advances consist of prepayments received from working interest partners pertaining to their share of the costs of drilling oil and gas wells. Partners are billed in advance for the estimated cost to drill a well and as the work proceeds, the prepayment is applied against their share of the actual drilling cost. As of July 31, 2013 and 2012, advances totaled $180,804 and $55,161, respectively. | |||||
Revenue recognition | ' | ||||
Revenue recognition | |||||
We recognize revenue when persuasive evidence of an arrangement exists, services have been rendered, the sales price is fixed or determinable, and collectability is reasonably assured. We follow the "sales method" of accounting for oil and natural gas revenue, so we recognize revenue on all natural gas or crude oil sold to purchasers, regardless of whether the sales are proportionate to our ownership in the property. Actual sales of gas are based on sales, net of the associated volume charges for processing fees and for costs associated with delivery, transportation, marketing, and royalties in accordance with industry standards. Operating costs and taxes are recognized in the same period in which revenue is earned. Severance and ad valorum taxes are reflected as a component of lease operating expense. | |||||
Income taxes | ' | ||||
Income taxes | |||||
We account for income taxes using the asset and liability method. Under this method, deferred income tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. | |||||
Fair value | ' | ||||
Fair value | |||||
Accounting standards regarding fair value of financial instruments define fair value, establish a three-level hierarchy which prioritizes and defines the types of inputs used to measure fair value, and establish disclosure requirements for assets and liabilities presented at fair value on the consolidated balance sheets. | |||||
Fair value is the amount that would be received from the sale of an asset or paid for the transfer of a liability in an orderly transaction between market participants. A liability is quantified at the price it would take to transfer the liability to a new obligor, not at the amount that would be paid to settle the liability with the creditor. | |||||
The three-level hierarchy is as follows: | |||||
● | Level 1 inputs consist of unadjusted quoted prices for identical instruments in active markets. | ||||
● | Level 2 inputs consist of quoted prices for similar instruments. | ||||
● | Level 3 valuations are derived from inputs which are significant and unobservable and have the lowest priority. | ||||
Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. We have determined that certain warrants outstanding during the period covered by these financial statements qualify as derivative financial instruments under the provisions of FASB ASC Topic No. 815-40, " Derivatives and Hedging - Contracts in an Entity's Own Stock." (See Note 8 - Fair Value). | |||||
The fair value of these warrants was determined using a lattice model with any change in fair value during the period recorded in earnings as "Gain on derivative warrant liability." | |||||
Significant inputs used to calculate the fair value of the warrants include expected volatility, risk-free interest rate and management's assumptions regarding the likelihood of a future repricing of these warrants pursuant to the down-round provision. | |||||
We had no financial assets and liabilities that were accounted for at fair value on a recurring basis as of July 31, 2013 and o ur derivative warrant liability was our only financial asset or liability that was accounted for at fair value, using a Level 3 valuation technique, on a recurring basis as of July 31, 2012. The carrying amounts reported in the balance sheet for cash, accounts receivable, accounts receivable - related party, accounts payable and accrued expenses, and notes payable approximate their fair market value based on the short-term maturity of these instruments. | |||||
Stock-based compensation | ' | ||||
Stock-based compensation | |||||
ASC 718, "Compensation-Stock Compensation" requires recognition in the financial statements of the cost of employee services received in exchange for an award of equity instruments over the period the employee is required to perform the services in exchange for the award (presumptively the vesting period). We measure the cost of employee services received in exchange for an award based on the grant-date fair value of the award. | |||||
We account for non-employee share-based awards based upon ASC 505-50, "Equity-Based Payments to Non-Employees." ASC 505-50 requires the costs of goods and services received in exchange for an award of equity instruments to be recognized using the fair value of the goods and services or the fair value of the equity award, whichever is more reliably measurable. The fair value of the equity award is determined on the measurement date, which is the earlier of the date that a performance commitment is reached or the date that performance is complete. Generally, our awards do not entail performance commitments. When an award vests over time such that performance occurs over multiple reporting periods, we estimate the fair value of the award as of the end of each reporting period and recognize an appropriate portion of the cost based on the fair value on that date. When the award vests, we adjust the cost previously recognized so that the cost ultimately recognized is equivalent to the fair value on the vesting date, which is presumed to be the date performance is complete. | |||||
We recognize the cost associated with share-based awards that have a graded vesting schedule on a straight-line basis over the requisite service period of the entire award. | |||||
Stock Split | ' | ||||
Stock Split | |||||
On April 4, 2012, we effected a 1-for-25 reverse stock split. All share and per share amounts have been retroactively restated to reflect the reverse split. This presentation is consistent with the guidance in ASC 260-10-55-12, Earnings Per Share, which requires retroactive restatement of earnings per share if a capital structure change due to a stock dividend, stock split or reverse split occurs after the date of the latest balance sheet, but before the release of the financial statements or the effective date of the registration statement, whichever is later. | |||||
Earnings per share | ' | ||||
Earnings per share | |||||
We compute basic earnings per share using the weighted average number of shares of common stock outstanding during each period. Diluted earnings per share includes the dilutive effects of common stock equivalents on an "as if converted" basis. For the years ended July 31, 2013 and 2012, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share. | |||||
Contingencies | ' | ||||
Contingencies | |||||
Legal | |||||
We are subject to legal proceedings, claims and liabilities which arise in the ordinary course of business. We accrue for losses associated with legal claims when such losses are probable and can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. Legal fees are charged to expense as they are incurred. See Note 12 - Commitments and Contingencies for more information on legal proceedings. | |||||
Environmental | |||||
We accrue for losses associated with environmental remediation obligations when such losses are probable and can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. Costs of future expenditures for environmental remediation obligations are not discounted to their present value. Recoveries of environmental remediation costs from other parties are recorded at their undiscounted value as assets when their receipt is deemed probable. | |||||
Accumulated Other Comprehensive Income (Loss), net of tax | ' | ||||
Accumulated Other Comprehensive Income (Loss), net of tax | |||||
We follow the provisions of ASC 220, "Comprehensive Income", which establishes standards for reporting comprehensive income. In addition to net loss, comprehensive loss includes all changes to equity during a period, except those resulting from investments and distributions to the owners of the Company. The components of accumulated other comprehensive loss: | |||||
Accumulated Other Comprehensive Loss | |||||
Accumulated other comprehensive loss at July 31, 2012 | $ | (743,082 | ) | ||
Reclassification into earnings | 743,082 | ||||
Accumulated other comprehensive loss at July 31, 2013 | $ | - | |||
Recent accounting pronouncements | ' | ||||
Recent accounting pronouncements | |||||
Recently issued or adopted accounting pronouncements are not expected to have, or did not have, a material impact on our financial position or results from operations. |
Description_of_Business_and_Su2
Description of Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||
Jul. 31, 2013 | |||||
Description of Business and Summary of Significant Accounting Policies [Abstract] | ' | ||||
Schedule of the Components of Accumulated Other Comprehensive Income (Loss) | ' | ||||
The components of accumulated other comprehensive loss: | |||||
Accumulated Other Comprehensive Loss | |||||
Accumulated other comprehensive loss at July 31, 2012 | $ | (743,082 | ) | ||
Reclassification into earnings | 743,082 | ||||
Accumulated other comprehensive loss at July 31, 2013 | $ | - |
Acquisitions_Tables
Acquisitions (Tables) | 12 Months Ended | ||||
Jul. 31, 2013 | |||||
Business Acquisition [Line Items] | ' | ||||
Summary of Pro Forma Information | ' | ||||
Revenues | $ | 7,313,232 | |||
Loss from operations | (7,419,747 | ) | |||
Net loss | (4,776,288 | ) | |||
Loss per share, basic and diluted | (0.47 | ) |
Oil_and_Gas_Properties_Tables
Oil and Gas Properties (Tables) | 12 Months Ended | ||||||||
Jul. 31, 2013 | |||||||||
Oil and Gas Properties [Abstract] | ' | ||||||||
Schedule of Oil and Natural Gas Properties | ' | ||||||||
Oil and natural gas properties as of July 31, 2013 and July 31, 2012 consisted of the following: | |||||||||
31-Jul-13 | 31-Jul-12 | ||||||||
Evaluated Properties | |||||||||
Costs subject to depletion, net of accumulated impairment of $373,355 and $373,355, respectively | $ | 19,484,507 | $ | 17,180,501 | |||||
Accumulated depletion | (2,617,478 | ) | (1,557,675 | ) | |||||
Total evaluated properties | 16,867,029 | 15,622,826 | |||||||
Unevaluated properties | 713,655 | 265,639 | |||||||
Net oil and gas properties | $ | 17,580,684 | $ | 15,888,465 | |||||
Asset_Retirement_Obligation_Ta
Asset Retirement Obligation (Tables) | 12 Months Ended | ||||||||
Jul. 31, 2013 | |||||||||
Asset Retirement Obligation [Abstract] | ' | ||||||||
Schedule of Reconciliation of Asset Retirement Obligations | ' | ||||||||
The following is a reconciliation of our asset retirement obligation liability as of July 31, 2013 and 2012: | |||||||||
2013 | 2012 | ||||||||
Liability for asset retirement obligation, beginning of period | $ | 9,382,933 | $ | 4,455,928 | |||||
Asset retirement obligations assumed | - | 2,365,530 | |||||||
Asset retirement obligations sold | (438 | ) | (32,772 | ) | |||||
Asset retirement obligations incurred on properties drilled | 26,500 | 1,389 | |||||||
Accretion | 1,056,508 | 943,508 | |||||||
Revisions in estimated cash flows | 786,120 | 1,827,889 | |||||||
Costs incurred | (318,225 | ) | (178,539 | ) | |||||
Liability for asset retirement obligation, end of period | $ | 10,933,398 | $ | 9,382,933 | |||||
Current portion of asset retirement obligation | $ | 724,374 | $ | 549,796 | |||||
Noncurrent portion of asset retirement obligation | 10,209,024 | 8,833,137 | |||||||
Total liability for asset retirement obligation | $ | 10,933,398 | $ | 9,382,933 | |||||
Notes_Payable_Tables
Notes Payable (Tables) | 12 Months Ended | ||||
Jul. 31, 2013 | |||||
Notes Payable [Abstract] | ' | ||||
Schedule of Future Maturities on Notes Payable | ' | ||||
As of July 31, 2013, future maturities on our notes payable were as follows: | |||||
Fiscal year ending: | |||||
2014 | $ | 1,059,644 | |||
2015 | 942,992 | ||||
Total | $ | 2,002,636 |
Fair_Value_Tables
Fair Value (Tables) | 12 Months Ended | ||||||||||||||||
Jul. 31, 2013 | |||||||||||||||||
Fair Value [Abstract] | ' | ||||||||||||||||
Schedule of Assets and Liabilities Measured on a Recurring Basis | ' | ||||||||||||||||
The following table sets forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis as of July 31, 2012. | |||||||||||||||||
Carrying Value at | Fair Value Measurement at July 31, 2012 | ||||||||||||||||
31-Jul-12 | Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets: | |||||||||||||||||
Available for sale securities | $ | 313,446 | $ | 313,446 | $ | - | $ | - | |||||||||
Liabilities: | |||||||||||||||||
Derivative warrant liability | $ | 1,325,388 | $ | - | $ | - | $ | 1,325,388 | |||||||||
Reconciliation of the Changes in Fair Value Measurement of Level 3 Derivative Warrant Liabilities | ' | ||||||||||||||||
The following table sets forth the changes in the fair value measurement of our Level 3 derivative warrant liability during the years ended July 31, 2013 and 2012: | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Beginning of the period | $ | 1,325,388 | $ | 2,543,223 | |||||||||||||
Expiration of derivative warrant feature | (269,164 | ) | - | ||||||||||||||
Unrealized gain on changes in fair value of derivative liability | (1,056,224 | ) | (1,217,835 | ) | |||||||||||||
End of the period | $ | - | $ | 1,325,388 |
Capital_Stock_Tables
Capital Stock (Tables) | 12 Months Ended | ||||||||||||||||
Jul. 31, 2013 | |||||||||||||||||
Capital Stock [Abstract] | ' | ||||||||||||||||
Schedule of Assumptions Used to Estimate Fair Value of Stock Option Awards | ' | ||||||||||||||||
The following table details the significant assumptions used to compute the fair market values of stock options granted or revalued during the years ended July 31: | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Risk-free interest rate | 1.11% - 2.00% | 0.12% - 1.66% | |||||||||||||||
Dividend yield | 0% | 0% | |||||||||||||||
Volatility factor | 140.30%-144% | 135%-148% | |||||||||||||||
Expected life (years) | 6.5 years | 1-6.5 years | |||||||||||||||
Schedule of Information Relating to Stock Options Granted to Nonemployees Under Stock Incentive Plans | ' | ||||||||||||||||
The following table provides information about options granted to non-employees under our stock incentive plans during the years ended July 31, 2013 and 2012: | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Number of options granted | 600,000 | - | |||||||||||||||
Compensation expense recognized | $ | 679,174 | $ | 424,569 | |||||||||||||
Weighted average exercise price of options granted | $ | 2.2 | $ | N/ | A | ||||||||||||
Schedule of Information Relating to Stock Options Granted to Employees Under Stock Incentive Plans | ' | ||||||||||||||||
The following table provides information about options granted to employees under our stock incentive plans during the years ended July 31, 2013 and 2012: | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Number of options granted | - | - | |||||||||||||||
Compensation expense recognized | $ | 253,952 | $ | 263,201 | |||||||||||||
Weighted average exercise price of options granted | $ | N/A | $ | N/A | |||||||||||||
Summary of Stock Option Activity Under Stock Option and Incentive Plans | ' | ||||||||||||||||
Summary information regarding stock options issued and outstanding as of July 31, 2013 is as follows: | |||||||||||||||||
Options | Weighted Average | Aggregate intrinsic | Weighted average remaining contractual | ||||||||||||||
Share Price | value | life (years) | |||||||||||||||
Outstanding at July 31, 2011 | 1,101,200 | $ | 2.5 | $ | 1,101,200 | 8.14 | |||||||||||
Granted | - | - | |||||||||||||||
Exercised | - | - | |||||||||||||||
Expired or forfeited | (57,200 | ) | 2.5 | ||||||||||||||
Outstanding at July 31, 2012 | 1,044,000 | $ | 2.5 | $ | - | 7.22 | |||||||||||
Granted | 600,000 | 2.2 | |||||||||||||||
Exercised | - | - | |||||||||||||||
Expired or forfeited | (108,000 | ) | 2.5 | ||||||||||||||
Outstanding at July 31,2013 | 1,536,000 | $ | 2.38 | $ | - | 7.98 | |||||||||||
Exercisable at July 31, 2013 | 776,800 | $ | 2.5 | $ | - | 6.82 | |||||||||||
Schedule of Stock Options Outstanding and Exercisable | ' | ||||||||||||||||
Options outstanding and exercisable as of July 31, 2013: | |||||||||||||||||
Exercise Price | Outstanding Number of | Remaining Life | Exercisable Number of | ||||||||||||||
Shares | Shares | ||||||||||||||||
$ | 2.2 | 600,000 | 9.54 years | - | |||||||||||||
2.5 | 796,000 | 7.73 years | 636,800 | ||||||||||||||
2.5 | 60,000 | 3.93 years | 60,000 | ||||||||||||||
2.5 | 24,000 | 5.81 years | 24,000 | ||||||||||||||
2.5 | 56,000 | Less than 1 year | 56,000 | ||||||||||||||
1,536,000 | 776,800 | ||||||||||||||||
Options outstanding and exercisable as of July 31, 2012: | |||||||||||||||||
Exercise Price | Outstanding Number of | Remaining Life | Exercisable Number of | ||||||||||||||
Shares | Shares | ||||||||||||||||
$ | 2.5 | 800,000 | 8.72 years | 320,000 | |||||||||||||
2.5 | 24,000 | 6.81 years | 24,000 | ||||||||||||||
2.5 | 60,000 | 4.93 years | 60,000 | ||||||||||||||
2.5 | 56,000 | 1.04 years | 56,000 | ||||||||||||||
2.5 | 104,000 | Less than 1 year | 104,000 | ||||||||||||||
1,044,000 | 564,000 | ||||||||||||||||
Schedule of Nonvested Share Activity | ' | ||||||||||||||||
Summary information regarding nonvested stock options as of July 31, 2013 is as follows: | |||||||||||||||||
Number of shares | Weighted average grant date fair value | ||||||||||||||||
Nonvested at July 31, 2012 | 480,000 | $ | 2.47 | ||||||||||||||
Granted | 600,000 | $ | 1.99 | ||||||||||||||
Vested | (319,200 | ) | $ | 2.47 | |||||||||||||
Forfeited | (1,600 | ) | $ | 2.47 | |||||||||||||
Nonvested at July 31, 2013 | 759,200 | $ | 2.09 | ||||||||||||||
Schedule of Information for Warrants Granted to Related Parties | ' | ||||||||||||||||
The following table reflects information regarding Warrant B and Warrant C as of July 31, 2013 and 2012: | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Fair Value of Warrant B as of the end of the derived service period in 2013 and as of July 31, 2012 | $ | 266,017 | $ | 177,150 | |||||||||||||
Fair Value of Warrant C as of July 31, 2013 and 2012, respectively | $ | 202,127 | $ | 139,491 | |||||||||||||
Compensation expense recognized during the years ended July 31, 2013 and 2012, respectively | $ | 196,384 | $ | 189,372 | |||||||||||||
Summary of Warrant Activity | ' | ||||||||||||||||
Summary information regarding common stock warrants issued and outstanding as of July 31, 2013, is as follows: | |||||||||||||||||
Warrants | Weighted Average Share Price | Aggregate intrinsic value | Weighted average remaining contractual life (years) | ||||||||||||||
Outstanding at year ended July 31, 2011 | 3,758,455 | $ | 2.5 | $ | 3,710,880 | 3.83 | |||||||||||
Granted | - | - | - | - | |||||||||||||
Exercised | - | - | - | - | |||||||||||||
Expired | (2,000 | ) | 25 | - | - | ||||||||||||
Outstanding at year ended July 31, 2012 | 3,756,455 | $ | 2.58 | $ | - | 2.83 | |||||||||||
Granted | - | - | - | - | |||||||||||||
Exercised | - | - | - | - | |||||||||||||
Expired | (45,578 | ) | 9.34 | - | - | ||||||||||||
Outstanding at year ended July 31,2013 | 3,710,877 | $ | 2.5 | $ | - | 1.87 | |||||||||||
Schedule of Warrants Outstanding and Exercisable | ' | ||||||||||||||||
Warrants outstanding and exercisable as of July 31, 2013: | |||||||||||||||||
Exercise Price | Outstanding Number of Shares | Remaining Life | Exercisable Number of Shares | ||||||||||||||
$ | 2.5 | 2,000,000 | 3 years or less | 800,000 | |||||||||||||
2.5 | 1,253,757 | 2 years or less | 1,253,757 | ||||||||||||||
2.5 | 457,120 | 1 year or less | 457,120 | ||||||||||||||
3,710,877 | 2,510,877 | ||||||||||||||||
Warrants outstanding and exercisable as of July 31, 2012: | |||||||||||||||||
Exercise Price | Outstanding Number of Shares | Remaining Life | Exercisable Number of Shares | ||||||||||||||
$ | 2.5 | 2,000,000 | 3.55 years | 800,000 | |||||||||||||
2.5 | 1,253,757 | 2.21 years | 1,253,757 | ||||||||||||||
2.5 | 400,000 | 1.67 years | 400,000 | ||||||||||||||
2.5 | 5,120 | 1.57 years | 5,120 | ||||||||||||||
2.5 | 52,000 | 1.55 years | 52,000 | ||||||||||||||
6.25 | 8,000 | 1 year or less | 8,000 | ||||||||||||||
10 | 37,578 | 1 year or less | 37,578 | ||||||||||||||
3,756,455 | 2,556,455 |
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 12 Months Ended | ||||||||
Jul. 31, 2013 | |||||||||
Related Party Transactions [Abstract] | ' | ||||||||
Schedule of Revenues and Costs from Facility Controlled by Related Party | ' | ||||||||
Revenues generated, lease operating costs, and contractual overhead charges, which are included in lease operating costs incurred from these properties, were as follows: | |||||||||
Year Ended July 31, | |||||||||
2013 | 2012 | ||||||||
Revenue generated from Barge Canal properties | $ | 643,203 | $ | 569,476 | |||||
Lease operating costs incurred from Barge Canal properties | $ | 224,047 | $ | 181,113 | |||||
Overhead costs incurred | $ | 28,038 | $ | 25,087 | |||||
Outstanding accounts receivable at period end | $ | 91,967 | $ | 74,972 | |||||
Outstanding accounts payable at year end | $ | - | $ | - |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||
Jul. 31, 2013 | |||||||||
Income Taxes [Abstract] | ' | ||||||||
Reconciliation of Income Tax Provision at the Statutory Rate | ' | ||||||||
The reconciliation of our income tax provision at the statutory rate to the reported income tax expense is as follows: | |||||||||
July 31, | |||||||||
2013 | 2012 | ||||||||
US statutory federal rate | 35 | % | 35 | % | |||||
State income tax rate | 0.58 | % | 0.58 | % | |||||
Equity-based compensation | (33.62 | )% | (36.43 | )% | |||||
Gain on derivative warrants | 0.93 | % | 7.6 | % | |||||
Gain on sale of securities | (.33 | )% | (21.15 | )% | |||||
Other | (.50 | )% | 4.02 | % | |||||
Acquired deferred tax liability | - | % | 23.12 | % | |||||
Net operating loss | (1.75 | )% | 6.92 | % | |||||
0.31 | % | 19.66 | % | ||||||
Summary of Deferred Tax Assets | ' | ||||||||
Components of deferred tax assets as of July 31, 2013 and 2012 are as follows: | |||||||||
July 31, | |||||||||
2013 | 2012 | ||||||||
Stock based compensation | $ | 713,867 | $ | 292,509 | |||||
Property, including depreciable property | (2,980,005 | ) | (2,070,809 | ) | |||||
Asset retirement obligation | 3,942,918 | 3,312,358 | |||||||
Net operating loss carry-forward | 3,846,783 | 2,530,532 | |||||||
Other | 42,368 | 318,032 | |||||||
5,565,931 | 4,382,622 | ||||||||
Valuation allowance for deferred tax assets | (5,565,931 | ) | (4,382,622 | ) | |||||
$ | - | $ | - | ||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||||||||||||||
Jul. 31, 2013 | |||||||||||||||||
Commitments and Contingencies [Abstract] | ' | ||||||||||||||||
Schedule of Future Payment Obligations | ' | ||||||||||||||||
The following table details our payment obligations related to our operating leases and to our debt that are due during the years ended July 31, | |||||||||||||||||
2014 | 2015 | 2016 | Total | ||||||||||||||
Operating leases | $ | 71,047 | $ | - | $ | - | $ | 71,047 | |||||||||
Notes payable | 1,135,042 | 967,295 | - | 2,102,337 | |||||||||||||
Total | $ | 1,206,089 | $ | 967,295 | $ | - | $ | 2,173,384 | |||||||||
Schedule of Prepaid Balances | ' | ||||||||||||||||
The following table reflects the prepaid balances as of July 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Prepaid letter of credit fees | $ | 101,850 | $ | 25,163 | |||||||||||||
Amortization | (8,488 | ) | (8,596 | ) | |||||||||||||
Net prepaid letter of credit fees | $ | 93,362 | $ | 16,567 |
Additional_Financial_Statement1
Additional Financial Statement Information (Tables) | 12 Months Ended | |||||||||
Jul. 31, 2013 | ||||||||||
Additional Financial Statement Information [Abstract] | ' | |||||||||
Schedule of Other Current Assets | ' | |||||||||
Other current assets consisted of the following: | ||||||||||
At July 31, | ||||||||||
2013 | 2012 | |||||||||
Prepaid letter of credit fees | $ | 93,362 | 16,567 | |||||||
Prepaid insurance | 180,433 | 178,471 | ||||||||
Other prepaid expenses | 2,000 | 10,164 | ||||||||
Cash call paid to operator | 24,225 | 23,234 | ||||||||
Prepaid land use fees | 28,728 | 19,852 | ||||||||
Accrued interest income | 4,388 | 8,389 | ||||||||
Total other current assets | $ | 333,136 | $ | 256,677 | ||||||
Schedule of Property and Equipment | ' | |||||||||
Property and equipment consisted of the following: | ||||||||||
At July 31, | ||||||||||
Approximate Life | 2013 | 2012 | ||||||||
Furniture and fixtures | 5 years | $ | 7,604 | $ | 7,604 | |||||
Marine vessels | 5 years | 17,614 | 17,614 | |||||||
Vehicles | 5 years | 18,027 | 18,027 | |||||||
Computer equipment and software | 2 years | 39,296 | 39,296 | |||||||
Total property and equipment | 82,541 | 82,541 | ||||||||
Less accumulated depreciation | (62,749 | ) | (36,572 | ) | ||||||
Net book value | $ | 19,792 | $ | 45,969 | ||||||
Depreciation expense | $ | 26,177 | $ | 31,495 | ||||||
Schedule of Accounts Payables and Accrued Expenses | ' | |||||||||
Accounts payable and accrued expenses consisted of the following: | ||||||||||
At July 31, | ||||||||||
2013 | 2012 | |||||||||
Trade payables | $ | 3,068,671 | $ | 1,950,768 | ||||||
Accrued payroll | 151,577 | 40,000 | ||||||||
Accrued interest and fees | 398,966 | - | ||||||||
Revenue payable | 4,717 | 6,690 | ||||||||
Local taxes and royalty payable | 128,470 | 108,948 | ||||||||
Federal and state income taxes payable | 27,000 | 192,432 | ||||||||
Total accounts payable and accrued expenses | $ | 3,779,401 | $ | 2,298,838 |
Supplemental_Oil_and_Gas_Infor1
Supplemental Oil and Gas Information (Unaudited) (Tables) | 12 Months Ended | ||||||||||||
Jul. 31, 2013 | |||||||||||||
Supplemental Oil And Gas Infomation Unaudited [Abstract] | ' | ||||||||||||
Schedule of Net Proved Reserves | ' | ||||||||||||
Proved Reserves | |||||||||||||
Oil | Gas | Total | |||||||||||
(Barrels) | (MCF) | ( MCFE) | |||||||||||
Balance - July 31, 2011 | 1,218,950 | 12,561,090 | 19,874,790 | ||||||||||
Revisions of previous estimates | (88,689 | ) | (1,404,465 | ) | (1,936,599 | ) | |||||||
New discoveries and extensions | 660 | 11,840 | 15,800 | ||||||||||
Purchase of reserves in place | 383,070 | 4,108,360 | 6,406,780 | ||||||||||
Sale of reserves in place | (64,730 | ) | (315,910 | ) | (704,290 | ) | |||||||
Production | (61,011 | ) | (222,955 | ) | (589,021 | ) | |||||||
Balance - July 31, 2012 | 1,388,250 | 14,737,960 | 23,067,460 | ||||||||||
Revisions of previous estimates | (667,307 | ) | (1,830,745 | ) | (5,834,587 | ) | |||||||
Sale of reserves in place | (1 | ) | (2 | ) | (8 | ) | |||||||
Production | (61,242 | ) | (176,823 | ) | (544,275 | ) | |||||||
Balance - July 31, 2013 | 659,700 | 12,730,390 | 16,688,590 | ||||||||||
Proved Reserves as of July 31, 2013 | |||||||||||||
Oil | Gas | Total | |||||||||||
(Barrels) | (MCF) | ( MCFE) | |||||||||||
Proved developed producing | 256,290 | 1,554,420 | 3,092,160 | ||||||||||
Proved developed non-producing | 229,290 | 5,000,960 | 6,376,700 | ||||||||||
Proved undeveloped | 174,120 | 6,175,010 | 7,219,730 | ||||||||||
Total proved reserves | 659,700 | 12,730,390 | 16,688,590 | ||||||||||
Proved Reserves as of July 31, 2012 | |||||||||||||
Oil | Gas | Total | |||||||||||
(Barrels) | (MCF) | ( MCFE) | |||||||||||
Proved developed producing | 308,640 | 1,785,010 | 3,636,850 | ||||||||||
Proved developed non-producing | 321,510 | 4,226,080 | 6,155,140 | ||||||||||
Proved undeveloped | 758,100 | 8,726,870 | 13,275,470 | ||||||||||
Total proved reserves | 1,388,250 | 14,737,960 | 23,067,460 | ||||||||||
Schedule of Capitalized Costs | ' | ||||||||||||
The following table illustrates the total amount of capitalized costs relating to oil and natural gas producing activities and the total amount of related accumulated depreciation, depletion and amortization. | |||||||||||||
2013 | 2012 | ||||||||||||
Unevaluated properties | $ | 713,655 | $ | 265,639 | |||||||||
Evaluated properties | 19,857,842 | 17,553,836 | |||||||||||
Less impairment | (373,335 | ) | (373,335 | ) | |||||||||
20,198,162 | 17,446,140 | ||||||||||||
Less depreciation, depletion, and amortization | (2,617,478 | ) | (1,557,675 | ) | |||||||||
Net capitalized cost | $ | 17,580,684 | $ | 15,888,465 | |||||||||
Schedule of Costs Incurred | ' | ||||||||||||
Costs incurred in property acquisition, exploration and development activities for the year ended July 31, 2013 were as follows. | |||||||||||||
Total | Namibia | USA | |||||||||||
Property acquisition | |||||||||||||
Unproved | $ | 808,307 | $ | 677,795 | $ | 130,512 | |||||||
Proved | 3,000 | - | 3,000 | ||||||||||
Exploration | 404,265 | 35,860 | 368,405 | ||||||||||
Development | 1,732,451 | - | 1,732,451 | ||||||||||
Cost recovery | (196,001 | ) | - | (196,001 | ) | ||||||||
Total costs incurred | $ | 2,752,022 | $ | 713,655 | $ | 2,038,367 | |||||||
Costs incurred in property acquisition, exploration, and development activities for the year ended July 31, 2012 were all incurred in the USA. The following table provides information about the costs incurred: | |||||||||||||
31-Jul-12 | |||||||||||||
Property acquisition | |||||||||||||
Unproved | $ | 74,805 | |||||||||||
Proved | 6,988,447 | ||||||||||||
Exploration | 420,200 | ||||||||||||
Development | 2,033,073 | ||||||||||||
Cost recovery | (32,772 | ) | |||||||||||
Total costs incurred | $ | 9,483,753 | |||||||||||
Schedule of Costs Excluded by Year | ' | ||||||||||||
Costs Excluded by Year Incurred | |||||||||||||
As of July 31, 2013 | |||||||||||||
Property Acquisition | $ | 677,795 | |||||||||||
Exploration | 35,860 | ||||||||||||
Total | $ | 713,655 | |||||||||||
Schedule of Costs Excluded by Country | ' | ||||||||||||
Changes in Costs Excluded by Country | |||||||||||||
Namibia | United States | ||||||||||||
Balance at July 31, 2011 | $ | - | $ | - | |||||||||
Additional Cost Incurred | - | 265,639 | |||||||||||
Costs Transferred to DD&A Pool | - | - | |||||||||||
Balance at July 31, 2012 | 265,639 | ||||||||||||
Additional Costs Incurred | 713,655 | 278,090 | |||||||||||
Cost recovery | - | (132,662 | ) | ||||||||||
Costs Transferred to DD&A Pool | - | (411,067 | ) | ||||||||||
Balance at July 31, 2013 | $ | 713,655 | $ | - | |||||||||
Schedule of Standardized Measure | ' | ||||||||||||
The Standardized Measure is as follows: | |||||||||||||
2013 | 2012 | ||||||||||||
Future cash inflows | $ | 113,603,450 | $ | 200,741,090 | |||||||||
Future production costs | (55,897,070 | ) | (60,998,060 | ) | |||||||||
Future development costs | (41,794,284 | ) | (48,640,439 | ) | |||||||||
Future income tax expenses | (5,569,234 | ) | (31,885,907 | ) | |||||||||
Future net cash flows | 10,342,862 | 59,216,684 | |||||||||||
10% annual discount for estimated timing of cash flows | (3,990,069 | ) | (25,552,798 | ) | |||||||||
Future net cash flows at end of year | $ | 6,352,793 | $ | 33,663,886 | |||||||||
Schedule of Changes in Standardized Measure | ' | ||||||||||||
The following is a summary of the changes in the Standardized Measure of discounted future net cash flows for our proved oil and natural gas reserves during each of the years in the two year period ended July 31, 2013: | |||||||||||||
2013 | 2012 | ||||||||||||
Standardized measure of discounted future net cash flows at beginning of year | $ | 33,663,886 | $ | 36,116,218 | |||||||||
Net changes in prices and production costs | (37,623,010 | ) | (3,316,394 | ) | |||||||||
Changes in estimated future development costs | 4,205,045 | (10,006,008 | ) | ||||||||||
Sales of oil and gas produced, net of production costs | (2,510,339 | ) | (3,152,150 | ) | |||||||||
Discoveries and extensions | - | 54,414 | |||||||||||
Purchases of minerals in place | - | 16,662,628 | |||||||||||
Sales of minerals in place | (17 | ) | (2,042,655 | ) | |||||||||
Revisions of previous quantity estimates | (12,391,911 | ) | (6,669,453 | ) | |||||||||
Development costs incurred | 1,124,107 | 1,085,180 | |||||||||||
Change in income taxes | 14,705,973 | 1,320,486 | |||||||||||
Accretion of discount | 5,179,059 | 3,611,622 | |||||||||||
Standardized measure of discounted future net cash flows at year end | $ | 6,352,793 | $ | 33,663,886 | |||||||||
Schedule of Results of Operations for Producing Activities | ' | ||||||||||||
2013 | 2012 | ||||||||||||
Net revenues from production | $ | 7,070,540 | $ | 7,165,233 | |||||||||
Expenses | |||||||||||||
Lease operating expense | 4,560,201 | 4,013,083 | |||||||||||
Accretion | 1,056,508 | 943,508 | |||||||||||
Operating expenses | 5,616,709 | 4,956,591 | |||||||||||
Depreciation, depletion and amortization | 1,059,803 | 990,486 | |||||||||||
Total expenses | 6,676,512 | 5,947,077 | |||||||||||
Income before income tax | 394,028 | 1,218,156 | |||||||||||
Income tax expense | (137,910 | ) | (426,355 | ) | |||||||||
Results of operations | $ | 256,118 | $ | 791,801 | |||||||||
Depreciation, depletion and amortization rate per net equivalent MCFE | $ | 1.95 | $ | 1.68 | |||||||||
Description_of_Business_and_Su3
Description of Business and Summary of Significant Accounting Policies (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Revenue, Major Customer [Line Items] | ' | ' |
Other receivables, allowance for doubtful accounts | $58,585 | $1,302 |
Accumulated impairment | 373,355 | 373,355 |
Restricted cash | 6,920,739 | 6,890,000 |
Prepaid land use fees, term | '10 years | ' |
Purchase of domain name | 30,267 | ' |
Advances | $180,804 | $55,161 |
Minimum [Member] | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' |
Approximate Life | '3 years | ' |
Maximum [Member] | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' |
Approximate Life | '5 years | ' |
Purchaser One [Member] | Revenues [Member] | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' |
Risk percentage | 85.00% | 67.00% |
Purchaser One [Member] | Accounts receivable [Member] | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' |
Risk percentage | 76.00% | 79.00% |
Description_of_Business_and_Su4
Description of Business and Summary of Significant Accounting Policies (Schedule of Accumulated Other Comprehensive Loss) (Details) (USD $) | 12 Months Ended |
Jul. 31, 2013 | |
Description of Business and Summary of Significant Accounting Policies [Abstract] | ' |
Accumulated other comprehesive loss at July, 31, 2012 | ($743,082) |
Change in fair value of available-for-sale securities | 743,082 |
Accumulated other comprehesive loss at July, 31, 2013 | ' |
Acquisitions_Narrative_Details
Acquisitions (Narrative) (Details) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | |||||
Jul. 31, 2013 | Jul. 31, 2012 | Sep. 23, 2011 | Sep. 06, 2012 | Sep. 30, 2012 | Jul. 31, 2013 | Sep. 06, 2012 | Sep. 06, 2012 | |
SPE Navigation I, LLC [Member] | Namibia Exploration, Inc. [Member] | Namibia Exploration, Inc. [Member] | Namibia Exploration, Inc. [Member] | Namibia Exploration, Inc. [Member] | Namibia Exploration, Inc. [Member] | |||
acre | acre | Hydrocarb Namibia [Member] | NPC Namibia [Member] | |||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of equity interests acquired | ' | ' | 100.00% | ' | ' | ' | ' | ' |
Percentage of interest sold | ' | ' | 25.00% | ' | ' | ' | ' | ' |
Number of shares owned | ' | ' | 1,000,000 | ' | ' | ' | ' | ' |
Acquisition related costs, cash paid | ' | ' | ' | ' | $713,655 | ' | ' | ' |
Stock issued during period for acquisition, shares | ' | ' | 3,799,998 | 2,490,000 | ' | ' | ' | ' |
Stock issued during period for acquisition | 35,396,800 | 9,500,000 | ' | 3,784,800 | ' | ' | ' | ' |
Acquisition-related costs - related party | 37,234,752 | 4,367,750 | ' | 37,234,752 | ' | ' | ' | ' |
Amount of farm-in fee paid by original owners for payment of concession | ' | ' | ' | 2,400,000 | ' | ' | ' | ' |
Cost basis in working interest in oil and gas property | ' | ' | ' | 562,048 | 562,048 | ' | ' | ' |
Liabilities assumed in business acquisition | ' | ' | ' | 1,837,952 | ' | ' | ' | ' |
Ownership percentage | ' | ' | ' | 39.00% | ' | 39.00% | 51.00% | 10.00% |
Cost responsibility percentage | ' | ' | ' | 43.33% | ' | 43.33% | 56.67% | ' |
Number of acres included in oil and gas property | ' | ' | ' | 5,300,000 | ' | 530,000 | ' | ' |
Contingent shares to be issued upon achievement of milestone one | ' | ' | ' | 2,490,000 | ' | ' | ' | ' |
Total contingent shares that could be issued if all milestones are achieved | ' | ' | ' | 24,900,000 | ' | ' | ' | ' |
Contingent shares to be issued upon achievement of milestone two | ' | ' | ' | 7,470,000 | ' | ' | ' | ' |
Contingent shares to be issued upon achievement of milestone three | ' | ' | ' | 12,450,000 | ' | ' | ' | ' |
The minimum ten day volume-weighted average market capitalization to achieve milestone one | ' | ' | ' | 82,000,000 | ' | ' | ' | ' |
The minimum ten day volume-weighted average market capitalization to achieve milestone two | ' | ' | ' | 196,000,000 | ' | ' | ' | ' |
The minimum ten day volume-weighted average market capitalization to achieve milestone three | ' | ' | ' | 434,000,000 | ' | ' | ' | ' |
Total consulting fee per consulting services agreement | ' | ' | ' | 2,400,000 | ' | ' | ' | ' |
Value of the consulting fee to be paid in either cash or stock | ' | ' | ' | 800,000 | ' | ' | ' | ' |
Value of consulting fee to be paid through issuance of promissory note | ' | ' | ' | 1,600,000 | ' | ' | ' | ' |
Interest rate on promissory note to be issued as payment of consulting fee | ' | ' | ' | 5.00% | ' | ' | ' | ' |
Total principal amount due on the first anniversary of effective date | ' | ' | ' | 800,000 | ' | ' | ' | ' |
Total principal amount due on the second anniversary of effective date | ' | ' | ' | 800,000 | ' | ' | ' | ' |
Late fee percentage owed on any balance under the consulting services agreement that is outstanding greater than thirty days | ' | ' | ' | 10.00% | ' | ' | ' | ' |
Fair value of contingent equity grant | ' | ' | ' | 31,612,000 | ' | ' | ' | ' |
Fair value of assets acquired | ' | 5,132,250 | ' | ' | ' | ' | ' | ' |
Accounts payable and accrued expenses | $3,779,401 | $2,298,838 | ' | $320,000 | ' | ' | ' | ' |
Acquisitions_Schedule_of_Pro_F
Acquisitions (Schedule of Pro Forma Information) (Details) (USD $) | 12 Months Ended |
Jul. 31, 2012 | |
Business Acquisition [Line Items] | ' |
Revenues | $7,313,232 |
Loss from operations | -7,419,747 |
Net loss | ($4,776,288) |
Loss per share, basic and diluted | ($0.47) |
Available_for_Sale_Securities_
Available for Sale Securities (Details) (USD $) | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2012 | Oct. 31, 2012 | Sep. 30, 2012 | Jul. 31, 2013 | Jul. 31, 2012 | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | ' | ' |
Proceeds from sale of available for sale securities | $142,637 | ' | $145,637 | $287,874 | $4,009,548 |
Cost basis of available for sale securities sold | 198,593 | 174,000 | 607,201 | ' | 3,546,431 |
(Gain) loss on sale of available for sale securities | 55,956 | ' | 461,964 | 793,247 | -463,117 |
Impairment of available for sale securities | ' | 275,327 | ' | 275,327 | ' |
Unrealized loss reclassified from other comprehensive loss into earnings | -743,082 | ' | ' | ' | 6,383 |
Market value of available-for-sale securities | ' | ' | ' | 24,593 | 702,959 |
SPE Navigation I, LLC [Member] | ' | ' | ' | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | ' | ' |
Market value of available-for-sale securities | ' | ' | ' | ' | $3,900,000 |
Oil_and_Gas_Properties_Schedul
Oil and Gas Properties (Schedule of Oil and Gas Properties) (Details) (USD $) | Jul. 31, 2013 | Jul. 31, 2012 |
Oil and Gas Properties [Abstract] | ' | ' |
Costs subject to depletion, net of accumulated impairment of $373,355 and $373,355, respectively | $19,484,507 | $17,180,501 |
Accumulated Depletion | -2,617,478 | -1,557,675 |
Total evaluated properties | 16,867,029 | 15,622,826 |
Unevaluated properties | 713,655 | 265,639 |
Net oil and gas properties | 17,580,684 | 15,888,465 |
Accumulated impairment, oil and gas properties | ($373,355) | ($373,355) |
Oil_and_Gas_Properties_Narrati
Oil and Gas Properties (Narrative) (Details) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | ||||||||||||
Jul. 31, 2013 | Jul. 31, 2012 | Jan. 31, 2011 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jun. 30, 2012 | Apr. 30, 2012 | Aug. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Apr. 30, 2013 | Sep. 30, 2012 | Jul. 31, 2012 | Jul. 31, 2013 | Jul. 31, 2013 | Sep. 06, 2012 | Jul. 31, 2013 | Apr. 30, 2013 | Sep. 06, 2012 | Sep. 30, 2012 | Jul. 31, 2013 | |
Core [Member] | Core [Member] | Welder Lease [Member] | Palacios Lease [Member] | Chapman Prospect [Member] | Chapman Prospect [Member] | Curlee Prospect [Member] | Janssen lease [Member] | Dix prospect [Member] | Melody Prospect [Member] | Holt And Strahan Properties [Member] | Holt And Strahan Properties [Member] | Chapman, Curlee, Dix and Melody Prospects [Member] | Dix and Curlee Prospects [Member] | Galveston Bay Energy, LLC [Member] | Galveston Bay Energy, LLC [Member] | Galveston Bay Energy, LLC [Member] | Namibia Exploration, Inc. [Member] | Namibia Exploration, Inc. [Member] | Namibia Exploration, Inc. [Member] | |||
acre | acre | acre | acre | acre | acre | acre | ||||||||||||||||
Oil And Gas Properties [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisition related costs, cash paid | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $7,355 | ' | ' | ' | ' | ' | ' | ' | ' | $713,655 | ' |
Land acquisition costs | 45,147 | ' | ' | ' | ' | ' | ' | ' | 45,931 | ' | 76,938 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Geological And Geophysical Costs | 157,818 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Drilling costs | 89,783 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 210,588 | ' | ' | ' | ' | ' | ' | ' |
Development | 1,732,451 | 2,033,073 | ' | ' | ' | ' | 265,639 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Development well costs | 447,511 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 447,511 | ' | ' | ' | ' |
Recompletion development costs | 361,372 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 361,372 | ' | ' | ' | ' |
Asset retirement obligation increase | 803,788 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 803,788 | ' | ' | ' | ' |
Ownership percentage | ' | ' | ' | 10.00% | 100.00% | ' | ' | 25.00% | 50.00% | ' | ' | 12.50% | ' | 6.25% | ' | ' | 39.00% | ' | ' | 39.00% | ' | 39.00% |
Net revenue interest owned | ' | ' | ' | ' | 72.50% | 4.13% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of working interest retained | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payout of property | ' | ' | 1,350,000 | 1,350,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Working interest adjustment | ' | ' | ' | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of acres included in oil and gas property | ' | ' | ' | ' | 81 | 460 | ' | ' | 190 | ' | 366.85 | 260.12 | ' | ' | ' | ' | ' | ' | ' | 5,300,000 | ' | 530,000 |
Acquisition related costs | 713,655 | 265,639 | ' | ' | ' | ' | ' | 58,805 | ' | ' | ' | ' | ' | ' | ' | ' | 679,870 | ' | ' | ' | ' | ' |
Drilling costs | ' | ' | ' | ' | ' | ' | ' | 206,834 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from sale of working interest | ' | ' | ' | ' | ' | ' | ' | ' | 51,589 | 2,500 | 109,328 | ' | 50,000 | ' | ' | 160,917 | ' | ' | ' | ' | ' | ' |
Portion of overriding royalty interest treated as reduction of capitalized costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 32,146 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of costs to first casing point | ' | ' | ' | ' | ' | 6.71% | ' | 31.25% | 33.30% | ' | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of costs subsequent to first casing point | ' | ' | ' | ' | ' | 5.50% | ' | 25.00% | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional percentage of interest acquired | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of working interest sold | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.00% | 75.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cost responsibility percentage | ' | ' | ' | ' | ' | ' | ' | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | 43.33% | ' | ' | 43.33% | ' | 43.33% |
Cost basis in working interest in oil and gas property | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 562,048 | ' | ' | 562,048 | 562,048 | ' |
Minimum cost responsibilities during initial exploration period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,505,000 | ' | ' | ' | ' | 4,505,000 |
Minimum cost responsibilities during the first renewal exploration period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 17,350,000 | ' | ' | ' | ' | 17,350,000 |
Minimum cost responsibilities during the second renewal exploration period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 | ' | ' | ' | ' | 300,000 |
The cumulative amount expended toward costs for the initial exploration period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 800,000 | ' | ' | 900,000 |
Asset retirement obligation sold | $438 | $32,772 | ' | ' | ' | ' | ' | ' | ' | $438 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Asset_Retirement_Obligation_De
Asset Retirement Obligation (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Asset Retirement Obligation [Abstract] | ' | ' |
Liability for asset retirement obligation, beginning of period | $9,382,933 | $4,455,928 |
Asset retirement obligations assumed | ' | 2,365,530 |
Asset retirement obligations sold | -438 | -32,772 |
Asset retirement obligation incurred on properties drilled | 26,500 | 1,389 |
Accretion | 1,056,508 | 943,508 |
Revisions in estimated cash flows | 786,120 | 1,827,889 |
Costs incurred | -318,225 | -178,539 |
Liability for asset retirement obligation, end of period | 10,933,398 | 9,382,933 |
Current portion of asset retirement obligation | 724,374 | 549,796 |
Noncurrent portion of asset retirement obligation | 10,209,024 | 8,833,137 |
Total liability for asset retirement obligation | $10,933,398 | $9,382,933 |
Notes_Payable_Details
Notes Payable (Details) (USD $) | 1 Months Ended | 1 Months Ended | 1 Months Ended | 1 Months Ended | 1 Months Ended | ||||||||||
Jun. 30, 2013 | Nov. 12, 2013 | Jul. 31, 2013 | Jul. 31, 2012 | Feb. 29, 2012 | Jul. 31, 2013 | Jul. 31, 2012 | Mar. 31, 2013 | Jul. 31, 2013 | 31-May-12 | Jul. 31, 2013 | Jul. 31, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | |
Commercial Insurance Program Renewal [Member] | Commercial Insurance Program Renewal [Member] | Commercial Insurance Program Renewal [Member] | Note Payable For Commercial Insurance Program [Member] | Note Payable For Commercial Insurance Program [Member] | Notes Payable For Vehicle Purchase [Member] | Notes Payable For Vehicle Purchase [Member] | Notes Payable For Vehicle Purchase [Member] | Note Payable - Hydrocarb Corporation [Member] | Note Payable - Hydrocarb Corporation - Payment One [Member] | Note Payable - Hydrocarb Corporation - Payment Two [Member] | |||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, face amount | $300,000 | ' | ' | ' | $209,244 | ' | ' | $260,905 | ' | $18,375 | ' | ' | $1,600,000 | ' | ' |
Debt instrument, interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.93% | ' | ' | 5.00% | ' | ' |
Installment payments start date | ' | ' | ' | ' | 1-Mar-12 | ' | ' | 1-Mar-13 | ' | 1-Jun-12 | ' | ' | ' | 7-Aug-13 | 7-Aug-14 |
Current portion of notes payable | ' | ' | 1,059,644 | 102,025 | ' | 0 | 96,252 | ' | 115,958 | ' | 11,678 | 17,451 | ' | 800,000 | 800,000 |
Principal balance | ' | 250,000 | 275,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Periodic installments amount | 12,500 | ' | ' | ' | 24,578 | ' | ' | 29,591 | ' | 567 | ' | ' | ' | ' | ' |
Number of required periodic payments | 24 | ' | ' | ' | 9 | ' | ' | 9 | ' | 36 | ' | ' | ' | ' | ' |
Year ending: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2014 | ' | ' | 1,059,644 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2015 | ' | ' | 942,992 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total | ' | ' | $2,002,636 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notes_Payable_Line_of_Credit_D
Notes Payable (Line of Credit) (Details) (USD $) | 1 Months Ended | ||
Mar. 17, 2011 | Jul. 31, 2013 | Jul. 31, 2012 | |
Line of Credit Facility [Line Items] | ' | ' | ' |
Line of credit, amount outstanding | $300,000 | $0 | $300,000 |
Line of credit, interest rate spread over prime rate | 1.00% | ' | ' |
Debt instrument, minimum interest rate | 5.00% | ' | ' |
Line of credit, interest rate | 6.00% | ' | ' |
Revolving credit facility, expiration date | 22-Jun-15 | ' | ' |
Fair_Value_Narrative_Details
Fair Value (Narrative) (Details) | 1 Months Ended | ||
Oct. 31, 2009 | Nov. 13, 2012 | Oct. 15, 2012 | |
Fair Value [Abstract] | ' | ' | ' |
Discount to market price | 65.00% | ' | ' |
Number of warrants expired | ' | 206,400 | 408,065 |
Fair_Value_Schedule_of_Assets_
Fair Value (Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) (Recurring [Member], USD $) | Jul. 31, 2012 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' |
Available for sale securities | $313,446 |
Derivative warrant liability | 1,325,388 |
Level 1 [Member] | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' |
Available for sale securities | 313,446 |
Derivative warrant liability | ' |
Level 2 [Member] | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' |
Available for sale securities | ' |
Derivative warrant liability | ' |
Level 3 [Member] | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' |
Available for sale securities | ' |
Derivative warrant liability | $1,325,388 |
Fair_Value_Schedule_of_the_Cha
Fair Value (Schedule of the Change in Fair Value of the Derivative Warrant Liability) (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Fair Value [Abstract] | ' | ' |
Beginning balance | $1,325,388 | $2,543,223 |
Expiration of derivative warrant feature | -269,164 | ' |
Unrealized gain on changes in fair value of derivative liability | -1,056,224 | -1,217,835 |
Ending balance | ' | $1,325,388 |
Capital_Stock_Stock_Issued_for
Capital Stock (Stock Issued for Services and Investor Relations) (Details) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 1 Months Ended | ||||
Apr. 04, 2012 | Dec. 31, 2011 | Apr. 30, 2012 | Jul. 31, 2013 | Jul. 31, 2012 | 16-May-12 | Sep. 06, 2012 | Jul. 31, 2013 | Jul. 31, 2012 | Jul. 31, 2011 | Aug. 31, 2011 | |
Namibia Exploration, Inc. [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Investors Group [Member] | |||||||
Stock Issued During Period [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock for services | ' | $27,703 | ' | ' | $620,155 | ' | ' | ' | $200 | ' | ' |
Issuance of common stock for services, shares | ' | 13,036 | ' | ' | ' | ' | ' | ' | 200,189 | ' | 189,585 |
Investor relations expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 592,452 |
Shares cancelled | ' | ' | 2,431 | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisition | ' | ' | ' | 35,396,800 | 9,500,000 | ' | 3,784,800 | 2,490 | 3,800 | ' | ' |
Acquisition, shares | ' | ' | ' | ' | ' | ' | 2,490,000 | 2,490,000 | 3,799,998 | ' | ' |
Fair value of contingent equity grant | ' | ' | ' | ' | ' | ' | $31,612,000 | ' | ' | ' | ' |
Common stock, shares authorized | ' | ' | ' | 500,000,000 | 500,000,000 | 20,000,000 | ' | ' | ' | ' | ' |
Common stock, par value per share | ' | ' | ' | $0.00 | $0.00 | $0.00 | ' | ' | ' | ' | ' |
Stock split conversion ratio | 25 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares issued | ' | ' | ' | 13,281,003 | 10,791,003 | 269,742,986 | ' | ' | ' | ' | ' |
Common stock, shares outstanding | ' | ' | ' | 13,281,003 | 10,791,003 | 269,742,986 | ' | 13,281,003 | 10,791,003 | 6,790,816 | ' |
Capital_Stock_Stock_Compensati
Capital Stock (Stock Compensation Plans) (Details) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Risk-free interest rate, minimum | 1.11% | 0.12% |
Risk-free interest rate, maximum | 2.00% | 1.66% |
Dividend yield | 0.00% | 0.00% |
Volatility factor, minimum | 140.30% | 135.00% |
Volatility factor, maximum | 144.00% | 148.00% |
Expected life | '6 years 6 months | ' |
Minimum [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Expected life | ' | '1 year |
Maximum [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Expected life | ' | '6 years 6 months |
2013 Stock Incentive Plan [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Shares authorized for issuance | 2,650,000 | ' |
Expected life | '4 years 6 months | ' |
Capital_Stock_Options_Granted_
Capital Stock (Options Granted to Non-employees and Employees) (Details) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | |||||
Jul. 31, 2013 | Jul. 31, 2012 | Feb. 28, 2013 | Jul. 31, 2013 | Jul. 31, 2012 | Jul. 31, 2011 | Jul. 31, 2013 | Jul. 31, 2012 | |
Director [Member] | Employee [Member] | Employee [Member] | Employee [Member] | Non-employee [Member] | Non-employee [Member] | |||
Share Based Arrangements With Employees And Nonemployees [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Share Based Arrangements Aggregate Number Of Options Granted | ' | ' | 600,000 | ' | ' | 260,000 | ' | ' |
Number of options granted | 600,000 | ' | ' | ' | ' | ' | 600,000 | ' |
Compensation expense recognized | $933,126 | $687,770 | ' | $253,952 | $263,201 | ' | $679,174 | $424,569 |
Weighted average exercise price of options granted | $2.20 | ' | $2.20 | ' | ' | $2.50 | $2.20 | ' |
Unrecognized compensation cost related to stock options | ' | ' | ' | 56,917 | ' | ' | 1,011,847 | ' |
Vesting period | ' | ' | '10 years | ' | ' | '10 years | ' | ' |
Fair value of options granted | ' | ' | $1,196,589 | ' | ' | ' | ' | ' |
Expected term | '6 years 6 months | ' | ' | ' | ' | ' | ' | ' |
Capital_Stock_Summary_of_Stock
Capital Stock (Summary of Stock Options Issued and Outstanding) (Details) (USD $) | 12 Months Ended | ||
Jul. 31, 2013 | Jul. 31, 2012 | Jul. 31, 2011 | |
Options | ' | ' | ' |
Outstanding, beginning balance | 1,044,000 | 1,101,200 | ' |
Granted | 600,000 | ' | ' |
Exercised | ' | ' | ' |
Expired | -108,000 | -57,200 | ' |
Outstanding, ending balance | 1,536,000 | 1,044,000 | 1,101,200 |
Exercisable, ending balance | 776,800 | 564,000 | ' |
Weighted Average Share Price | ' | ' | ' |
Outstanding, beginning balance | $2.50 | $2.50 | ' |
Granted | $2.20 | ' | ' |
Exercised | ' | ' | ' |
Expired | $2.50 | $2.50 | ' |
Outstanding, ending balance | $2.38 | $2.50 | $2.50 |
Exercisable, ending balance | $2.50 | ' | ' |
Aggregate intrinsic value | ' | ' | $1,101,200 |
Weighted average remaining contractual life | '7 years 11 months 23 days | '7 years 2 months 19 days | '8 years 1 month 21 days |
Weighted average remaining contractual life exercisable | '6 years 9 months 26 days | ' | ' |
Capital_Stock_Options_Outstand
Capital Stock (Options Outstanding and Exercisable) (Details) (USD $) | 12 Months Ended | ||
Jul. 31, 2013 | Jul. 31, 2012 | Jul. 31, 2011 | |
Options Outstanding and Exercisable [Line Items] | ' | ' | ' |
Outstanding Number of Shares | 1,536,000 | 1,044,000 | 1,101,200 |
Term of options granted | '7 years 11 months 23 days | '7 years 2 months 19 days | '8 years 1 month 21 days |
Exercisable Number of Shares | 776,800 | 564,000 | ' |
Options One [Member] | ' | ' | ' |
Options Outstanding and Exercisable [Line Items] | ' | ' | ' |
Exercise price | 2.2 | 2.5 | ' |
Outstanding Number of Shares | 600,000 | 800,000 | ' |
Term of options granted | '9 years 6 months 15 days | '8 years 8 months 19 days | ' |
Exercisable Number of Shares | ' | 320,000 | ' |
Options Two [Member] | ' | ' | ' |
Options Outstanding and Exercisable [Line Items] | ' | ' | ' |
Exercise price | 2.5 | 2.5 | ' |
Outstanding Number of Shares | 796,000 | 24,000 | ' |
Term of options granted | '7 years 8 months 23 days | '6 years 9 months 22 days | ' |
Exercisable Number of Shares | 636,800 | 24,000 | ' |
Options Three [Member] | ' | ' | ' |
Options Outstanding and Exercisable [Line Items] | ' | ' | ' |
Exercise price | 2.5 | 2.5 | ' |
Outstanding Number of Shares | 60,000 | 60,000 | ' |
Term of options granted | '3 years 11 months 5 days | '4 years 11 months 5 days | ' |
Exercisable Number of Shares | 60,000 | 60,000 | ' |
Options Four [Member] | ' | ' | ' |
Options Outstanding and Exercisable [Line Items] | ' | ' | ' |
Exercise price | 2.5 | 2.5 | ' |
Outstanding Number of Shares | 24,000 | 56,000 | ' |
Term of options granted | '5 years 9 months 22 days | '1 year 15 days | ' |
Exercisable Number of Shares | 24,000 | 56,000 | ' |
Options Five [Member] | ' | ' | ' |
Options Outstanding and Exercisable [Line Items] | ' | ' | ' |
Exercise price | 2.5 | 2.5 | ' |
Outstanding Number of Shares | 56,000 | 104,000 | ' |
Term of options granted | '1 year | '1 year | ' |
Exercisable Number of Shares | 56,000 | 104,000 | ' |
Capital_Stock_Schedule_of_Nonv
Capital Stock (Schedule of Nonvested Share Activity) (Details) (USD $) | 12 Months Ended |
Jul. 31, 2013 | |
Number of shares | ' |
Nonvested at July 31, 2012 | 480,000 |
Granted | 600,000 |
Vested | -319,200 |
Forfeited | -1,600 |
Nonvested at July 31, 2013 | 759,200 |
Weighted average grant date fair value | ' |
Nonvested at July 31, 2012 | $2.47 |
Granted | $1.99 |
Vested | $2.47 |
Forfeited | $2.47 |
Nonvested at July 31, 2013 | $2.09 |
Capital_Stock_Warrants_Granted
Capital Stock (Warrants Granted to Related Party) (Details) (USD $) | 12 Months Ended | ||
Jul. 31, 2013 | Jul. 31, 2012 | Jul. 31, 2011 | |
Warrants Granted To Related Party [Line Items] | ' | ' | ' |
Total shares of common stock issuable under warrants | 3,710,877 | 3,756,455 | 3,758,455 |
Exercise Price | 2.5 | 2.58 | 2.5 |
Compensation expense recognized | $933,126 | $687,770 | ' |
Warrant B [Member] | ' | ' | ' |
Warrants Granted To Related Party [Line Items] | ' | ' | ' |
Exercise Price | 2.5 | ' | ' |
Term of warrants | '2 years 29 days | ' | ' |
Average closing stock price that will trigger issuance of additional warrants | $7.50 | ' | ' |
Fair value of warrants | 266,017 | 177,150 | ' |
Number of warrants issued | 600,000 | ' | ' |
Warrant C [Member] | ' | ' | ' |
Warrants Granted To Related Party [Line Items] | ' | ' | ' |
Exercise Price | 2.5 | ' | ' |
Term of warrants | '2 years 5 months 27 days | ' | ' |
Average closing stock price that will trigger issuance of additional warrants | $15 | ' | ' |
Fair value of warrants | 202,127 | 139,491 | ' |
Number of warrants issued | 600,000 | ' | ' |
Geoserve Marketing, LLC [Member] | ' | ' | ' |
Warrants Granted To Related Party [Line Items] | ' | ' | ' |
Exercise Price | ' | ' | 2.5 |
Compensation expense recognized | $196,384 | $189,372 | ' |
Capital_Stock_Summary_of_Warra
Capital Stock (Summary of Warrants Issued and Outstanding) (Details) (USD $) | 12 Months Ended | ||
Jul. 31, 2013 | Jul. 31, 2012 | Jul. 31, 2011 | |
Warrants | ' | ' | ' |
Outstanding, beginning balance | 3,756,455 | 3,758,455 | ' |
Granted | ' | ' | ' |
Exercised | ' | ' | ' |
Expired | -45,578 | -2,000 | ' |
Outstanding, ending balance | 3,710,877 | 3,756,455 | 3,758,455 |
Weighted Average Share Price | ' | ' | ' |
Outstanding, beginning balance | 2.58 | 2.5 | ' |
Granted | ' | ' | ' |
Exercised | ' | ' | ' |
Expired | $9.34 | $25 | ' |
Outstanding, ending balance | 2.5 | 2.58 | 2.5 |
Aggregate intrinsic value | ' | ' | $3,710,880 |
Weighted average remaining contractual life | '1 year 10 months 13 days | '2 years 9 months 29 days | '3 years 9 months 29 days |
Capital_Stock_Warrants_Outstan
Capital Stock (Warrants Outstanding and Exercisable) (Details) | 12 Months Ended | ||
Jul. 31, 2013 | Jul. 31, 2012 | Jul. 31, 2011 | |
Warrants Outstanding And Exercisable [Line Items] | ' | ' | ' |
Exercise Price | 2.5 | 2.58 | 2.5 |
Outstanding Number of Shares | 3,710,877 | 3,756,455 | ' |
Remaining Life | '1 year 10 months 13 days | '2 years 9 months 29 days | '3 years 9 months 29 days |
Exercisable Number of Shares | 2,510,877 | 2,556,455 | ' |
Warrants One [Member] | ' | ' | ' |
Warrants Outstanding And Exercisable [Line Items] | ' | ' | ' |
Exercise Price | 2.5 | 2.5 | ' |
Outstanding Number of Shares | 2,000,000 | 2,000,000 | ' |
Remaining Life | '3 years | '3 years 6 months 18 days | ' |
Exercisable Number of Shares | 800,000 | 800,000 | ' |
Warrants Two [Member] | ' | ' | ' |
Warrants Outstanding And Exercisable [Line Items] | ' | ' | ' |
Exercise Price | 2.5 | 2.5 | ' |
Outstanding Number of Shares | 1,253,757 | 1,253,757 | ' |
Remaining Life | '2 years | '2 years 2 months 16 days | ' |
Exercisable Number of Shares | 1,253,757 | 1,253,757 | ' |
Warrants Three [Member] | ' | ' | ' |
Warrants Outstanding And Exercisable [Line Items] | ' | ' | ' |
Exercise Price | 2.5 | 2.5 | ' |
Outstanding Number of Shares | 457,120 | 400,000 | ' |
Remaining Life | '1 year | '1 year 8 months 1 day | ' |
Exercisable Number of Shares | 457,120 | 400,000 | ' |
Warrants Four [Member] | ' | ' | ' |
Warrants Outstanding And Exercisable [Line Items] | ' | ' | ' |
Exercise Price | ' | 2.5 | ' |
Outstanding Number of Shares | ' | 5,120 | ' |
Remaining Life | ' | '1 year 6 months 26 days | ' |
Exercisable Number of Shares | ' | 5,120 | ' |
Warrants Five [Member] | ' | ' | ' |
Warrants Outstanding And Exercisable [Line Items] | ' | ' | ' |
Exercise Price | ' | 2.5 | ' |
Outstanding Number of Shares | ' | 52,000 | ' |
Remaining Life | ' | '1 year 6 months 18 days | ' |
Exercisable Number of Shares | ' | 52,000 | ' |
Warrants Six [Member] | ' | ' | ' |
Warrants Outstanding And Exercisable [Line Items] | ' | ' | ' |
Exercise Price | ' | 6.25 | ' |
Outstanding Number of Shares | ' | 8,000 | ' |
Remaining Life | ' | '1 year | ' |
Exercisable Number of Shares | ' | 8,000 | ' |
Warrants Seven [Member] | ' | ' | ' |
Warrants Outstanding And Exercisable [Line Items] | ' | ' | ' |
Exercise Price | ' | 10 | ' |
Outstanding Number of Shares | ' | 37,578 | ' |
Remaining Life | ' | '1 year | ' |
Exercisable Number of Shares | ' | 37,578 | ' |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | ||||||
Jul. 31, 2013 | Jul. 31, 2012 | Jul. 31, 2013 | Jul. 31, 2012 | Nov. 30, 2011 | Oct. 31, 2011 | Jul. 31, 2013 | Jul. 31, 2012 | Sep. 06, 2012 | Feb. 28, 2013 | |
Father Of Chief Financial Officer [Member] | Father Of Chief Financial Officer [Member] | Director [Member] | Officer And Director [Member] | Father-In-Law of Chief Executive Officer [Member] | Father-In-Law of Chief Executive Officer [Member] | Galveston Bay Energy, LLC [Member] | Carter E&P [Member] | |||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue generated from Barge Canal properties | $643,203 | $569,476 | ' | ' | ' | ' | ' | ' | ' | ' |
Lease operating costs incurred from Barge Canal properties | 224,047 | 181,113 | ' | ' | ' | ' | ' | ' | ' | ' |
Overhead costs incurred | 28,038 | 25,087 | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding accounts receivable at period end | 91,967 | 74,972 | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding accounts payable at year end | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding billed and unbilled joint interest billings owed by related party | ' | ' | 84,806 | 42,646 | ' | ' | ' | ' | ' | ' |
Due to related parties | 15,046 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expense recognized from consulting contract with related party | ' | ' | ' | ' | ' | ' | 196,384 | 189,372 | ' | ' |
Total contingent shares that could be issued if all milestones are achieved | ' | ' | ' | ' | ' | ' | ' | ' | 24,900,000 | ' |
Percentage of working interest sold | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.00% |
Land acquisition costs | 45,147 | ' | ' | ' | ' | ' | ' | ' | ' | 1,541 |
Repayments of related party debt | ' | ' | ' | ' | 6,423 | 8,300 | ' | ' | ' | ' |
Repayments of accrued interest on related party debt | ' | ' | ' | ' | $416 | $413 | ' | ' | ' | ' |
Income_Taxes_Narrative_Details
Income Taxes (Narrative) (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Income Taxes [Abstract] | ' | ' |
Net loss before income taxes | ($40,598,044) | ($5,700,195) |
Net operating loss carry forwards | 10,607,549 | ' |
Beginning year of expiration of operating loss carry forwards | 1-Jan-27 | ' |
Minimum ownership percentage in the company to be considered party to potential ownership change. | 5.00% | ' |
Aggregate ownership percentage threshold that would trigger an ownership change event. | 50.00% | ' |
Federal long-term tax-exempt interest rate | 4.47% | ' |
Net operating loss carry-forwards, annual limitation | $239,600 | ' |
Income_Taxes_Reconciliation_of
Income Taxes (Reconciliation of Income Tax Provision at the Statutory Rate) (Details) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Income Taxes [Abstract] | ' | ' |
US statutory federal rate | 35.00% | 35.00% |
State income tax rate | 0.58% | 0.58% |
Equity-based compensation | -33.62% | -36.43% |
Gain on derivative warrants | 0.93% | 7.60% |
Gain on sale of securities | -0.33% | -21.15% |
Other | -0.50% | 4.02% |
Acquired deferred tax liability | ' | 23.12% |
Net operating loss | -1.75% | 6.92% |
Effective income tax rate | 0.31% | 19.66% |
Income_Taxes_Schedule_of_Defer
Income Taxes (Schedule of Deferred Tax Assets) (Details) (USD $) | Jul. 31, 2013 | Jul. 31, 2012 |
Income Taxes [Abstract] | ' | ' |
Stock based compensation | $713,867 | $292,509 |
Property, including depreciable property | -2,980,005 | -2,070,809 |
Asset retirement obligation | 3,942,918 | 3,312,358 |
Net operating loss carry-forward | 3,846,783 | 2,530,532 |
Other | 42,368 | 318,032 |
Deferred tax assets, gross | 5,565,931 | 4,382,622 |
Valuation allowance for deferred tax assets | -5,565,931 | -4,382,622 |
Deferred tax assets, net | ' | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies (Narrative) (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Commitments And Contingencies [Line Items] | ' | ' |
Rent expense | $127,867 | $117,392 |
Monthly compression and handling fees | 1,000 | ' |
Houston, Texas Office [Member] | ' | ' |
Commitments And Contingencies [Line Items] | ' | ' |
Monthly rental payments | 6,406 | ' |
Monthly rental payments, year two | 6,673 | ' |
Monthly rental payments, year three | 6,940 | ' |
Operating lease, term of lease | '3 years | ' |
Operating lease, term of lease extension | '3 years | ' |
Minimum [Member] | ' | ' |
Commitments And Contingencies [Line Items] | ' | ' |
Loss contengency, estimate | 150,000 | ' |
Maximum [Member] | ' | ' |
Commitments And Contingencies [Line Items] | ' | ' |
Loss contengency, estimate | $900,000 | ' |
Commitments_and_Contingencies_2
Commitments and Contingencies (Schedule of Future Payments of Operating Leases and Debt) (Details) (USD $) | Jul. 31, 2013 |
Commitments And Contingencies [Line Items] | ' |
Operating leases, 2014 | $71,047 |
Operating leases, 2015 | ' |
Operating leases, 2016 | ' |
Operating leases, Total | 71,047 |
2014 | 1,059,644 |
2015 | 942,992 |
Total | 2,002,636 |
Total, 2014 | 1,206,089 |
Total, 2015 | 967,295 |
Total, 2016 | ' |
Total Long-term debt and Operating leases | 2,173,384 |
Notes Payable [Member] | ' |
Commitments And Contingencies [Line Items] | ' |
2014 | 1,135,042 |
2015 | 967,295 |
2016 | ' |
Total | $2,102,337 |
Commitments_and_Contingencies_3
Commitments and Contingencies (Letter of Credit) (Details) (USD $) | 12 Months Ended | 1 Months Ended | |||
Jul. 31, 2013 | Jun. 30, 2013 | Apr. 30, 2013 | Apr. 30, 2013 | Apr. 30, 2013 | |
Letter of Credit One [Member] | Letter of Credit Two [Member] | Accounts payable and accrued expenses [Member] | |||
Commitments And Contingencies [Line Items] | ' | ' | ' | ' | ' |
Environmental remediation expense | ' | ' | ' | ' | $150,000 |
Monthly compression and handling fees | 1,000 | ' | ' | ' | ' |
Debt instrument, face amount | ' | $300,000 | $6,610,000 | $180,000 | ' |
Debt instrument, fee percentage | ' | ' | 1.50% | 1.50% | ' |
Commitments_and_Contingencies_4
Commitments and Contingencies (Schedule of Prepaid Balances) (Details) (USD $) | Jul. 31, 2013 | Jul. 31, 2012 |
Commitments and Contingencies [Abstract] | ' | ' |
Prepaid letter of credit fees | $101,850 | $25,163 |
Amortization | -8,488 | -8,596 |
Net prepaid letter of credit fees | $93,362 | $16,567 |
Additional_Financial_Statement2
Additional Financial Statement Information (Schedule of Other Current Assets) (Details) (USD $) | Jul. 31, 2013 | Jul. 31, 2012 |
Additional Financial Statement Information [Abstract] | ' | ' |
Prepaid letter of credit fees | $93,362 | $16,567 |
Prepaid insurance | 180,433 | 178,471 |
Other prepaid expenses | 2,000 | 10,164 |
Cash call paid to operator | 24,225 | 23,234 |
Prepaid land use fees | 28,728 | 19,852 |
Accrued interest income | 4,388 | 8,389 |
Total other current assets | 333,136 | 256,677 |
Other receivables, allowance for doubtful accounts | $58,585 | $1,302 |
Additional_Financial_Statement3
Additional Financial Statement Information (Schedule of Property and Equipment) (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Property, Plant and Equipment [Line Items] | ' | ' |
Total property and equipment | $82,541 | $82,541 |
Less accumulated depreciation | -62,749 | -36,572 |
Net book value | 19,792 | 45,969 |
Depreciation expense | 26,177 | 31,495 |
Furniture and Fixtures [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Approximate Life | '5 years | ' |
Total property and equipment | 7,604 | 7,604 |
Marine vessels [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Approximate Life | '5 years | ' |
Total property and equipment | 17,614 | 17,614 |
Vehicles [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Approximate Life | '5 years | ' |
Total property and equipment | 18,027 | 18,027 |
Computer equipment and software [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Approximate Life | '2 years | ' |
Total property and equipment | $39,296 | $39,296 |
Additional_Financial_Statement4
Additional Financial Statement Information (Schedule of Accounts Payable and Accrued Expenses) (Details) (USD $) | Jul. 31, 2013 | Jul. 31, 2012 |
Additional Financial Statement Information [Abstract] | ' | ' |
Trade payables | $3,068,671 | $1,950,768 |
Accrued payroll | 151,577 | 40,000 |
Accrued interest and fees | 398,966 | ' |
Revenue payable | 4,717 | 6,690 |
Local taxes and royalty payable | 128,470 | 108,948 |
Federal and state income taxes payable | 27,000 | 192,432 |
Total accounts payable and accrued expenses | $3,779,401 | $2,298,838 |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 1 Months Ended | 12 Months Ended | 1 Months Ended | |||
Dec. 31, 2011 | Jul. 31, 2013 | Jul. 31, 2012 | Oct. 31, 2013 | Aug. 31, 2013 | Oct. 31, 2013 | |
Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | ||||
Namibia Exploration, Inc. [Member] | ||||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' |
Expected life | ' | '6 years 6 months | ' | '6 years 6 months | '6 years 6 months | ' |
Risk free interest rate | ' | ' | ' | 2.09% | 2.01% | ' |
Dividend yield | ' | 0.00% | 0.00% | 0.00% | 0.00% | ' |
Volitility factor | ' | ' | ' | 117.31% | 144.01% | ' |
Vested | ' | ' | ' | 480,000 | 120,000 | ' |
Number of options granted | ' | 600,000 | ' | ' | 600,000 | ' |
Fair value of options vested | ' | ' | ' | $851,096 | $16,184 | ' |
Services, shares | 13,036 | ' | ' | ' | ' | 1,859,879 |
Services | 27,703 | ' | 620,155 | ' | ' | 2,400,000 |
Joint interest billings payable | ' | ' | ' | ' | ' | 635,937 |
Interest and late fees | ' | ' | ' | ' | ' | $553,640 |
Supplemental_Oil_and_Gas_Infor2
Supplemental Oil and Gas Information (Unaudited) (Narrative) (Details) | Jul. 31, 2013 | Jul. 31, 2012 |
Supplemental Oil And Gas Infomation Unaudited [Abstract] | ' | ' |
Average oil and gas price per barrel | 92.52 | 95.07 |
Average gas price per MMbtu | 3.51 | 3.02 |
Supplemental_Oil_and_Gas_Infor3
Supplemental Oil and Gas Information (Unaudited) (Schedule of Net Proved Reserves) (Details) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
gal | gal | |
Reserve Quantities [Line Items] | ' | ' |
Beginning Balance | 23,067,460 | 19,874,790 |
Revisions of previous estimates | -5,834,587 | -1,936,599 |
New discoveries and extensions | ' | 15,800 |
Purchase of reserves in place | ' | 6,406,780 |
Sale of reserves in place | -8 | -704,290 |
Production | -544,275 | -589,021 |
Ending Balance | 16,688,590 | 23,067,460 |
Proved developed producing | 3,092,160 | 3,636,850 |
Proved developed non-producing | 6,376,700 | 6,155,140 |
Proved undeveloped | 7,219,730 | 13,275,470 |
Total Proved reserves | 16,688,590 | 23,067,460 |
Oil [Member] | ' | ' |
Reserve Quantities [Line Items] | ' | ' |
Beginning Balance | 1,388,250 | 1,218,950 |
Revisions of previous estimates | -667,307 | -88,689 |
New discoveries and extensions | ' | 660 |
Purchase of reserves in place | ' | 383,070 |
Sale of reserves in place | -1 | -64,730 |
Production | -61,242 | -61,011 |
Ending Balance | 659,700 | 1,388,250 |
Proved developed producing | 256,290 | 308,640 |
Proved developed non-producing | 229,290 | 321,510 |
Proved undeveloped | 174,120 | 758,100 |
Total Proved reserves | 659,700 | 1,388,250 |
Gas [Member] | ' | ' |
Reserve Quantities [Line Items] | ' | ' |
Beginning Balance | 14,737,960 | 12,561,090 |
Revisions of previous estimates | -1,830,745 | -1,404,465 |
New discoveries and extensions | ' | 11,840 |
Purchase of reserves in place | ' | 4,180,360 |
Sale of reserves in place | -2 | -315,910 |
Production | -176,823 | -222,955 |
Ending Balance | 12,730,390 | 14,737,960 |
Proved developed producing | 1,554,420 | 1,785,010 |
Proved developed non-producing | 500,960 | 4,266,080 |
Proved undeveloped | 6,175,010 | 8,726,870 |
Total Proved reserves | 12,730,390 | 14,737,960 |
Supplemental_Oil_and_Gas_Infor4
Supplemental Oil and Gas Information (Unaudited) (Schedule of Capitalized Costs) (Details) (USD $) | Jul. 31, 2013 | Jul. 31, 2012 |
Supplemental Oil And Gas Infomation Unaudited [Abstract] | ' | ' |
Unevaluated properties | $713,655 | $265,639 |
Evaluated properties | 19,857,842 | 17,553,836 |
Less impairment | -373,355 | -373,355 |
Gross capitalized costs | 20,198,162 | 17,446,140 |
Less depreciation, depletion and amortization | -2,617,478 | -1,557,675 |
Net oil and gas properties | $17,580,684 | $15,888,465 |
Supplemental_Oil_and_Gas_Infor5
Supplemental Oil and Gas Information (Unaudited) (Schedule of Costs Incurred) (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Property acquisition | ' | ' |
Unproved | $808,307 | $74,805 |
Proved | 3,000 | 6,988,447 |
Exploration | 404,265 | 420,200 |
Development | 1,732,451 | 2,033,073 |
Cost recovery | -196,001 | -32,772 |
Total costs incurred | 2,752,022 | 9,483,753 |
Namibia [Member] | ' | ' |
Property acquisition | ' | ' |
Unproved | 677,795 | ' |
Proved | ' | ' |
Exploration | 35,860 | ' |
Development | ' | ' |
Cost recovery | ' | ' |
Total costs incurred | 713,655 | ' |
Unites States [Member] | ' | ' |
Property acquisition | ' | ' |
Unproved | 130,512 | ' |
Proved | 3,000 | ' |
Exploration | 368,405 | ' |
Development | 1,732,451 | ' |
Cost recovery | -196,001 | ' |
Total costs incurred | $2,038,367 | ' |
Supplemental_Oil_and_Gas_Infor6
Supplemental Oil and Gas Information (Unaudited) (Schedule of Costs Excluded by Year) (Details) (USD $) | Jul. 31, 2013 | Jul. 31, 2012 |
Supplemental Oil And Gas Infomation Unaudited [Abstract] | ' | ' |
Property Acquisition | $677,795 | ' |
Exploration | 35,860 | ' |
Total | $713,655 | $265,639 |
Supplemental_Oil_and_Gas_Infor7
Supplemental Oil and Gas Information (Unaudited) (Schedule of Costs Excluded by Country) (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items] | ' | ' |
Ending Balance | $713,655 | $265,639 |
Namibia [Member] | ' | ' |
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items] | ' | ' |
Beginning Balance | ' | ' |
Additional Cost Incurred | 713,655 | ' |
Cost Recovery | ' | ' |
Costs Transferred to DD&A Pool | ' | ' |
Ending Balance | 713,655 | ' |
Unites States [Member] | ' | ' |
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items] | ' | ' |
Beginning Balance | 265,639 | ' |
Additional Cost Incurred | 278,090 | 265,639 |
Cost Recovery | -132,662 | ' |
Costs Transferred to DD&A Pool | -411,067 | ' |
Ending Balance | ' | $265,639 |
Supplemental_Oil_and_Gas_Infor8
Supplemental Oil and Gas Information (Unaudited) (Schedule of Standardized Measure) (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Supplemental Oil And Gas Infomation Unaudited [Abstract] | ' | ' |
Future cash inflows | $113,603,450 | $200,741,090 |
Future production costs | -55,897,070 | -60,998,060 |
Future development costs | -41,794,284 | -48,640,439 |
Future income tax expenses | -5,569,234 | -31,885,907 |
Future net cash flows | 10,342,862 | 59,216,684 |
10% annual discount for estimated timing of cash flows | -3,990,069 | -25,552,798 |
Future net cash flows at end of year | $6,352,793 | $33,663,886 |
Supplemental_Oil_and_Gas_Infor9
Supplemental Oil and Gas Information (Unaudited) (Schedule of Changes in Standardized Measure) (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Supplemental Oil And Gas Infomation Unaudited [Abstract] | ' | ' |
Standardized measure of discounted future net cash flows at beginning of year | $33,663,886 | $36,116,218 |
Net changes in prices and production costs | -37,550,412 | -3,316,394 |
Changes in estimated future development costs | 4,205,045 | -10,006,008 |
Sales of oil and gas produced, net of production costs | -2,582,937 | -3,152,150 |
Discoveries and extensions | ' | 54,414 |
Purchases of minerals in place | ' | 16,662,628 |
Sales of minerals in place | -17 | -2,042,655 |
Revisions of previous quantity estimates | -12,391,911 | -6,669,453 |
Development costs incurred | 1,124,107 | 1,085,180 |
Change in income taxes | 14,705,973 | 1,320,486 |
Accretion of discount | 5,179,059 | 3,611,622 |
Standardized measure of discounted future net cash flows at year end | $6,352,793 | $33,663,886 |
Recovered_Sheet1
Supplemental Oil and Gas Information (Unaudited) (Schedule of Results of Operations for Producing Activities) (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Supplemental Oil And Gas Infomation Unaudited [Abstract] | ' | ' |
Net revenues from production | $7,070,540 | $7,165,233 |
Expenses | ' | ' |
Lease operating expense | 4,560,201 | 4,013,083 |
Accretion | 1,056,508 | 943,508 |
Operating expenses | 5,544,111 | 4,956,591 |
Depreciation, depletion, and amortization | 1,059,803 | 990,486 |
Total expenses | 6,603,914 | 5,947,077 |
Income before income tax | 466,626 | 1,218,156 |
Income tax expenses | -163,319 | -426,355 |
Results of operations | $303,307 | $791,801 |
Depreciation, depletion and amortization rate per net equivalent MCFE | 1.95 | 1.68 |