Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Jul. 31, 2014 | Oct. 22, 2014 | Jan. 31, 2014 | |
Document and Entity Information [Abstract] | ' | ' | ' |
Entity Registrant Name | 'HYDROCARB ENERGY CORP | ' | ' |
Entity Central Index Key | '0001425808 | ' | ' |
Current Fiscal Year End Date | '--07-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Public Float | ' | ' | $22,570,168 |
Entity Common Stock, Shares Outstanding | ' | 21,186,602 | ' |
Document Fiscal Year Focus | '2014 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Document Type | '10-K | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 31-Jul-14 | ' | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Jul. 31, 2014 | Jul. 31, 2013 |
Current assets: | ' | ' |
Cash and cash equivalents | $144,258 | $354,829 |
Oil and gas revenues receivable | 372,120 | 725,691 |
Accounts receivable - related party | 58,014 | 201,284 |
Other current assets | 446,320 | 345,942 |
Other receivables, net | 38,455 | 312,997 |
Total current assets | 1,059,167 | 1,940,743 |
Oil and Gas Property, accounted for using the full cost method of accounting | ' | ' |
Evaluated property, net of accumulated depletion of $3,491,420 and $2,617,478, respectively; and accumulated impairment of $373,335 and $373,335, respectively | 15,288,370 | 16,867,029 |
Unevaluated property | 2,119,769 | 1,124,805 |
Restricted cash | 6,877,944 | 6,920,739 |
Other assets | 219,942 | 180,726 |
Property and equipment, net of accumulated depreciation of $135,590 and $116,945, respectively | 166,963 | 58,053 |
TOTAL ASSETS | 25,732,155 | 27,092,095 |
Current liabilities: | ' | ' |
Accounts payable and accrued expenses | 2,795,675 | 2,816,084 |
Current portion of notes payable | 334,688 | 259,644 |
Asset retirement obligations - short term | 1,133,690 | 724,374 |
Advances | 195,904 | 180,804 |
Due to related parties | 165,542 | 301,378 |
Total current liabilities | 4,625,499 | 4,282,284 |
Notes payable | 0 | 142,992 |
Notes payable - related party | 600,000 | 0 |
Asset retirement obligations - long term | 10,582,540 | 10,209,024 |
Total liabilities | 15,808,039 | 14,634,300 |
Stockholders' Deficit: | ' | ' |
Common stock: $001 par value; 333,333,333 shares authorized; 20,963,759 and 4,427,071 shares issued and outstanding as of July 31, 2014 and 2013, respectively | 21,082 | 4,427 |
Receivable for common stock | -2,184,879 | 0 |
Additional paid in capital | 78,953,599 | 75,137,401 |
Accumulated deficit | -70,106,351 | -63,522,775 |
Treasury stock | 0 | -822,250 |
Total stockholders' equity | 9,958,651 | 12,486,803 |
Noncontrolling interests | -34,535 | -29,008 |
Total equity | 9,924,116 | 12,457,795 |
TOTAL LIABILITIES AND EQUITY | 25,732,155 | 27,092,095 |
Series A 7% Convertible Preferred Stock [Member] | ' | ' |
Stockholders' Deficit: | ' | ' |
Preferred stock | 3,275,200 | 0 |
HCN Series 7% Convertible Preferred Stock [Member] | ' | ' |
Stockholders' Deficit: | ' | ' |
Preferred stock | $0 | $1,690,000 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Jul. 31, 2014 | Jul. 31, 2013 |
Accumulated depletion on evaluated oil and gas property accounted for using the full cost method of accounting | $3,491,420 | $2,617,478 |
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 | $135,590 | $116,945 |
Equity [Abstract] | ' | ' |
Preferred stock, shares issued (in shares) | 4,225 | ' |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized (in shares) | 333,333,333 | 333,333,333 |
Common stock, shares issued (in shares) | 21,081,602 | 4,427,071 |
Common stock, shares outstanding (in shares) | 21,081,602 | 4,427,071 |
Series A 7% Convertible Preferred Stock [Member] | ' | ' |
Equity [Abstract] | ' | ' |
Preferred Stock, par value (in dollars per share) | $400 | $400 |
Preferred stock, shares authorized (in shares) | 10,000 | ' |
Preferred stock, shares issued (in shares) | 8,188 | ' |
Preferred stock, shares outstanding (in shares) | 8,188 | ' |
HCN Series 7% Convertible Preferred Stock [Member] | ' | ' |
Equity [Abstract] | ' | ' |
Preferred Stock, par value (in dollars per share) | $400 | $400 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (USD $) | 12 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS [Abstract] | ' | ' |
Revenues | $5,065,096 | $7,070,540 |
Operating expenses | ' | ' |
Lease operating expense | 4,913,313 | 4,560,201 |
Depreciation, depletion, and amortization | 910,837 | 1,121,018 |
Accretion | 1,043,928 | 1,056,508 |
Consulting fees - related party | 6,754 | 196,384 |
Acquisition-related costs - related party | 0 | 34,834,752 |
General and administrative expense | 4,585,450 | 4,198,747 |
Total operating expenses | 11,460,282 | 45,967,610 |
Loss from operations | -6,395,186 | -38,897,070 |
Consulting and other income (expense) | 23,134 | 1,145,997 |
Interest expense, net | -132,955 | -149,131 |
Loss on sale of available for sale securities | 0 | -517,920 |
Impairment of available for sale securities | 0 | -275,327 |
Gain on derivative warrant liability | 0 | 1,056,224 |
Loss on disposal of assets | -23,990 | -14,054 |
Foreign currency transaction gain (loss) | -21,253 | -5,884 |
Net loss before income taxes | -6,550,250 | -37,657,165 |
Income tax provision | -4,599 | 122,949 |
Net loss | -6,554,849 | -37,534,216 |
Less: Net loss attributable to noncontrolling interests | -5,527 | -8,483 |
Net loss attributable to Hydrocarb Corporation | -6,549,322 | -37,525,733 |
Dividend on preferred stock | -34,254 | -69,920 |
Deemed dividend on preferred stock | -150,548 | 0 |
Accretion dividend - Beneficial Cash Feature on preferred stock | -949,808 | 0 |
Net loss attributable to Hydrocarb Energy Corp after dividends | ($7,683,932) | ($37,595,653) |
Basic and diluted loss per common share: (in dollars per share) | ($0.51) | ($8.66) |
Weighted average shares outstanding (basic and diluted) (in shares) | 15,150,782 | 4,342,864 |
CONSOLIDATED_STATEMENT_OF_CHAN
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (USD $) | Common Stock [Member] | Common Stock [Member] | Preferred Stock [Member] | Preferred Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Other Comprehensive Income [Member] | Stock Subscription Receivable [Member] | Accumulated Deficit [Member] | Total |
HCN [Member] | HEC [Member] | HCN [Member] | HEC [Member] | |||||||
Balance at Jul. 31, 2012 | $0 | $3,597 | $0 | $0 | $38,342,757 | $0 | ($743,082) | $0 | ($25,927,122) | $11,676,150 |
Balance, (in shares) at Jul. 31, 2012 | 0 | 3,597,071 | 0 | 0 | ' | ' | ' | ' | ' | ' |
Acquisition | ' | 830 | ' | ' | 35,395,970 | ' | ' | ' | ' | 35,396,800 |
Acquisition, (in shares) | ' | 830,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of HCN preferred stock | ' | ' | 1,690,000 | ' | ' | ' | ' | ' | ' | 1,690,000 |
Issuance of HCN preferred stock (in shares) | ' | ' | 4,225 | ' | ' | ' | ' | ' | ' | ' |
HCN purchase of HEC common stock | ' | ' | ' | ' | ' | -822,250 | ' | ' | ' | -822,250 |
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 | ' | ' | 743,082 |
Dividend on HCN preferred stock | ' | ' | ' | ' | ' | ' | ' | ' | -69,920 | -69,920 |
Net loss attributable to HEC | ' | ' | ' | ' | ' | ' | ' | ' | -37,525,733 | -37,525,733 |
Balance at Jul. 31, 2013 | 0 | 4,427 | 1,690,000 | 0 | 75,137,401 | -822,250 | 0 | 0 | -63,522,775 | 12,486,803 |
Balance, (in shares) at Jul. 31, 2013 | 0 | 4,427,071 | 4,225 | 0 | ' | ' | ' | ' | ' | 4,427,071 |
Issuance of HCN preferred stock | 6,560 | ' | ' | ' | 24,511 | ' | ' | ' | ' | 31,071 |
Issuance of HCN preferred stock (in shares) | 6,559,257 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of HCN preferred stock to settle debt and accounts payable | ' | ' | 1,585,200 | ' | ' | ' | ' | ' | ' | 1,585,200 |
Issuance of HCN preferred stock to settle debt and accounts payable (in shares) | ' | ' | 3,963 | ' | ' | ' | ' | ' | ' | ' |
HCN sale of HEC common stock for receivable | ' | ' | ' | ' | 177,750 | 822,250 | ' | -1,000,000 | ' | 0 |
HCN sale of HEC common stock for receivable | ' | ' | ' | ' | -1,729,688 | 3,589,567 | ' | -1,859,879 | ' | 0 |
HEC preferred stock exchanged in connection with HCN acquisition | ' | ' | -3,275,200 | 3,275,200 | ' | ' | ' | ' | ' | 0 |
HEC preferred stock exchanged in connection with HCN acquisition (in shares) | ' | ' | -8,188 | 8,188 | ' | ' | ' | ' | ' | ' |
HEC common stock exchanged in connection with HCN acquisition | -6,560 | 8,397 | ' | ' | -1,837 | ' | ' | ' | ' | 0 |
HEC common stock exchanged in connection with HCN acquisition (in shares) | -6,559,257 | 8,396,667 | ' | ' | ' | ' | ' | ' | ' | ' |
HEC Common stock issued to satisfy contingently-issued rights from NEI Acquisition | ' | 7,470 | ' | ' | -7,470 | ' | ' | ' | ' | 0 |
HEC Common stock issued to satisfy contingently-issued rights from NEI Acquisition (in shares) | ' | 7,470,000 | ' | ' | ' | ' | ' | ' | ' | ' |
HEC common stock issued to settle debt | ' | 620 | ' | ' | 3,588,947 | -3,589,567 | ' | ' | ' | 0 |
HEC common stock issued to settle debt (in shares) | ' | 619,960 | ' | ' | ' | ' | ' | ' | ' | ' |
Deemed Dividend on Preferred Stock | ' | ' | ' | ' | 949,808 | ' | ' | ' | ' | 949,908 |
Deemed Dividend on Preferred Stock | ' | ' | ' | ' | -949,808 | ' | ' | ' | ' | -949,908 |
Share-based compensation: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of fair value of stock options | ' | ' | ' | ' | 943,572 | ' | ' | ' | ' | 943,572 |
Warrants granted to related party | ' | ' | ' | ' | 6,754 | ' | ' | ' | ' | 6,754 |
Stock issued to employees and directors | ' | 168 | ' | ' | 813,659 | ' | ' | ' | ' | 813,827 |
Stock issued to employees and directors (in shares) | ' | 167,904 | ' | ' | ' | ' | ' | ' | ' | ' |
Expiration of derivative warrant liability | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 |
Dividend on HCN preferred stock | ' | ' | ' | ' | ' | ' | ' | ' | -34,254 | -34,254 |
Cash collection on stock subscription receivable | ' | ' | ' | ' | ' | ' | ' | 675,000 | ' | 675,000 |
Net loss attributable to HEC | ' | ' | ' | ' | ' | ' | ' | ' | -6,549,322 | -6,549,322 |
Balance at Jul. 31, 2014 | $0 | $21,082 | $0 | $3,275,200 | $78,953,599 | $0 | $0 | ($2,184,879) | ($70,106,351) | $9,958,651 |
Balance, (in shares) at Jul. 31, 2014 | 0 | 21,081,602 | 0 | 8,188 | ' | ' | ' | ' | ' | 21,081,602 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ' | ' |
Net income (loss) | ($6,554,849) | ($37,534,216) |
Adjustments to reconcile net income loss to net cash used in operating activities: | ' | ' |
Depreciation, depletion, and amortization | 910,837 | 1,121,018 |
Accretion | 1,043,928 | 1,056,508 |
(Gain) loss on sale of available for sale securities | 0 | 517,920 |
Impairment of available for sale securities | 0 | 275,327 |
Loss on disposal of assets | 23,990 | 14,054 |
Change in allowance for doubtful accounts | 11,948 | 57,491 |
Warrants granted to related party | 6,754 | 196,384 |
Share based compensation | 1,757,399 | 933,126 |
Acquisition-related costs - related party | 0 | 34,834,752 |
Gain on derivative warrant liability | 0 | -1,056,224 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | 353,571 | 168,096 |
Other receivables | 262,594 | 0 |
Accounts receivable - related party | 143,270 | -68,620 |
Other assets | 263,510 | -89,829 |
Accounts payable and accrued expenses | 184,900 | 299,246 |
Accounts payable related party | 1,244,054 | 125,021 |
Advances | 15,100 | 125,643 |
Settlement of asset retirement obligation | -123,664 | -318,225 |
NET CASH USED IN OPERATIONS | -456,657 | 657,472 |
CASH FLOWS FROM INVESTING ACTIVITIES | ' | ' |
Purchases of oil and gas properties | -1,052,679 | -1,564,490 |
Purchases of property and equipment | -169,794 | -13,648 |
Proceeds from sale of oil and gas properties | 625,000 | 195,563 |
Change in restricted cash | 42,795 | -30,739 |
Purchase of available for sale securities | 0 | -24,593 |
Proceeds from sale of available for sale securities | 0 | 287,874 |
CASH USED IN INVESTING ACTIVITIES | -554,678 | -1,150,033 |
CASH FLOWS FROM FINANCING ACTIVITIES | ' | ' |
Payments on notes payable | -471,052 | -271,972 |
Proceeds from note payable to related party | 600,000 | 0 |
Proceeds from collections on receivable for stock sale | 675,000 | 0 |
Proceeds from HCN issuance of common stock | 31,071 | 0 |
Dividend on HCN preferred stock | -34,254 | -69,920 |
CASH PROVIDED BY FINANCING ACTIVITIES | 800,765 | -341,892 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | -210,571 | -834,453 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 354,829 | 1,189,282 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $144,258 | $354,829 |
Description_of_Business_and_Su
Description of Business and Summary of Significant Accounting Policies | 12 Months Ended | |
Jul. 31, 2014 | ||
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 | ||
We are a natural resource exploration and production company engaged in the exploration, acquisition, development, and production of oil and gas properties in the United States and onshore in Namibia, Africa. We were incorporated under the laws of the State of Nevada on April 12, 2005 under the name “Carlin Gold Corporation”. On July 19, 2005, we changed our name to “Nevada Gold Corp.” On October 18, 2005, we changed our name to “Gulf States Energy, Inc.” and increased our authorized capital from 100,000,000 shares of common stock to 500,000,000 shares of common stock, par value $0.001 per share. On September 5, 2006, we changed our name to “Strategic American Oil Corporation”. On April 4, 2012 we completed a one new share for twenty-five old share (1:25) reverse stock split and as a result our authorized capital decreased from 500,000,000 shares of common stock to 20,000,000 shares of common stock. Also, effective April 4, 2012, we changed our name to “Duma Energy Corp.” Effective May 16, 2012, we increased our authorized capital from 20,000,000 shares to 500,000,000 shares of common stock. Effective November 29, 2013, the Company increased the number of its authorized shares of common stock from 500,000,000 to 1,000,000,000 shares of common stock. Effective February 18, 2014, we changed our name from Duma Energy Corp. to Hydrocarb Energy Corp. Effective May 8, 2014, we effected a 1:3 reverse split of our authorized common stock and a corresponding 1:3 reverse split of our outstanding common stock. All share and per share amounts for all periods in this report have been retroactively restated to reflect the reverse split. Our capitalization at July 31, 2014 was 333,333,334 authorized common shares with a par value of $0.001 per share. Our common stock is quoted under the symbol “HECC” on the OTCBB. | ||
The acquisition of HCN, an entity under common control, on December 9, 2013 (See Note 2 – HCN Acquisition) has resulted in a change in the reporting entity. The consolidated financial statements presented for the periods subsequent to the acquisition include the accounts of HCN and its subsidiaries. As HEC and HCN are under the common control of same shareholder group, the acquired assets and liabilities were recorded at the historical carrying value and the consolidated financial statements were retroactively restated to reflect the Company as if HCN had been owned since the beginning of the earliest period presented. | ||
We own 100% of the issued and outstanding share capital of (i) Penasco Petroleum Inc., a Nevada corporation, (ii) Galveston Bay Energy, LLC, a Texas limited liability company, (iii) SPE Navigation I, LLC, a Nevada limited liability company, (iv) Namibia Exploration, Inc., a Nevada corporation, (v) Hydrocarb Corporation, a Nevada corporation, (vi) Hydrocarb Texas Corporation, a Texas corporation, and (vii) Hydrocarb Namibia Energy (Pty) Limited, a company chartered in the Republic of Namibia. In addition, we own 95% of the issued and outstanding share capital of Otaiba Hydrocarb LLC, a UAE limited liability corporation. | ||
As of July 31, 2014, we maintain developed acreage offshore in Texas. As of July 31, 2014, we were producing oil and gas from our working interest in four offshore fields in Galveston Bay, Texas. During September 2012, we acquired, through the acquisition of Namibia Exploration Inc., a 39% non-operated working interest in a concession located onshore in Namibia, Africa. During December 2013, with our acquisition of Hydrocarb Corporation, we acquired 51% working interest in this onshore Namibia, Africa concession and now own 90% working interest (100% cost responsibility) in the Namibia, Africa concession. | ||
Reclassifications | ||
Certain prior year amounts have been reclassified to conform with the current presentation. | ||
Principles of consolidation | ||
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”). The accompanying consolidated financial statements include the accounts of Hydrocarb Energy Corp., our wholly owned subsidiaries Penasco Petroleum Corporation (“Penasco”), SPE Navigation I, LLC (“SPE”), Galveston Bay Energy, LLC (“GBE”), Namibia Exploration, Inc. (“NEI”), Hydrocarb Corporation (“HCN”), Hydrocarb Texas Corporation, and Hydrocarb Namibia Energy (Pty) Limited. In addition, these financials include our 95% ownership interest in Otaiba Hydrocarb LLC. 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 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 our former Chief Financial Officer, the former Chief Executive Officer and the current Chief Executive Officer. This balance also includes an oil and gas receivable from Lifestream, LLC, a company owned by the brother of our current CEO. | ||
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, 2014 and 2013, we have reserved $70,742 and $58,585, 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, 2014, 83% of our revenue was attributable to one purchaser. At July 31, 2014, this same purchaser accounted for 88% of our accounts receivable. 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. | ||
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, 2014 and July 31, 2013, 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, 2014 and 2013, restricted cash totaled $6,877,944 and $6,920,739, respectively. | ||
Other assets | ||
Other assets at July 31, 2014 and 2013 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, 2014 and 2013, 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, 2014 and 2013, advances totaled $195,904 and $180,804, 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 valorem 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, 2014 or July 31, 2013. 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 May 8, 2014, we affected a 1-for-3 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, 2014 and 2013, 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 13 - 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. | ||
Recent accounting pronouncements | ||
In March 2013, the FASB amended ACS 830, Foreign Currency Matters, to clarify the appropriate accounting when a parent ceases to have a controlling interest in a subsidiary or group of assets that is a business within a foreign entity. This clarification provides that the cumulative translation adjustment should only be released into net income if the loss of controlling interest represents complete or substantially complete liquidation of the foreign entity in which the subsidiary or asset group had resided. This amendment is effective for us starting with our first quarter of fiscal year 2015 and adoption would impact our consolidated financial condition and results of operations if we dispose of a foreign entity. | ||
In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (“ASU No. 2014-09”), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance when it becomes effective. This new standard is effective for us starting with our first quarter of fiscal year 2018. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. | ||
Other 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, 2014 | |||||
Acquisitions [Abstract] | ' | ||||
Acquisitions | ' | ||||
Note 2 – Acquisitions | |||||
HCN Acquisition | |||||
On December 9, 2013 (“Acquisition Date”), we acquired HCN (“HCN Acquisition”) pursuant to a Share Exchange Agreement (“HCN Agreement”) dated November 27, 2013. The purchase price was 8,396,667 shares of HEC’s common stock to HCN’s shareholders in exchange for 100% of the outstanding equity interest in HCN and 8,188 shares of HEC Series A Preferred Stock to a holder of convertible preferred stock in HCN in exchange of 100% of the holder’s preferred stock in HCN. At date of closing the 8,396,667 shares of common stock issued had a market valuation of $64,990,200 (based on market close of $7.74 on December 9, 2013) and the preferred stock issued had a value of $3,275,200 (8,188 shares at par value of $400). | |||||
In addition, the HCN Agreement provided that HEC would issue 7,470,000 shares of its common stock to the holders of certain rights to acquire HEC stock. These rights were previously issued by HEC as contingent consideration in connection with the acquisition of NEI. The rights had been convertible into HEC common stock based upon HEC market capitalization milestones. The rights were issued to entities deemed related parties to HEC. | |||||
In anticipation of the HCN Acquisition, HEC issued 619,960 shares of its common stock to HCN as full payment for HEC’s indebtedness to HCN in the amount of $3,589,567. A condition to the Agreement closing was that HCN would sell the 619,960 shares before closing of the acquisition, which it did (see Note 10 – Capital Stock – Receivables for Common Stock). | |||||
With HCN, we acquired its 100% owned subsidiaries: Hydrocarb Namibia Energy (Pty) Limited, a Namibia Company and Hydrocarb Texas Corporation, a Texas Corporation; and its 95% owned subsidiary Otaiba Hydrocarb LLC, a UAE Limited Liability Company. | |||||
Prior to the HCN Acquisition, HCN was directly and indirectly majority-owned and controlled by HEC’s Chairman of the Board and entities related to him and his family. Since HEC and HCN were under common control of a controlling party both before and after the completion of the share exchange, the transaction was accounted for as a business acquired from an entity under common control and the assets and liabilities acquired were recorded at HCN’s historical cost at Acquisition Date following ASC 805-50-30, Business Combinations. Under this accounting treatment, the results of operations for the year ended July 31, 2014 and assets and liabilities of HCN are included in these financial statements as if the transaction had occurred at the beginning of the reporting period. Prior reporting periods in these financial statements have been retroactively adjusted to include HCN and its subsidiaries. | |||||
According to ASC 805-50-30, the net assets of HCN are to be recorded at historical cost, therefore, the value of the 8,396,667 common shares and 8,188 preferred shares are deemed to be the same as the historical value of HCN net assets of $1,398,127 with excess of $599,409 recorded as additional paid in capital by HEC. | |||||
Summary of the accounting entry to record this acquisition in December 2013 is as follows: | |||||
Assets acquired | $ | 1,529,246 | |||
Liabilities assumed | (161,599 | ) | |||
Noncontrolling interest in 95% owned HCN subsidiary | 30,480 | ||||
$ | 1,398,127 | ||||
Series A 7% Preferred Stock, par $400 | $ | 3,275,200 | |||
Common stock, at par | 8,397 | ||||
Receivable for common stock | (2,484,879 | ) | |||
Additional paid-in capital | 599,409 | ||||
$ | 1,398,127 | ||||
HCN had 51% working-interest rights in and operated an unevaluated onshore petroleum Namibian concession 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. (“Namibian Concession”) described in Note 5 – Oil and Gas Properties, below, and provided international oilfield consulting services. Prior to this acquisition, HEC owned a 39% working-interest right in this concession see NEI Acquisition below). With the HCN acquisition, we now own a 90% working interest (100% cost responsibility) in the concession. This 5.3 million-acre concession is located in northern Namibia in Africa. 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 available 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 and conduct an environmental study. The minimum expenditure is $300,000. | ||||
In conjunction with the HCN acquisition, the HEC Board of Directors authorized the immediate issuance of 7,470,000 shares of our common stock to the former owners of NEI. We previously acquired NEI on August 7, 2012 and these 7,470,000 shares had been contingently-issuable consideration for the acquisition of NEI. We issued these shares on December 9, 2013. The original agreement contained market conditions for the issuance of this stock. | |||||
Namibia Exploration, Inc. (“NEI”) Acquisition | |||||
On August 7, 2012, we entered into a Share Exchange Agreement (the “NEI Agreement”), which was closed on September 6, 2012, under which we purchased NEI, a corporation organized under the laws of the state of Nevada for the issuance of 8,396,667 shares of our common stock as described below (the “NEI Acquisition”). Prior to the acquisition, NEI was directly and indirectly owned and controlled by HEC’s then-Chief Executive Officer, his brother-in-law, and his father-in-law. | |||||
NEI was formed in February 2012 and its sole asset was a 39% working interest (43.33% cost responsibility) in the Namibian Concession. With the acquisition of HCN, the Company now has a 90% working interest (100% cost responsibility) in the Namibian Concession. HEC now holds working interest in the Concession in partnership with the National Petroleum Corporation of Namibia Ltd. ("NPC Namibia"). | |||||
As NEI had no operations other than the ownership of the Namibian Concession, the transaction was accounted for as an asset purchase from an entity under common control and the asset was recorded at NEI’s historical cost of $562,048 with additional amounts paid considered compensatory and thus an expense of the acquisition. The consideration included stock granted at the closing of the transaction as well as a series of stock grants that were 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. $34,834,752 was reflected in our statement of operations as Acquisition-related costs – related party in conjunction with this transaction. | |||||
NEI originally acquired its interests in the Namibian Concession from Hydrocarb Namibia (a subsidiary of HCN) in exchange for a farm-in fee, totaling $2,400,000, payable over two years. At that time HCN was partly owned by the uncle of HEC’s then-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 HCN given that the concession was unproved, management concluded that HCN’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 provided for preferential offerings of other international oil and gas opportunities similar to the concession in Namibia. With the Company’s acquisition of HCN and its accounting for the HCN transaction as the acquisition of a business from an entity under common control, the $2,400,000 fee has been eliminated in consolidation, since these financial statements have been retroactively adjusted to include HCN and its subsidiaries since the beginning of the reporting period herein. | |||||
Consideration for the acquisition of NEI | |||||
Pursuant to the terms of the Agreement, HEC issued 830,000 shares of common stock in September 2012 at the closing. An additional 2,490,000 shares were contingently issuable as consideration for the NEI Acquisition, in accordance with the following milestones which were to have been reached within 10 years after the closing of the acquisition: | |||||
● | a further 830,000 of the Shares will be issued when and if HEC's 10-day volume-weighted average market capitalization reaches $82,000,000; | ||||
● | a further 2,490,000 of the Shares will be issued when and if HEC's 10-day volume-weighted average market capitalization reaches $196,000,000; and | ||||
● | a further and final 4,150,000 of the Shares will be issued when and if HEC's 10-day volume-weighted average market capitalization reaches $434,000,000. | ||||
NEI’s cost basis in the Namibia Concession was $562,048. 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 consisted of the 830,000 shares that were awarded at closing, which were valued using the closing market price of the stock on the date of grant, and the 7,470,000 shares of the contingent stock grant. The fair value of 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 HEC and NEI, using multiple probability-weighted scenarios, and projections of HEC’s capital structure. As of July 31, 2013, we had recognized $34,834,752 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 $29,212,000 associated with the contingent consideration. | |||||
In conjunction with the HCN acquisition in December 2013, the HEC Board of Directors authorized the immediate issuance of these contingently issuable 7,470,000 shares of our common stock to the former owners of NEI. We issued these shares on December 9, 2013. | |||||
Hydrocarb agreement | |||||
In conjunction with the execution of the NEI Agreement, and as a condition of Closing, HEC entered into a Consulting Services Agreement with HCN (the "Consulting Agreement"), whereby HCN would provide various consulting services with respect to HEC's business ventures in Namibia and whereby HCN acknowledged and agreed that the obligations of NEI under its existing Farmin Opportunity Report with HCN (the "FOR") would be satisfied in exchange for HEC paying a consulting fee (the "Fee") to HCN of $2,400,000. As a result of HEC’s acquisition of HCN, this Consulting Agreement and its related income/expense and receivable/payable have been eliminated in consolidation. | |||||
Supplemental_Cash_Flow_Informa
Supplemental Cash Flow Information | 12 Months Ended | ||||||||
Jul. 31, 2014 | |||||||||
Supplemental Cash Flow Information [Abstract] | ' | ||||||||
Supplemental Cash Flow Information [Text Block] | ' | ||||||||
Note 3 – Supplemental Cash Flow Information | |||||||||
As of and For the year ended July 31, | 2014 | 2013 | |||||||
SUPPLEMENTAL CASH FLOW INFORMATION | |||||||||
Cash paid during the period for: | |||||||||
Income taxes | $ | 10,000 | $ | 42,483 | |||||
Interest | $ | 21,497 | $ | 207,269 | |||||
NONCASH INVESTING AND FINANCING ACTIVITIES | |||||||||
Issuance of HEC common stock to setle notes payable | $ | 3,589,567 | - | ||||||
Preferred stock exchanged for HCN preferred stock for acquisition of HCN | $ | 3,275,200 | $ | - | |||||
Receivable for common stock | $ | 1,859,879 | $ | - | |||||
Settlement of HCN debt with HCN preferred stock | $ | 1,585,200 | $ | 1,690,000 | |||||
Receivable for common stock - related party | $ | 1,000,000 | $ | - | |||||
Note payable for prepaid insurance | $ | 403,104 | $ | 260,905 | |||||
Asset retirement obligation sold | $ | 33,195 | $ | 438 | |||||
Common stock exchanged for HCN common stock for acquisition of HCN | $ | 8,397 | $ | - | |||||
Common stock issued to satisfy contingently issuable shares from 2012 acquisition of Namibia Exploration , Inc. | $ | 7,470 | $ | - | |||||
Asset retirement obligations - change in estimate | $ | (104,237 | ) | $ | 786,120 | ||||
Treasury stock acquired via note receivable | $ | - | $ | 822,250 | |||||
Acquisition of Namibia Exploration, Inc. | $ | - | $ | 562,048 | |||||
Expiration of derivative warrant liability | $ | - | $ | 269,164 | |||||
Accounts payable for oil and gas properties | $ | - | $ | 188,607 | |||||
Asset retirement obligations incurred | $ | - | $ | 26,500 | |||||
Available_for_Sale_Securities
Available for Sale Securities | 12 Months Ended |
Jul. 31, 2014 | |
Available for Sale Securities [Abstract] | ' |
Available for Sale Securities | ' |
Note 4 – Available for Sale Securities | |
During the year ended July 31, 2012, we 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, 2014 and 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, 2014 | |||||||||
Oil and Gas Properties [Abstract] | ' | ||||||||
Oil and Gas Properties | ' | ||||||||
Note 5 – Oil and Gas Properties | |||||||||
Oil and natural gas properties consisted of the following: | |||||||||
For the year ended July 31, | 2014 | 2013 | |||||||
Evaluated Properties | |||||||||
Costs subject to depletion | $ | 19,153,125 | $ | 19,857,842 | |||||
Accumulated impairment | (373,335 | ) | (373,335 | ) | |||||
Accumulated depletion | (3,491,420 | ) | (2,617,478 | ) | |||||
Total evaluated properties | 15,288,370 | 16,867,029 | |||||||
Unevaluated properties | 2,119,769 | 1,124,805 | |||||||
Net oil and gas properties | $ | 17,408,139 | $ | 17,991,834 | |||||
Evaluated properties | |||||||||
Additions to evaluated oil and gas properties during the year ended July 31, 2014 and 2013 consisted mainly of exploration costs, geological and geophysical costs of $34,029 and $157,818, respectively. | |||||||||
Effective September 1, 2013, we conveyed our interest in the Dix, Melody, Curlee, Palacios and Illinois properties to Carter E&P, LLC in conjunction with our termination of Steven Carter as Vice President of Operations for $0 cash proceeds and the assumption of the abandonment liabilities of $4,381. In accordance with full cost rules, we recognized no gain or loss on the sale. | |||||||||
Effective March 25, 2014, we conveyed our interest in the Barge Canal Welder properties to Winright Oil Company, LLC. We received net proceeds of $625,000 for this conveyance. In accordance with full cost rules, we recognized no gain or loss on the sale. | |||||||||
Unevaluated Properties | |||||||||
Namibia, Africa | |||||||||
In September 2012, we acquired a 39% (43.33% cost responsibility) working interest in a concession in Namibia, Africa. In September 2012, we acquired a 39% (43.33% cost responsibility) working interest in a concession in Namibia, Africa. With our acquisition of HCN in December 2013, we acquired an additional 51% (56.67% cost responsibility) and we now own 90% (100% cost responsibility) of this concession, as described above in Note 2 –Acquisitions. This property is a 5.3 million-acre concession in northern Namibia in Africa. | |||||||||
For the year ended July 31, 2014 we have incurred total costs of $1,406,114, including NEI’s cost basis incurred upon acquisition of the property, which was $562,048. For the year ended July 31, 2013 we incurred total costs of $713,655, including NEI’s cost basis incurred upon acquisition of 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, and conduct an environmental study. The minimum expenditure is $300,000. | ||||||||
As of July 31, 2014, approximately $2.1 million has been expended towards the initial exploration period. As of July 31, 2013, approximately $900,000 has been expended towards the initial exploration period. | |||||||||
Additions to unevaluated properties for the year ended July 31, 2014 consisted primarily of: | |||||||||
-1 | Approximately $800,000 of exploration costs associated with the acquisition of aerial gravity and magnetic data over the Namibia concession, and | ||||||||
-2 | Approximately $129,000 of leasehold costs, specifically payment of the annual concession fee to the Government of Namibia. | ||||||||
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, 2014 include: | |||||||||
● | Cost for a recompletion of Fisher Reef 2-3A#1; | ||||||||
● | Cost for plugging/abandonment of two onshore wells; | ||||||||
● | Costs for workover of Point Barrow salt water disposal well #1; | ||||||||
● | Infrastructure enhancements; and | ||||||||
● | Increase in asset retirement obligations primarily due to changes in timing and in estimated costs for the gathering systems located in Galveston Bay. | ||||||||
Sales of properties | |||||||||
In September 2012, we sold our 6.25% overriding royalty interests in properties located in Franklin and Richard parishes in Louisiana, the “Holt” and “Strahan” properties, to the operator of the properties and released the operator from any further liability from the note receivable in exchange for $50,000 cash. We allocated the cash proceeds between an outstanding, and fully reserved, note receivable we held on the property 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. | |||||||||
In 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. | |||||||||
Effective September 1, 2013, we conveyed our full interest in the Illinois, Palacios, Curlee, Dix, and Melody 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. | |||||||||
Effective March 25, 2014, we conveyed our interest in the Barge Canal Welder properties to Winright Oil Company, LLC. We received net proceeds of $625,000 for this conveyance. In accordance with full cost rules, we recognized no gain or loss on the sale. |
Impairment
Impairment | 12 Months Ended |
Jul. 31, 2014 | |
Impairment [Abstract] | ' |
Impairment | ' |
Note 6 - 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, 2014 and July 31, 2013, the net book value of oil and gas properties did not exceed the ceiling amount and thus, no impairment of the properties was required. 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, 2014 | |||||||||||||||||||||
Asset Retirement Obligation [Abstract] | ' | ||||||||||||||||||||
Asset Retirement Obligation | ' | ||||||||||||||||||||
Note 7 – Asset Retirement Obligation | |||||||||||||||||||||
The following is a reconciliation of our asset retirement obligation liability as of July 31, 2014 and 2013, respectively. | |||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
czReconciliation of asset retirement obligation balance | |||||||||||||||||||||
Liability for asset retirement obligation, beginning of period | $ | 10,933,398 | $ | 9,382,933 | |||||||||||||||||
Asset retirement obligations sold | (33,195 | ) | (438 | ) | |||||||||||||||||
Asset retirement obligations incurred on properties drilled | - | 26,500 | |||||||||||||||||||
Accretion | 1,043,928 | 1,056,508 | |||||||||||||||||||
Revisions in estimated cash flows | (104,237 | ) | 786,120 | ||||||||||||||||||
Costs incurred | (123,664 | ) | (318,225 | ) | |||||||||||||||||
Liability for asset retirement obligation, end of period | $ | 11,716,230 | $ | 10,933,398 | |||||||||||||||||
Current portion of asset retirement obligation | $ | 1,133,690 | $ | 724,374 | |||||||||||||||||
Noncurrent portion of asset retirement obligation | 10,582,540 | 10,209,024 | |||||||||||||||||||
Total liability for asset retirement obligation | $ | 11,716,230 | $ | 10,933,398 | |||||||||||||||||
Estimated Timing of asset retirement obligation payments: | |||||||||||||||||||||
Fiscal Year | Pipelines | Easements | Wellbores | Facilities | Total | ||||||||||||||||
2015 | $ | 126,290 | $ | - | $ | 997,400 | $ | 10,000 | $ | 1,133,690 | |||||||||||
2016 | $ | 60,000 | $ | 27,516 | $ | 639,725 | $ | - | $ | 727,241 | |||||||||||
2017 | $ | 99,938 | $ | 66,006 | $ | 191,476 | $ | 837,436 | $ | 1,194,856 | |||||||||||
2018 | $ | 55,040 | $ | 14,475 | $ | 548,700 | $ | - | $ | 618,215 | |||||||||||
2019 | $ | 52,621 | $ | 10,429 | $ | 572,337 | $ | 221,757 | $ | 857,144 | |||||||||||
2020 to 2024 | $ | 980,713 | $ | 193,283 | $ | 2,269,781 | $ | 848,211 | $ | 4,291,988 | |||||||||||
2025 to 2029 | $ | 236,898 | $ | 67,089 | $ | 1,356,391 | $ | $ | 1,660,378 | ||||||||||||
2030 to 2034 | $ | 44,439 | $ | 145,197 | $ | 143,578 | $ | 899,504 | $ | 1,232,718 | |||||||||||
Thereafter | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||
Total | $ | 1,655,939 | $ | 523,995.06 | $ | 6,719,388 | $ | 2,816,908 | $ | 11,716,230 | |||||||||||
The above dismantlement, restoration or abandonment obligations relate to the Company's following properties: (1) a combined total of 45 pipelines located in Chambers County, Texas and Galveston County, Texas (2) a combined total of 135 surface or right of way easements located in Chambers County. Texas and Galveston County, Texas (3) a combined total of 143 wellbores located in Chambers County, Texas and Galveston County, Texas and (4) a combined total of 8 facilities located in Chambers County, Texas and Galveston County, Texas. | |||||||||||||||||||||
The Company's ARO reflects the estimated present value of the amount of dismantlement, removal, site reclamation and similar activities associated with the Company's oil and gas properties. Inherent in the fair value calculation of the ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlement, and changes in the legal, regulatory, environmental and political environments. To the extent future revisions to these assumptions impact the fair value of the existing ARO liability, a corresponding adjustment is made to the oil and gas property balance. | |||||||||||||||||||||
As of July 31, 2014, the Company does not have any active dismantlement, restoration or abandonment activities in progress or underway. During the year ended July 31, 2014, the Company plugged 3 wells reducing its wellbore retirement obligations from those previously reported for the year ended July 31, 2013. The Company historically conducts all such remediation activities during the winter or spring periods, which have yet to be determined as of the date of this filing. " | |||||||||||||||||||||
Notes_Payable
Notes Payable | 12 Months Ended | ||||||||||||
Jul. 31, 2014 | |||||||||||||
Notes Payable [Abstract] | ' | ||||||||||||
Notes Payable | ' | ||||||||||||
Note 8 – Notes Payable | |||||||||||||
Line of Credit | |||||||||||||
On March 17, 2011, GBE secured a one year revolving line of credit of up to $5 million with a commercial bank. The note specified interest at a rate of prime + 1% with a minimum interest rate of 5% per annum. The initial interest rate was 6%, and interest is payable monthly. Proceeds from the line of credit were used solely to enhance our Galveston Bay properties. The note was collateralized by our Galveston Bay properties and substantially all of GBE’s assets. HEC also executed a parental guarantee of payment. The note was extended several times during fiscal 2013 and finally replaced by a term loan note in June 2013. We held no balance outstanding on our line of credit for the years ended July 31, 2014 and July 31, 2013, respectively. During the year ended July 31, 2014, we closed our LOC with the commercial bank and replaced it with an installment note payable. See below for further details. | |||||||||||||
HCN Note Payable | |||||||||||||
During September 2012, in conjunction with the acquisition of NEI, HEC entered into a Consulting Services Agreement with HCN (the "Consulting Agreement”) which obligated HEC to pay a consulting fee (the "Fee") to HCN of $2,400,000 as follows: | |||||||||||||
(a) $800,000 on September 6, 2012, which was 15 days from the date that the Minister of Mines and Energy consented to the assignment of a 39% working interest in the Namibian concession to HEC, and | |||||||||||||
(b) $1,600,000 note payable, with principal payments of $800,000 each due on August 7, 2013 and August 7, 2014. | |||||||||||||
Interest accrued on the principal amount at the rate of 5% per annum, calculated semi-annually and payable in arrears. At HEC’s sole discretion, it could pay the first tranche of the Fee and principal associated with the note payable using HEC common stock. HEC was required to pay a late fee of 10% per quarter for any outstanding balance of the Fee under the Consulting Agreement which commenced 30 calendar days from the date that the Fee or portion of the Fee is due, which by the terms of the Consulting Agreement may only be paid in cash. The Consulting Agreement is more fully described in our audited financial statements for the year ended July 31, 2013, contained in our Annual Report filed with the SEC on Form 10-K. | |||||||||||||
In October 2013, prior to our acquisition of HCN, HEC settled the then-outstanding $2,400,000 Fee and $553,630 of interest and late fees associated with the Fee by issuance of HEC common stock (See Note 7 - Capital Stock). Further, $25,000 of the related interest and fees was settled in cash. As the acquisition of HCN is accounted for as an acquisition of an entity under common control and prior reporting periods in these financial statements have been appropriately adjusted as if the acquisition had occurred at the beginning of the comparative periods, this note and related amounts have been removed from these financial statements. | |||||||||||||
Installment Notes Payable | |||||||||||||
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 $5,530 and $11,678 as of July 31, 2014 and July 31, 2013, respectively. | |||||||||||||
In March 2013, we financed our commercial insurance program using a note payable for $260,905. Under the note, we were obligated to make nine payments of $29,591 per month, which include principal and interest, beginning in March 2013. The principal balance owed on the note payable as of July 31, 2013, was $115,958. No amounts were owed on the note payable as of July 31, 2014. | |||||||||||||
In February 2014, we financed our commercial insurance program using a note payable for $403,104. Under the note, we are obligated to make nine payments of $45,718 per month, which include principal and interest, beginning in March 2014. As of July 31, 2014, the note payable balance was $179,158. | |||||||||||||
As noted above, in June 2013, the outstanding balance on our line of credit of $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 representing principal reduction plus interest per month. The note accrues annual interest at prime + 1%, currently totaling 6%. As of July 31, 2014 and July 31, 2013, the balance outstanding related to this note was $150,000 and $275,000, respectively. The July 2014 payment of $12,500 was not made and as a result, the Company incurred $663 in late fees and interest. In August 2014, the Company paid off the outstanding balance of $150,000 plus accrued interest and fees, in connection with entering into the Credit Agreement with Shadow Tree Capital Management (see Note 15 - Subsequent Events, below). | |||||||||||||
Maturities of our long term debt obligation at July 31, 2014 are as follows: | |||||||||||||
Year ending July 31, | 2015 | Thereafter | Total | ||||||||||
Operating and capital leases | $ | - | $ | - | $ | - | |||||||
Notes payable | 334,688 | - | 334,688 | ||||||||||
Total | $ | 334,688 | $ | - | $ | 334,688 |
Fair_Value
Fair Value | 12 Months Ended | ||||||||
Jul. 31, 2014 | |||||||||
Fair Value [Abstract] | ' | ||||||||
Fair Value | ' | ||||||||
Note 9 – Fair Value | |||||||||
Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company categorizes financial assets and liabilities into the three levels of the fair value hierarchy. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value and bases categorization within the hierarchy on the lowest level of input that is available and significant to the fair value measurement. | |||||||||
● | Level 1 — Quoted prices in active markets for identical assets or liabilities; | ||||||||
● | Level 2 — Observable inputs other than Level 1, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and | ||||||||
● | Level 3 — Significant unobservable inputs that are supported by little or no market activity or that are based on the reporting entity’s assumptions about the inputs. | ||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||||||
At July 31, 2014 and 2013 we had no financial assets and liabilities requiring measurement at fair value on a recurring basis. We had no transfers in or out of either Level 1 or Level 2 fair value measurements during the years ended July 31, 2014 and 2013. During the annual 2013 period, we did recognize changes in the fair value measurement of our Level 3 derivative warrant liability during the years ended July 31, 2013. No fair value measurement Level 3 derivative warrant liabilities existed during the year ended July 31, 2014. | |||||||||
Derivative Warrant Liabilities | |||||||||
Warrants – Third Party | |||||||||
During the year ended July 31, 2010 we issued certain warrants which contained a down-ratchet provision on the exercise price of the warrants. In accordance with accounting guidance we utilize FASB ASC Topic No. 815-40 to determine whether an instrument (or embedded feature) is indexed to an entity’s own stock. This literature specifies when a contract would otherwise meet the definition of a derivative but that both (a) indexed to our stock and (b) classified in stockholders’ equity in our statement of financial position, would not be considered a derivative financial instrument. The guidance provides a two-step model to be applied in determining whether a financial instrument or embedded feature is indexed to an issuer’s own stock and thus able to qualify for the scope exception. | |||||||||
Based upon this guidance the warrants issued during the year ended July 31, 2010 were not afforded equity treatment due to the down-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 warrants were fair valued using a multi-nominal 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; and | ||||||||
● | 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 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 antidilution provisions expire three years after the grant of the warrants. Accordingly, the provision for warrants to purchase 206,400 shares of commons stock expired on November 13, 2012 and the warrants were determined to no longer be derivatives. The outstanding warrant liability, as a result, was reclassified to additional-paid-in-capital and the fair value was determined for a final mark-to-market adjustment. | |||||||||
The following table sets forth the changes in the fair value measurement of our Level 3 derivative warrant liability as follows: | |||||||||
As of July 31, | 2014 | 2013 | |||||||
Beginning of period | $ | - | $ | 1,325,388 | |||||
Expiration of derivative warrant feature | - | (269,164 | ) | ||||||
Unrealized gain on changes in fair value of derivative liability | - | (1,056,224 | ) | ||||||
End of period | $ | - | $ | - | |||||
Warrants – 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 a related party as described in Note 11 – Related Party Transactions. Under the terms of the agreement, we granted warrants to purchase 400,000 shares of common stock that have a market condition. If our common stock attains a five day average closing price of $22.50 per share, warrants to purchase 200,000 shares with an exercise price of $7.50 per share 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 $45.00 per share, warrants to purchase 200,000 shares with an exercise price of $7.50 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 were amortized over the derived service periods of 2.08 years and 2.49 years, respectively. As of July 31, 2014, the expense for the warrants was fully amortized. | |||||||||
In accordance with accounting guidance, the fair value of the warrants that vest upon the attainment of a market condition is expensed and amortized over the lower of the implicit or derived service period of the warrants. Any previously recognized expense is not reversed in the event of a subsequent decline in the fair value of market condition equity based compensation. During the year ended July 31, 2013, $1,056,224 of unrealized non-cash gains were recognized as fair value adjustments within Level 3 of the fair value measurement hierarchy and were recorded as a reduction of the derivative warrant liability and an unrealized gain on the change in fair value of the liability in our statement of operations. (See Note 10 – Capital Stock, for further details surrounding our warrant liability. | |||||||||
Capital_Stock
Capital Stock | 12 Months Ended | ||||||||||||||||||||||||
Jul. 31, 2014 | |||||||||||||||||||||||||
Capital Stock [Abstract] | ' | ||||||||||||||||||||||||
Capital Stock | ' | ||||||||||||||||||||||||
Note 10 – Capital Stock | |||||||||||||||||||||||||
The following reflects the fair value at the end of the derived service period for each of the warrants. | |||||||||||||||||||||||||
Warrant B | Warrant C | ||||||||||||||||||||||||
Fair Value | $ | 266,017 | $ | 206,245 | |||||||||||||||||||||
The following table reflects information regarding Warrant B and Warrant C during the year ended July 31, 2014 and 2013. | |||||||||||||||||||||||||
31-Jul-14 | 31-Jul-13 | ||||||||||||||||||||||||
Warrant B | Warrant C | ||||||||||||||||||||||||
Compensation Expense recognized | $ | 6,754 | $ | 196,384 | |||||||||||||||||||||
Stock Split | |||||||||||||||||||||||||
Effective on May 8, 2014, we affected a 1:3 reverse split of our authorized common stock and a corresponding 1:3 reverse split of our outstanding common stock. All share and per share amounts for all periods in this report have been retroactively restated to reflect the reverse split. | |||||||||||||||||||||||||
Effective November 29, 2013, the Company increased the number of its authorized shares of common stock from 166,666,667 shares, par value $0.001 per share to 333,333,334 authorized common shares with a par value of $0.001 per share. | |||||||||||||||||||||||||
Our capitalization at July 31, 2014 was 333,333,334 authorized common shares with a par value of $0.001 per share. | |||||||||||||||||||||||||
Series A Preferred Stock | |||||||||||||||||||||||||
On December 2, 2013, we filed a Certificate of Designation that created a new class of stock: Series A 7% Convertible Voting Preferred Stock (“Series A Preferred”). Up to 10,000 shares of Series A Preferred are authorized. The stock has a stated value of $400 per share, pays annual dividends at 7%, and is convertible into HEC common stock, at the holder’s option, at a conversion rate of $6.00 per share. The Series A Preferred is neither redeemable nor is it callable. Series A Preferred shareholders may vote their common stock equivalent voting power. We analyzed the Series A Preferred using the guidance contained in ASC 815-40, Derivatives and Hedging, and concluded that the instrument was indexed to our own stock and qualified to be included in stockholders’ equity. | |||||||||||||||||||||||||
In connection with the acquisition of HCN on December 9, 2013, HEC issued 8,188 shares of our Series A Preferred Stock to a former Preferred Stock shareholder of HCN, as described in Note 2 – Acquisitions, above. The value of the preferred stock at issuance was $3,275,200 (8,188 shares at par value of $400). These shares were recorded in equity at par of $3,275,200. Because the Series A preferred stock is immediately convertible, the value of a beneficial conversion feature of $949,808 was immediately recognized as a dividend. During the year ended July 31, 2014, the holder of the Series A Preferred Stock received dividends of $34,254. As of July 31, 2014, additional dividends have not been accrued as liabilities since they were not declared by the Company. | |||||||||||||||||||||||||
Common Stock Issuances | |||||||||||||||||||||||||
During September 2012, we issued 2,830,000 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.) | |||||||||||||||||||||||||
On October 31, 2013, we issued 619,960 shares of common stock to HCN to settle the $2,400,000 Fee as described in Note 8 – Notes Payable, $553,630 of interest and late fees associated with the Fee, and $635,937 of joint interest billings payable to HCN for its work on the Namibian concession. The shares were valued and recorded at $3,589,567, based on the value of the obligations settled. | |||||||||||||||||||||||||
In connection with the acquisition of HCN on December 9, 2013, we issued 8,396,667 shares of our common stock, as described in Note 2 – Acquisitions, above. These common stock shares were recorded in equity at par of $8,397 partially offset by additional paid-in capital of $1,837, as described above in Note 2 – Acquisitions. | |||||||||||||||||||||||||
In conjunction with the HCN acquisition, we issued 7,470,000 shares of our common stock to the former owners of NEI. These shares were contingently-issuable consideration for the acquisition of NEI and we valued them at $31,612,000 and recorded it as Acquisition-related costs - related party expense in September 2012. | |||||||||||||||||||||||||
During the year ended July 31, 2014, we issued 167,904 shares of common stock, to employees and directors for services performed. In conjunction with the issuance of these shares we recognized $813,827 in compensation expense. | |||||||||||||||||||||||||
HCN Series A Preferred Stock | |||||||||||||||||||||||||
On December 3, 2013, before the HEC acquisition of HCN, HCN issued 3,963 shares of its Series A Preferred Stock to Kent Watts, HCN CEO, in order to cancel amounts owed to him for advances he made to the Company in the amount of $1,379,891 plus accrued interest and dividends owed to him of $205,309, totaling $1,585,200. The HCN Series A Preferred Stock provided for cash dividends of 7% per year, payable in either cash or shares of stock, at the Company’s option. During the year ended July 31, 2014, the HCN preferred stock accrued dividends of $39,230, which was satisfied through the issuance of the HCN preferred stock on December 3, 2013. These 3,963 shares of preferred stock plus the previously outstanding 4,225 shares were exchanged for 8,188 shares HEC Series A Preferred Stock, as described above in the acquisition of HCN. | |||||||||||||||||||||||||
Receivables for Common Stock | |||||||||||||||||||||||||
On September 6, 2013, HCN sold 191,667 shares of HEC common stock to an employee of HCN in exchange for a note receivable in the amount of $1,000,000. This HCN employee is the nephew of our current CEO. HEC acquired this receivable upon its acquisition of HCN. The note is non-interest bearing and is payable only upon the sale of the common stock to a third party or HEC stock being listed on either the NASDAQ market or NYSE stock exchange. We will receive 95% of the proceeds up to $1,000,000 if the underlying stock is sold to a third party. Within 90 days of HEC stock being listed on a major market or stock exchange, we will receive up to $1,000,000, or the note can be paid earlier at the discretion of the other party. We collected $675,000 in cash on this note receivable through July 31, 2014. At July 31, 2013, these shares were classified as treasury stock within equity at the cost HCN obtained them from outside entities for services performed following the consolidation of comparative periods for acquired entities under common control (See Note 2 –Acquisitions). These shares of common stock are held in the name of the investors and are beneficially owned by the investors and the shares are not retrievable by the Company. | |||||||||||||||||||||||||
On December 4, 2013 HCN sold 619,960 shares of unregistered and restricted HEC common stock in return for a $1,859,879 non-interest bearing note receivable from an unrelated entity in which Michael Watts has a minority interest. HEC acquired this receivable upon its acquisition of HCN. The 619,960 HEC common stock shares were previously issued by HEC to HCN to settle liabilities due by HEC related to the consulting services agreement described below in Note 6 – Notes Payable. The receivable from the individual is due to HEC upon the following conditions: 1) 100% of the proceeds payable from the sale of all or part of the shares by the owner of the shares to a third party; 2) within sixty days of the six month anniversary of the December 4, 2013 stock sale or within sixty days from the date that the shares become unrestricted (whichever is first); or 3) 100% of any remaining balance due within 90 days of HEC being listed on a major stock exchange and whereby the share price is above $6.00 per share. As with the above receivable for common stock, this receivable for the sale of HEC common stock is classified as a receivable for common stock within equity. These shares of common stock are held in the name of the investors and are beneficially owned by the investors and the shares are not retrievable by the Company. | |||||||||||||||||||||||||
This note receivable was extended on August 4, 2014, for an extension fee of $50,000, payable in the future, with $750,000 due to be repaid by December 31, 2014, with the remaining balance to be repaid by March 31, 2015. These repayment terms may be changed if the Company is successful in being up-listed to either the NYSE or NASDAQ. If this occurs, the entire balance is due within 60 days after an up-listing occurs. | |||||||||||||||||||||||||
Stock Compensation Plans | |||||||||||||||||||||||||
As of July 31, 2014, HEC could grant up to 570,136 shares of common stock under the 2013 Stock Incentive Plan (“2013 Plan”). The Plan is administered by the Compensation Committee of the Board of Directors, or in the absence of a Compensation Committee, the full Board of Directors, which has substantial discretion to determine persons, amounts, time, price, exercise terms, and restrictions of the grants, if any. | |||||||||||||||||||||||||
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. HEC may grant up to 883,333 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 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 | |||||||||||||||||||||||||
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. | |||||||||||||||||||||||||
In February 2013, options to purchase an aggregate of 200,000 shares of common stock with an exercise price of $6.60 per share and a term of ten years were granted to our three independent directors. The options vest at the rate of 20% of such options each six months over the first 30 months following the grant date. 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. | |||||||||||||||||||||||||
In August 2013, 13,333 of the 200,000 options granted to our independent directors became vested and the remainder of the previously unamortized fair value of these options, $16,184, was recognized on the vesting date. The fair 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 53,333 options so that they became fully and immediately vested. The fair value of the options on the date of vesting of $810,738 was recognized immediately as an expense. The fair 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 addition, during October 2013, the final tranche of certain options that had originally been granted to non-employees in April 2011 vested, for which we recognized $60,622 in expense. | |||||||||||||||||||||||||
The following table provides information about options granted to non-employees under our stock incentive plans during the years ended as follows: | |||||||||||||||||||||||||
As of July 31, | 2014 | 2013 | |||||||||||||||||||||||
Number of options granted | - | 200,000 | |||||||||||||||||||||||
Compensation expense recognized | $ | 887,544 | $ | 679,174 | |||||||||||||||||||||
Weighted average exercise price of options granted | N/A | $ | 6.6 | ||||||||||||||||||||||
The following table details the significant assumptions used to compute the fair market values of stock options granted or revalued during the years ended as follows: | |||||||||||||||||||||||||
As of July 31, | 2014 | 2013 | |||||||||||||||||||||||
Risk-free interest rate | N/A | - | N/A | 1.11% | - | 2.00% | |||||||||||||||||||
Dividend yield | 0% | 0% | |||||||||||||||||||||||
Volatility factor | N/A | - | N/A | 140.30% | - | 144.00% | |||||||||||||||||||
Expected life (in years) | N/A | 6.5 | |||||||||||||||||||||||
Based on the fair value of the options as of July 31, 2014, there was no unrecognized compensation costs related to non-vested share based compensation arrangements granted to non-employees. | |||||||||||||||||||||||||
Options granted to employees | |||||||||||||||||||||||||
The following table provides information about options granted to employees under our stock incentive plans. | |||||||||||||||||||||||||
For the year end July 31, | 2014 | 2013 | |||||||||||||||||||||||
Number of options granted | - | - | |||||||||||||||||||||||
Compensation expense recognized | $ | 56,028 | $ | 253,952 | |||||||||||||||||||||
Weighted average exercise price of options granted | N/A | N/A | |||||||||||||||||||||||
During the year ended July 31, 2011, options to purchase 86,667 shares of common stock with an exercise price of $7.50 per share and a term of ten years were granted to five employees. The options vest at the rate of 20% of such option each six months over the first 30 months following the grant date. 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, 2014, we had no unamortized compensation expense associated with options granted to employees, as shares were either cancelled or accelerated as of July 31, 2014. | |||||||||||||||||||||||||
No options were granted to employees during the years ended July 31, 2014 or 2013. | |||||||||||||||||||||||||
Summary information regarding stock options issued and outstanding as follows: | |||||||||||||||||||||||||
Options | Weighted | Aggregate | Weighted | ||||||||||||||||||||||
average share | intrinsic value | average | |||||||||||||||||||||||
price | remaining | ||||||||||||||||||||||||
contractual life | |||||||||||||||||||||||||
(in years) | |||||||||||||||||||||||||
Outstanding at July 31, 2012 | $ | 348,000 | $ | 7.5 | - | 7.22 | |||||||||||||||||||
Granted | 200,000 | 6.6 | |||||||||||||||||||||||
Exercised | - | - | |||||||||||||||||||||||
Expired or forfeited | (36,000 | ) | 7.5 | ||||||||||||||||||||||
Outstanding at July 31, 2013 | 512,000 | 6.81 | - | 7.98 | |||||||||||||||||||||
Granted | - | - | |||||||||||||||||||||||
Exercised | - | - | |||||||||||||||||||||||
Expired or forfeited | (246,667 | ) | 7.5 | ||||||||||||||||||||||
Outstanding at July 31, 2014 | $ | 265,333 | $ | 6.81 | - | 7.95 | |||||||||||||||||||
Exercisable at July 31, 2014 | $ | 265,333 | $ | 6.81 | - | 7.95 | |||||||||||||||||||
Options outstanding and exercisable as of July 31, 2014 as follows: | |||||||||||||||||||||||||
Exercise Price | Outstanding Number of | Remaining Life | Exercisable Number of | ||||||||||||||||||||||
Shares | Shares | ||||||||||||||||||||||||
$ | 6.6 | 200,000 | 8.54 | 200,000 | |||||||||||||||||||||
$ | 7.5 | 53,333 | 6.73 | 53,333 | |||||||||||||||||||||
$ | 7.5 | 4,000 | 4.81 | 4,000 | |||||||||||||||||||||
$ | 7.5 | 8,000 | 2.93 | 8,000 | |||||||||||||||||||||
265,333 | 265,333 | ||||||||||||||||||||||||
Summary information regarding nonvested stock options as of July 31, 2013 is as follows: | |||||||||||||||||||||||||
Exercise Price | Outstanding Number of | Remaining Life | Exercisable Number of | ||||||||||||||||||||||
Shares | Shares | ||||||||||||||||||||||||
$ | 6.6 | 200,000 | 9.54 | - | |||||||||||||||||||||
$ | 7.5 | 265,333 | 7.73 | 212,267 | |||||||||||||||||||||
$ | 7.5 | 20,000 | 3.93 | 20,000 | |||||||||||||||||||||
$ | 7.5 | 8,000 | 5.81 | 8,000 | |||||||||||||||||||||
$ | 7.5 | 18,667 | Less than 1 year | 18,667 | |||||||||||||||||||||
512,000 | 258,933 | ||||||||||||||||||||||||
Summary information regarding nonvested stock options as of July 31, 2014 is as follows: | |||||||||||||||||||||||||
Number of shares | Weighted average grant | ||||||||||||||||||||||||
date fair value | |||||||||||||||||||||||||
Nonvested at July 31, 2013 | 253,067 | $ | 7.41 | ||||||||||||||||||||||
Granted | - | $ | - | ||||||||||||||||||||||
Vested | (6,400 | ) | $ | 7.5 | |||||||||||||||||||||
Forfeited | (246,667 | ) | $ | 7.5 | |||||||||||||||||||||
Nonvested at July 31, 2014 | - | $ | - | ||||||||||||||||||||||
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 former Director and our former Chief Executive Officer and the brother of our current CEO. Under the terms of the agreement, we granted warrants to purchase 400,000 shares of common stock that have a market condition. If our common stock attains a five day average closing price of $22.50 per share, warrants to purchase 200,000 shares with an exercise price of $7.50 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 $45.00 per share, warrants to purchase 200,000 shares with an exercise price of $7.50 and an expiration date of February 15, 2016 shall be exercisable (“Warrant C”). See Note 9 – Fair Value, for details regarding the fair value measurement and fair value methodology related to these warrants. | |||||||||||||||||||||||||
Summary information regarding common stock warrants issued and outstanding as of July 31, 2014, is as follows: | |||||||||||||||||||||||||
Warrants | Weighted Average | Aggregate intrinsic | Weighted average | ||||||||||||||||||||||
Share Price | value | remaining | |||||||||||||||||||||||
contractual life (in | |||||||||||||||||||||||||
years) | |||||||||||||||||||||||||
Outstanding at year ended July 31, 2012 | 1,252,152 | $ | 7.74 | $ | - | 2.83 | |||||||||||||||||||
Granted | - | - | - | - | |||||||||||||||||||||
Exercised | - | - | - | - | |||||||||||||||||||||
Expired | (15,193 | ) | 28.02 | - | - | ||||||||||||||||||||
Outstanding at year ended July 31, 2013 | 1,236,959 | $ | 7.5 | $ | - | 1.87 | |||||||||||||||||||
Granted | - | - | - | - | |||||||||||||||||||||
Exercised | - | - | - | - | |||||||||||||||||||||
Expired | (152,375 | ) | 7.5 | - | - | ||||||||||||||||||||
Outstanding at year ended July 31, 2014 | 1,084,584 | $ | 7.5 | $ | - | 1.04 | |||||||||||||||||||
Warrants outstanding and exercisable as of July 31, 2014: | |||||||||||||||||||||||||
Exercise Price | Outstanding Number | Remaining Life | Exercisable Number | ||||||||||||||||||||||
of Shares | of Shares | ||||||||||||||||||||||||
$ | 7.5 | 666,667 | 2 years or less | 666,667 | |||||||||||||||||||||
$ | 7.5 | 349,117 | 1 year or less | 349,117 | |||||||||||||||||||||
$ | 7.5 | 68,800 | 1 year or less | 68,800 | |||||||||||||||||||||
1,084,584 | 1,084,584 | ||||||||||||||||||||||||
Warrants outstanding and exercisable as of July 31, 2013: | |||||||||||||||||||||||||
Exercise Price | Outstanding Number | Remaining Life | Exercisable Number | ||||||||||||||||||||||
of Shares | of Shares | ||||||||||||||||||||||||
$ | 7.5 | 666,667 | 3 years or less | 266,667 | |||||||||||||||||||||
$ | 7.5 | 417,919 | 2 years or less | 417,919 | |||||||||||||||||||||
$ | 7.5 | 152,373 | 1 year or less | 152,373 | |||||||||||||||||||||
1,236,959 | 836,959 | ||||||||||||||||||||||||
Related_Party_Transactions
Related Party Transactions | 12 Months Ended | ||||||||
Jul. 31, 2014 | |||||||||
Related Party Transactions [Abstract] | ' | ||||||||
Related Party Transactions | ' | ||||||||
Note 11 – Related Party Transactions | |||||||||
During the year ended July 31, 2013, a company controlled by one of our former officers, Carter E & P, LLC (“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 Hydrocarb 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 | 2014 | |||||||
Revenue generated from Barge Canal properties | $ | 643,203 | $ | 39,274 | |||||
Lease operating cost incurred from Barge Canal properties | $ | 224,047 | $ | 23,259 | |||||
Overhead costs incurred | $ | 28,038 | $ | - | |||||
Outstanding accounts receivable at period end | $ | 91,967 | $ | - | |||||
Outstanding accounts payable at year end | $ | - | $ | - | |||||
During the quarter ended October 2012, we purchased NEI for up to 8,396,667 shares of Duma common stock, as described in Note 2 – Acquisitions – Namibia Exploration, Inc. | |||||||||
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 5– Oil and Gas Properties) | |||||||||
The father of the former Chief Financial Officer and a company controlled by the father-in-law of the former Chief Executive Officer and brother to the current CEO, each purchased a 5% working interest in the ST 9-12A #4 well. As of July 31, 2014 and 2013, the company controlled by the father-in-law of the former Chief Executive Officer owed us $58,014 and $84,806, respectively. We also had an advance outstanding from the father of the former Chief Financial Officer, which was reflected in the caption “Due to related parties”, of $0 and $15,046 for the year ended July 31, 2014 and 2013, respectively. | |||||||||
During 2011, we entered into a consulting contract with a company controlled by Michael Watts, the father-in-law of Jeremy Driver, our former Chief Executive Officer and a former Director and the brother of our current CEO, as detailed in Note 10 – Capital Stock. We recognized expense of $196,384 from this contract during the year ended July 31, 2013. The contract terminated in 2014 but was extended by the board of directors indefinitely with zero additional compensation. $6,754 was recognized in the year ended July 31, 2014. | |||||||||
In September 2013, before the HEC acquisition of HCN, HCN sold 191,667 shares of HEC common stock to an HCN employee, our Chairman’s nephew, in exchange for a $1,000,000 note receivable. The company arranged the sales of these shares in anticipation of a possible business combination, in an effort to ensure that the shares would remain as part of public float and therefore continue to be properly included in calculations for exchange-listing criteria and provide a source of funding for company operations. It was anticipated that the purchaser of these shares would, at a subsequent date, sell the referenced shares and attain the ability to pay the receivable. We collected $675,000 on the referenced note receivable through April 30, 2014. Of that amount, $275,000 was derived from the sales of the referenced shares; $400,000 was derived from the proceeds of a loan made to the purchaser of the referenced shares by our Chairman. | |||||||||
In October 2013, prior to our acquisition of HCN, we settled our obligations to HCN under the HCN Consulting Agreement through the issuance of 619,960 shares of HEC. These obligations consisted of the then-outstanding $2,400,000 Fee and $533,630 of interest and late fees associated with the Fee. (See Note 10 – Capital Stock). Further, $25,000 of the related interest and fees was settled in cash. Prior to HEC’s acquisition of HCN, HCN sold these shares to an unrelated entity, in which Michael Watts has a minority interest, for a note receivable of $1,859,879. The company arranged the sales of these shares in anticipation of a possible business combination, in an effort to ensure that the shares would remain as part of public float and therefore continue to be properly included in calculations for exchange-listing criteria and provide a source of funding for company operations. It is anticipated that these shares will eventually be sold and the proceeds of their sales used to pay the receivable. As HCN is now our wholly-owned subsidiary, this receivable for the sale of HEC common stock is classified as receivable for common stock within equity. See discussion of this receivable in Note 10 – Capital Stock – Receivables for Common Stock. On August 8, 2014 our board of Directors resolved to extend this note receivable with [ ] $750,000 to be paid by December 31, 2014 and the balance by March 31, 2015. | |||||||||
In November 2013, we issued a promissory note for funds received from Mr. Kent Watts, Our Chairman, of $100,000. Under the terms of the note, principal on the note was due after one year and incurred interest at 5% per annum payable on a monthly basis. In April 2014, the Company entered into a new debt agreement whereby Mr. Watts agreed to loan the Company up to $600,000 at an interest rate of 6.25%. The previous debt of $100,000 was rolled into this new note. Additonally, we borrowed $200,000 from Mr. Watts during April 2014 and $300,000 from Mr. Watts in May 2014. The total balance on the note was $600,000 as of July 31, 2014. Accrued interest is pavable monthly beginning in May 2014, and beginning in August 2014 the principal is due in 36 monthly payments through July 2017. The note is secured by the Company’s assets owned by GBE, subject to any other lien holder's superior rights, if any. As part of the financing agreement with Shadow Tree, this note has been subordinated, and no payments will be made until the Shadow Tree debt has been repaid. | |||||||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||
Jul. 31, 2014 | |||||||||
Income Taxes [Abstract] | ' | ||||||||
Income Taxes | ' | ||||||||
Note 12- Income Taxes | |||||||||
Our net loss before income taxes totaled $(7,683,932) and $(37,595,653) for the years ended July 31, 2014 and 2013, respectively. We recognized an income tax benefit during the years ended July 31. 2014 and 2013 because the estimated tax liability for the respective previous years exceeded the actual tax liability. | |||||||||
The reconciliation of our income tax provision at the statutory rate to the reported income tax expense is as follows: | |||||||||
As of and For the Year ended July 31, | 2014 | 2013 | |||||||
U.S statutory federal rate | 35 00 | % | 35 | % | |||||
State income tax rate | 0.58 | % | 0.58 | % | |||||
Equity-based compensation | (5.16 | )% | (33.62 | )% | |||||
Gain on derivative warrants | - | % | 0.93 | % | |||||
Gain on sale of securities | - | % | (0.33 | )% | |||||
Other | (6.64 | )% | (0.50 | )% | |||||
Net operating loss | (23.70 | )% | (1.75 | )% | |||||
Effective statutory rate | 0.08 | % | 0.31 | % | |||||
Our deferred income taxes reflect the net tax effects of operating loss, 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 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, 2014 and 2013 are as follows: | |||||||||
As of and For the Year ended July 31. | 2014 | 2013 | |||||||
Stock based compensation | $ | 338,078 | $ | 713,867 | |||||
Property. including depreciable property | (3,122,873 | ) | (2,980,005 | ) | |||||
Asset retirement obligation | 4,168,049 | 3,942,918 | |||||||
Net operating loss carry-forward | 5,596,732 | 3,846,783 | |||||||
Other | 20,860 | 42,368 | |||||||
7,000,846 | 5,565,931 | ||||||||
Valuation allowance for deferred tax assets | (7,000,846 | ) | (5,565.931 | ) | |||||
Total deferred tax assets | $ | - | $ | - | |||||
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. 2014 will significantly increase or decrease within 12 months. | |||||||||
Generally, our income tax years 2010 through 2014 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, 2014, we had approximately $15,732,204 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. | |||||||||
In conjunction with the merger with HCN, we believe we incurred an ownership change within the meaning of Section 382 of the Internal Revenue Code. As a result, applicable federal and state tax law places an annual limitation on the amount of NOLs that may be used. As of the filig date of this report, we have not completed our Section 382 analysis in connection with the merger. | |||||||||
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” could 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, 2014 | |||||||||
Commitments and Contingencies [Abstract] | ' | ||||||||
Commitments and Contingencies | ' | ||||||||
Note 13 – 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. | |||||||||
As of July 31, 2014, we were party to the following legal proceedings: | |||||||||
Cause No. 2011-37552; Strategic American Oil Corporation v. ERG Resources, LLC, et al.; In the 55th District Court, Harris County, Texas. The Company is a plaintiff in this suit. In this case, Company brought claims for injunctive relief, breach of contract and fraudulent inducement against the defendant regarding the purchase of Galveston Bay Energy, LLC from ERG. The Company intends to prosecute its claims and defenses vigorously. As of the date of filing of this report, the Company is no longer seeking injunctive relief. Additionally, the below listed case has been consolidated into this case since the subject matter of the below case is subsumed within the subject matter of this case. From this point forward, there will be only this one piece of litigation. The trial was held in October 2013. The judge ruled in favor of ERG and that Hydrocarb is liable to pay the charges in the below-mentioned case and a portion of ERG’s attorney fees. The Company is in the process of post-trial motions and no judgment has been entered as of this date. As of July 31, 2013, the Company had accrued $232,974 for this cause. | |||||||||
Cause No. 2011-54428; ERG Resources, LLC v. Galveston Bay Energy, LLC, in the 125th Judicial District Court, Harris County, Texas. This case deals with the operating agreements for the processing of product by the entities owned by ERG. It is an action seeking payments of charges and expenses by ERG that are refuted by GBE. The Company intends to prosecute its claims and defenses vigorously. As indicated above, this case has been consolidated into the case listed above. As such, the claims in this case will be decided in cause No. 2011-37552, which was tried in October 2013. | |||||||||
Settlement negotiations on both these matters have been concluded. Galveston Bay has paid $35,000 in cash and Hydrocarb Energy will issue $65,000 in common stock to settle. More than this amount has been accrued previously and no further adjustments will be made to our financial statements. | |||||||||
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 7 – Asset Retirement Obligation) that is estimated using the guidance in ASC 410-20, Asset Retirement and Environmental Obligations. On August 29, 2014, we filed a lawsuit in the state district court in Chambers County, Texas asking the Court to reform an assignment and assumption agreement in the property records of Chambers County. The General Land Office has asserted claims against us under various miscellaneous easements, claiming we are obligated to either renew the easement or remove any pipeline laid in the easement. We have disclaimed any obligations under these easements. | |||||||||
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, 2014 and July 31, 2013, $150,000 has been recognized and is included in the balance sheet caption “Accounts payable and accrued expenses.” | |||||||||
Commitments | |||||||||
In March 2011, we executed a lease for office space in Houston, Texas. The lease term was three years and we had an option to extend the lease for an additional three years. Our scheduled rent was $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. We did not extend this lease, but entered into a sublease arrangement with Greenshale LLC for office space in the same building. During September 2013, we terminated our lease for office space in Corpus Christi, Texas. | |||||||||
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. | |||||||||
Rent expense during the years ended July 31, 2014 and 2013 was $186,463 and $211,346, respectively. See Note 8 – Notes Payable for details regarding our commitments related to our future obligations. | |||||||||
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 $120,000 issued by Green Bank. These letters of credit are 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, 2014 and 2013 we prepaid the fees associated with the Greenbank letters of credit for the respective year interest upfront and amortized these fees on a straight-line basis over their respective annual periods. The following table reflects the prepaid balances as follows: | |||||||||
July 31, | 2014 | 2013 | |||||||
Prepaid letter of credit feees | $ | 101,251 | $ | 101,850 | |||||
Amortization | (8,488 | ) | (8,488 | ) | |||||
Net prepaid letter of credit fees | $ | 92,763 | $ | 93,362 |
Additional_Financial_Statement
Additional Financial Statement Information | 12 Months Ended | |||||||||
Jul. 31, 2014 | ||||||||||
Additional Financial Statement Information [Abstract] | ' | |||||||||
Additional Financial Statement Information | ' | |||||||||
Note 14 – 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, 2014 and 2013, we have reserved $70,742 and $58,585, respectively, for potentially uncollectable other receivables. | ||||||||||
Other current assets | ||||||||||
Other current assets consisted of the following: | ||||||||||
As of July July 31, | 2014 | 2013 | ||||||||
Prepaid letter of credit fees | 92,763 | 93,362 | ||||||||
Prepaid insurance | 287,743 | 184,138 | ||||||||
Other prepaid expenses | 63,143 | 11,101 | ||||||||
Cash call paid to operator | - | 24,225 | ||||||||
Prepaid land use fees | - | 28,728 | ||||||||
Accrued interest income | 2,671 | 4,388 | ||||||||
Other current assets | 446,320 | 345,942 | ||||||||
Property and Equipment | ||||||||||
Property and equipment consisted of the following: | ||||||||||
As of July 31, | 2014 | 2013 | ||||||||
Furniture and fixtures | 5 years | $ | 24,085 | $ | 8,814 | |||||
Marine vessels | 5 years | 109,742 | 17,614 | |||||||
Vehicles | 5 years | 40,496 | 65,807 | |||||||
Computer equipment and software | 2 years | 126,143 | 82,466 | |||||||
Leasehold improvements | 2 years | 2,087 | - | |||||||
Other depreciable property | 2 years | - | 297 | |||||||
Total property and equipment | 302,553 | 174,998 | ||||||||
Less accumulated depreciation | (135,590 | ) | (116,945 | ) | ||||||
Net book value | $ | 166,963 | $ | 58,053 | ||||||
Depreciation expense | $ | 36,894 | $ | 61,215 | ||||||
Accounts payable and accrued expenses | ||||||||||
Accounts payable and accrued expenses consisted of the following: | ||||||||||
As of July 31, | 2014 | 2013 | ||||||||
Trade payables | 2,567,324 | 2,503,820 | ||||||||
Accrued payroll | 43,578 | 151,577 | ||||||||
Accrued interest and fees | 37,853 | 500 | ||||||||
Revenue payable | 5,790 | 4,717 | ||||||||
Local taxes and royalty payable | 111,699 | 128,470 | ||||||||
Federal and state income taxes payable | 29,431 | 27,000 | ||||||||
Total accounts payable and accrued expenses | 2,795,675 | 2,816,084 | ||||||||
Subsequent_Events
Subsequent Events | 12 Months Ended |
Jul. 31, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Note 15 – Subsequent Events | |
Effective August 15, 2014, we entered into a Credit Agreement (the “Credit Agreement”) as borrower, along with Shadow Tree Capital Management, LLC, as agent (the “Agent”), and certain lender parties thereto (the “Lenders”). Pursuant to the Credit Agreement, the Lenders loaned us $4 million, which was represented by Term Loan Notes in an aggregate amount of $4,545,454 (the “Notes”), representing an original issue discount of 12%. We also paid the Lenders a structuring fee of $90,909 equal to 2% of the principal amount of the Notes (the “Structuring Fee”) and agreed to reimburse the Lenders for all reasonable and documented fees, costs and expenses associated with the Credit Agreement, which totaled $172,824 in aggregate. Finally, we paid ROTH Capital Partners, LLC, a placement fee of 5% of the total value of the Loans ($227,273), as placement agent and Gary W. Vick, a consulting fee of 1% of the face value of the Loans ($45,455) for consulting services rendered. As a result of the payments above, the net amount of funding received from the Loans was $3,463,539. | |
Effective November 6, 2014, settlement negotiations with respect to the ERG Resources lawsuit have been concluded. Galveston Bay Energy has paid $35,000 in cash and Hydrocarb Energy will issue 65,000 in common stock to settle. More than this amount has been accrued previously and no further adjustments will be made to our financial statements. | |
Pursuant to the Credit Agreement, we have the right, at any time prior to the one year anniversary of the Credit Agreement, to borrow up to an additional $1,000,000 under the Credit Agreement (the “Additional Loan”), subject to certain pre-requisites and requirements as set forth in the Credit Agreement, including, but not limited to us raising $750,000 through the sale of equity subsequent to the closing of the transactions contemplated by the Credit Agreement (which we agreed to obtain within 150 days of the date of the Credit Agreement). We also agreed to pay a 2% Structuring Fee on the Additional Loan. The proceeds of the Additional Loan may only be used for the Oil and Gas Activities. | |
The amount owed pursuant to the Notes (and any amount borrowed pursuant to the Additional Loan) is guaranteed by our wholly-owned subsidiary, Hydrocarb Corporation (“HC”) and its subsidiaries, and our other wholly-owned subsidiaries and is secured by a first priority security interest in substantially all of our assets (including, but not limited to the securities of our subsidiaries and HC and its subsidiaries) evidenced by a Guarantee and Collateral Agreement, various pledge agreements and a deed of trust providing the Agent, as agent for the Lenders, a security interest over our oil and gas assets and rights. | |
The Notes do not accrue any interest for the first nine months after their issuance date (August 15, 2014), provided thereafter they accrue interest at the rate of (a) 16% per annum where the average net monthly oil and gas production revenues of Galveston Bay Energy LLC, our wholly-owned subsidiary, for the trailing three month period (the “Trailing Three Month Revenues”) is less than $900,000; or (b) 14% per annum, where the Trailing Three Month Revenues are equal to or greater than $900,000, payable monthly in arrears through the maturity date of such Notes, August 15, 2016. The Additional Loan, if any, will bear interest at the rate of 14% per annum, payable monthly in arrears, and will have the same maturity date as the Notes. Upon the occurrence of an event of default, the Notes (and any amount outstanding under the Additional Loan) will bear interest at the rate of 24% per annum until paid in full. | |
Pursuant to the Credit Agreement, we agreed to issue the Lenders their pro rata share of (a) 60,000 restricted shares of common stock on the effective date of the Credit Agreement, August 15, 2014 (the “Effective Date”); (b) 32,500 restricted shares in the event any amount of the Loans (or other obligations outstanding under agreements entered into in connection with the Loans, the “Loan Documents”) are outstanding on the 12 month anniversary of the Effective Date; (c) 32,500 restricted shares in the event any amount is outstanding under the Loan Documents on the 18 month anniversary of the Effective Date; and (d) 25,000 restricted shares in the event any amount is outstanding under the Loan Documents on the 21 month anniversary of the Effective Date. The shares are to be issued pursuant to the terms and conditions of a Stock Grant Agreement, pursuant to which each of the Lenders made certain representations to the Company regarding their financial condition and other items in order for the Company to confirm that an exemption from registration existed and will exist for such issuances. | |
The Credit Agreement contains customary representations, warranties, covenants and requirements for the Company to indemnify the Lenders, Agent and their affiliates. The Credit Agreement also includes various covenants (positive and negative) binding upon the Company (and its subsidiaries), including but not limited to, requiring that the Company comply with certain reporting requirements, and provide notices of material corporate events and forecasts to Agent, and prohibiting us from (i) incurring any additional debt; (ii) creating any liens; (iii) making any investments; (iv) materially changing our business; (v) repaying outstanding debt; (vi) affecting a business combination, sale or transfer; (vii) undertaking transactions with affiliates; (viii) amending our organizational documents; (ix) forming subsidiaries; or (x) taking any action not in the usual course of business, in each case except as set forth in the Credit Agreement. | |
The Credit Agreement includes customary events of default for facilities of a similar nature and size as the Credit Agreement, including, but not limited to, if any breach or default occurs under the Loan Documents, the failure of the Company to pay any amount when due under the Loan Documents, if the Company (or its subsidiaries) is subject to any judgment in excess of $250,000 which is not discharged or stayed within 30 days, or if a change in control of the Company, any subsidiary or any guarantor should occur, defined for purposes of the Credit Agreement as any transfer of 25% or more of the voting stock of such entity. |
Supplemental_Oil_and_Gas_Infor
Supplemental Oil and Gas Information (Unaudited) | 12 Months Ended | ||||||||||||
Jul. 31, 2014 | |||||||||||||
Supplemental Oil And Gas Information Unaudited [Abstract] | ' | ||||||||||||
Supplemental Oil and Gas Information (Unaudited) | ' | ||||||||||||
Note 16 – 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 and crude oil 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. The oil price as of July 31, 2014 and 2014 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 $100.11 and $92.52 per barrel, respectively. The gas price as of July 31, 2014 and 2013 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 $4.10 and $3.51 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, 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 | ||||||||||
Revisions of previous estimates | 422,261 | 4,477 | 2,538,043 | ||||||||||
Sale of reserves in place | (17,750 | ) | (529,937 | ) | (636,437 | ) | |||||||
Production | (42,436 | ) | (173,569 | ) | (428,185 | ) | |||||||
Balance – July 31, 2014 | 1,021,775 | 12,031,361 | 18,162,011 | ||||||||||
Oil | Gas | Total | |||||||||||
Proved Reserves as of July 31, 2014 | (Barrels) | (Mcf) | (Mcfe) | ||||||||||
Proved developed producing | 200,981 | 969,940 | 2,175,826 | ||||||||||
Proved developed non-producing | 212,320 | 4,813,192 | 6,087,112 | ||||||||||
Proved undeveloped | 608,474 | 6,248,229 | 9,899,073 | ||||||||||
Total proved reserves | 1,021,775 | 12,031,361 | 18,162,011 | ||||||||||
Oil | Gas | Total | |||||||||||
Proved Reserves as of July 31, 2013 | (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 developed producing and proved developed non-producing reserves decreased from July 31, 2014 to July 31, 2013 as a result of changes in estimates, based on current information. The increase in proved undeveloped reserves was a result of an increase in certain previously estimated reserves in the Galveston Bay, Texas property. | |||||||||||||
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. | |||||||||||||
For the year ended July 31, | 2014 | 2013 | |||||||||||
Unevaluated properties | $ | 2,119,769 | $ | 713,655 | |||||||||
Evaluated properties | 19,153,124 | 19,857,842 | |||||||||||
Less impairment | (373,335 | ) | (373,335 | ) | |||||||||
20,899,558 | 20,609,312 | ||||||||||||
Less depreciation, depletion, and amortization | (3,491,420 | ) | (2,617,478 | ) | |||||||||
Net capitalized cost | $ | 17,408,139 | $ | 17,580,684 | |||||||||
Costs Incurred in Oil and Gas Activities | |||||||||||||
Costs incurred in property acquisition, exploration and development activities for the year ended July 31, 2014 were as follows. | |||||||||||||
Total | Namibia | USA | |||||||||||
Property acquisition | |||||||||||||
Unproved | $ | 1,232,815 | $ | 1,232,815 | $ | - | |||||||
Proved | 13 | - | 13 | ||||||||||
Exploration | 238,112 | 173,299 | 64,813 | ||||||||||
Development | - | - | - | ||||||||||
Cost recovery | (658,195 | ) | - | (658,195 | ) | ||||||||
Total costs incurred | $ | 812,745 | $ | 1,406,114 | $ | (593,369 | ) | ||||||
Costs incurred in property acquisition, exploration, and development activities for the year ended July 31, 2013 were all incurred in the USA. The following table provides information about the costs incurred: | |||||||||||||
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 Excluded | |||||||||||||
Our excluded costs as of July 31, 2014 and 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, 2014 and 2013 were as follows, and were incurred during the respective years noted below. | |||||||||||||
Costs Excluded by Year Incurred | |||||||||||||
As of July 31, | 2014 | 2013 | |||||||||||
Property acquisition | $ | 1,232,815 | $ | 677,795 | |||||||||
Exploration | 173,299 | 35,860 | |||||||||||
Total | $ | 1,406,114 | $ | 713,655 | |||||||||
Costs excluded as of July 31, 2013 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 | USA | ||||||||||||
Balance at July 31, 2012 | $ | - | $ | 265,639 | |||||||||
Additional Cost Incurred | 713,655 | 278,090 | |||||||||||
Cost recovery | - | (132,662 | ) | ||||||||||
Costs Transferred to DD&A Pool | - | (411,067 | ) | ||||||||||
Balance at July 31, 2013 | 713,655 | - | |||||||||||
Additional Cost Incurred | 1,406,114 | - | |||||||||||
Balance at July 31, 2014 | $ | 2,119,769.00 | $ | - | |||||||||
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: | |||||||||||||
For the year ended July 31, | 2014 | 2013 | |||||||||||
Future cash inflows | $ | 159,283,690 | $ | 113,603,450 | |||||||||
Future production costs | (54,437,098 | ) | (55,897,070 | ) | |||||||||
Future development costs | (43,054,816 | ) | (41,794,284 | ) | |||||||||
Future income tax expenses | (21,627,122 | ) | (5,569,234 | ) | |||||||||
40,164,654 | 10,342,862 | ||||||||||||
10% annual discount for estimated timing of cash flows | (15,807,988 | ) | (3,990,069 | ) | |||||||||
Future net cash flows at end of year | $ | 24,356,666 | $ | 6,352,793 | |||||||||
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, 2014: | |||||||||||||
2014 | 2013 | ||||||||||||
Standardized measure of discounted future net cash flows at beginning of year | $ | 6,352,793 | $ | 33,663,886 | |||||||||
Net changes in prices and production costs | 20,980,014 | (37,623,010 | ) | ||||||||||
Changes in estimated future development costs | (764,412 | ) | 4,205,045 | ||||||||||
Sales of oil and gas produced, net of production costs | (151,783 | ) | (2,510,339 | ) | |||||||||
Discoveries and extensions | - | - | |||||||||||
Purchases of minerals in place | - | - | |||||||||||
Sales of minerals in place | (2,228,023 | ) | (17 | ) | |||||||||
Revisions of previous quantity estimates | 8,885,117 | (12,391,911 | ) | ||||||||||
Development costs incurred | - | 1,124,107 | |||||||||||
Change in income taxes | (9,694,393 | ) | 14,705,973 | ||||||||||
Accretion of discount | 977,353 | 5,179,059 | |||||||||||
Standardized measure of discounted future net cash flows at year end | $ | 24,356,666 | $ | 6,352,793 | |||||||||
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 | |||||||||||||
For the year ended July 31, | 2014 | 2013 | |||||||||||
Net revenues from production | $ | 5,065,096 | $ | 7,070,540 | |||||||||
Expenses | |||||||||||||
Lease operating expense | 4,913,313 | 4,560,201 | |||||||||||
Accretion | 1,043,928 | 1,056,508 | |||||||||||
Operating expenses | 5,957,241 | 5,616,709 | |||||||||||
Depreciation, depletion and amortization | 873,942 | 1,059,803 | |||||||||||
Total expenses | 6,831,183 | 6,676,512 | |||||||||||
Income before income tax | (1,766,087 | ) | 394,028 | ||||||||||
Income tax expense | - | (137,910 | ) | ||||||||||
Results of operations | $ | (1,766,087 | ) | $ | 256,118 | ||||||||
Depreciation, depletion and amortization rate per net equivalent MCFE | $ | 2.04 | $ | 1.95 | |||||||||
Description_of_Business_and_Su1
Description of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |
Jul. 31, 2014 | ||
Description of Business and Summary of Significant Accounting Policies [Abstract] | ' | |
Description of business and basis of presentation | ' | |
Description of business and basis of presentation | ||
We are a natural resource exploration and production company engaged in the exploration, acquisition, development, and production of oil and gas properties in the United States and onshore in Namibia, Africa. We were incorporated under the laws of the State of Nevada on April 12, 2005 under the name “Carlin Gold Corporation”. On July 19, 2005, we changed our name to “Nevada Gold Corp.” On October 18, 2005, we changed our name to “Gulf States Energy, Inc.” and increased our authorized capital from 100,000,000 shares of common stock to 500,000,000 shares of common stock, par value $0.001 per share. On September 5, 2006, we changed our name to “Strategic American Oil Corporation”. On April 4, 2012 we completed a one new share for twenty-five old share (1:25) reverse stock split and as a result our authorized capital decreased from 500,000,000 shares of common stock to 20,000,000 shares of common stock. Also, effective April 4, 2012, we changed our name to “Duma Energy Corp.” Effective May 16, 2012, we increased our authorized capital from 20,000,000 shares to 500,000,000 shares of common stock. Effective November 29, 2013, the Company increased the number of its authorized shares of common stock from 500,000,000 to 1,000,000,000 shares of common stock. Effective February 18, 2014, we changed our name from Duma Energy Corp. to Hydrocarb Energy Corp. Effective May 8, 2014, we effected a 1:3 reverse split of our authorized common stock and a corresponding 1:3 reverse split of our outstanding common stock. All share and per share amounts for all periods in this report have been retroactively restated to reflect the reverse split. Our capitalization at July 31, 2014 was 333,333,334 authorized common shares with a par value of $0.001 per share. Our common stock is quoted under the symbol “HECC” on the OTCBB. | ||
The acquisition of HCN, an entity under common control, on December 9, 2013 (See Note 2 – HCN Acquisition) has resulted in a change in the reporting entity. The consolidated financial statements presented for the periods subsequent to the acquisition include the accounts of HCN and its subsidiaries. As HEC and HCN are under the common control of same shareholder group, the acquired assets and liabilities were recorded at the historical carrying value and the consolidated financial statements were retroactively restated to reflect the Company as if HCN had been owned since the beginning of the earliest period presented. | ||
We own 100% of the issued and outstanding share capital of (i) Penasco Petroleum Inc., a Nevada corporation, (ii) Galveston Bay Energy, LLC, a Texas limited liability company, (iii) SPE Navigation I, LLC, a Nevada limited liability company, (iv) Namibia Exploration, Inc., a Nevada corporation, (v) Hydrocarb Corporation, a Nevada corporation, (vi) Hydrocarb Texas Corporation, a Texas corporation, and (vii) Hydrocarb Namibia Energy (Pty) Limited, a company chartered in the Republic of Namibia. In addition, we own 95% of the issued and outstanding share capital of Otaiba Hydrocarb LLC, a UAE limited liability corporation. | ||
As of July 31, 2014, we maintain developed acreage offshore in Texas. As of July 31, 2014, we were producing oil and gas from our working interest in four offshore fields in Galveston Bay, Texas. During September 2012, we acquired, through the acquisition of Namibia Exploration Inc., a 39% non-operated working interest in a concession located onshore in Namibia, Africa. During December 2013, with our acquisition of Hydrocarb Corporation, we acquired 51% working interest in this onshore Namibia, Africa concession and now own 90% working interest (100% cost responsibility) in the Namibia, Africa concession. | ||
Reclassifications | ' | |
Reclassifications | ||
Certain prior year amounts have been reclassified to conform with the current presentation. | ||
Principles of consolidation | ' | |
Principles of consolidation | ||
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”). The accompanying consolidated financial statements include the accounts of Hydrocarb Energy Corp., our wholly owned subsidiaries Penasco Petroleum Corporation (“Penasco”), SPE Navigation I, LLC (“SPE”), Galveston Bay Energy, LLC (“GBE”), Namibia Exploration, Inc. (“NEI”), Hydrocarb Corporation (“HCN”), Hydrocarb Texas Corporation, and Hydrocarb Namibia Energy (Pty) Limited. In addition, these financials include our 95% ownership interest in Otaiba Hydrocarb LLC. 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 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 our former Chief Financial Officer, the former Chief Executive Officer and the current Chief Executive Officer. This balance also includes an oil and gas receivable from Lifestream, LLC, a company owned by the brother of our current CEO. | ||
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, 2014 and 2013, we have reserved $70,742 and $58,585, 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, 2014, 83% of our revenue was attributable to one purchaser. At July 31, 2014, this same purchaser accounted for 88% of our accounts receivable. 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. | ||
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, 2014 and July 31, 2013, 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, 2014 and 2013, restricted cash totaled $6,877,944 and $6,920,739, respectively. | ||
Other assets | ' | |
Other assets | ||
Other assets at July 31, 2014 and 2013 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, 2014 and 2013, 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, 2014 and 2013, advances totaled $195,904 and $180,804, 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 valorem 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, 2014 or July 31, 2013. 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 May 8, 2014, we affected a 1-for-3 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, 2014 and 2013, 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 13 - 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. | ||
Recent accounting pronouncements | ' | |
Recent accounting pronouncements | ||
In March 2013, the FASB amended ACS 830, Foreign Currency Matters, to clarify the appropriate accounting when a parent ceases to have a controlling interest in a subsidiary or group of assets that is a business within a foreign entity. This clarification provides that the cumulative translation adjustment should only be released into net income if the loss of controlling interest represents complete or substantially complete liquidation of the foreign entity in which the subsidiary or asset group had resided. This amendment is effective for us starting with our first quarter of fiscal year 2015 and adoption would impact our consolidated financial condition and results of operations if we dispose of a foreign entity. | ||
In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (“ASU No. 2014-09”), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance when it becomes effective. This new standard is effective for us starting with our first quarter of fiscal year 2018. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. | ||
Other 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_Tables
Acquisitions (Tables) | 12 Months Ended | ||||
Jul. 31, 2014 | |||||
Acquisitions [Abstract] | ' | ||||
Summary of Pro Forma Information | ' | ||||
Summary of the accounting entry to record this acquisition in December 2013 is as follows: | |||||
Assets acquired | $ | 1,529,246 | |||
Liabilities assumed | (161,599 | ) | |||
Noncontrolling interest in 95% owned HCN subsidiary | 30,480 | ||||
$ | 1,398,127 | ||||
Series A 7% Preferred Stock, par $400 | $ | 3,275,200 | |||
Common stock, at par | 8,397 | ||||
Receivable for common stock | (2,484,879 | ) | |||
Additional paid-in capital | 599,409 | ||||
$ | 1,398,127 | ||||
Supplemental_Cash_Flow_Informa1
Supplemental Cash Flow Information (Tables) | 12 Months Ended | ||||||||
Jul. 31, 2014 | |||||||||
Supplemental Cash Flow Information [Abstract] | ' | ||||||||
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block] | ' | ||||||||
As of and For the year ended July 31, | 2014 | 2013 | |||||||
SUPPLEMENTAL CASH FLOW INFORMATION | |||||||||
Cash paid during the period for: | |||||||||
Income taxes | $ | 10,000 | $ | 42,483 | |||||
Interest | $ | 21,497 | $ | 207,269 | |||||
NONCASH INVESTING AND FINANCING ACTIVITIES | |||||||||
Issuance of HEC common stock to setle notes payable | $ | 3,589,567 | - | ||||||
Preferred stock exchanged for HCN preferred stock for acquisition of HCN | $ | 3,275,200 | $ | - | |||||
Receivable for common stock | $ | 1,859,879 | $ | - | |||||
Settlement of HCN debt with HCN preferred stock | $ | 1,585,200 | $ | 1,690,000 | |||||
Receivable for common stock - related party | $ | 1,000,000 | $ | - | |||||
Note payable for prepaid insurance | $ | 403,104 | $ | 260,905 | |||||
Asset retirement obligation sold | $ | 33,195 | $ | 438 | |||||
Common stock exchanged for HCN common stock for acquisition of HCN | $ | 8,397 | $ | - | |||||
Common stock issued to satisfy contingently issuable shares from 2012 acquisition of Namibia Exploration , Inc. | $ | 7,470 | $ | - | |||||
Asset retirement obligations - change in estimate | $ | (104,237 | ) | $ | 786,120 | ||||
Treasury stock acquired via note receivable | $ | - | $ | 822,250 | |||||
Acquisition of Namibia Exploration, Inc. | $ | - | $ | 562,048 | |||||
Expiration of derivative warrant liability | $ | - | $ | 269,164 | |||||
Accounts payable for oil and gas properties | $ | - | $ | 188,607 | |||||
Asset retirement obligations incurred | $ | - | $ | 26,500 | |||||
Oil_and_Gas_Properties_Tables
Oil and Gas Properties (Tables) | 12 Months Ended | ||||||||
Jul. 31, 2014 | |||||||||
Oil and Gas Properties [Abstract] | ' | ||||||||
Schedule of Oil and Natural Gas Properties | ' | ||||||||
Oil and natural gas properties consisted of the following: | |||||||||
For the year ended July 31, | 2014 | 2013 | |||||||
Evaluated Properties | |||||||||
Costs subject to depletion | $ | 19,153,125 | $ | 19,857,842 | |||||
Accumulated impairment | (373,335 | ) | (373,335 | ) | |||||
Accumulated depletion | (3,491,420 | ) | (2,617,478 | ) | |||||
Total evaluated properties | 15,288,370 | 16,867,029 | |||||||
Unevaluated properties | 2,119,769 | 1,124,805 | |||||||
Net oil and gas properties | $ | 17,408,139 | $ | 17,991,834 | |||||
Asset_Retirement_Obligation_Ta
Asset Retirement Obligation (Tables) | 12 Months Ended | ||||||||||||||||||||
Jul. 31, 2014 | |||||||||||||||||||||
Asset Retirement Obligation [Abstract] | ' | ||||||||||||||||||||
Reconciliation of Asset Retirement Obligation | ' | ||||||||||||||||||||
The following is a reconciliation of our asset retirement obligation liability as of July 31, 2014 and 2013, respectively. | |||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
czReconciliation of asset retirement obligation balance | |||||||||||||||||||||
Liability for asset retirement obligation, beginning of period | $ | 10,933,398 | $ | 9,382,933 | |||||||||||||||||
Asset retirement obligations sold | (33,195 | ) | (438 | ) | |||||||||||||||||
Asset retirement obligations incurred on properties drilled | - | 26,500 | |||||||||||||||||||
Accretion | 1,043,928 | 1,056,508 | |||||||||||||||||||
Revisions in estimated cash flows | (104,237 | ) | 786,120 | ||||||||||||||||||
Costs incurred | (123,664 | ) | (318,225 | ) | |||||||||||||||||
Liability for asset retirement obligation, end of period | $ | 11,716,230 | $ | 10,933,398 | |||||||||||||||||
Current portion of asset retirement obligation | $ | 1,133,690 | $ | 724,374 | |||||||||||||||||
Noncurrent portion of asset retirement obligation | 10,582,540 | 10,209,024 | |||||||||||||||||||
Total liability for asset retirement obligation | $ | 11,716,230 | $ | 10,933,398 | |||||||||||||||||
Estimated Timing of asset retirement obligation payments | ' | ||||||||||||||||||||
Estimated Timing of asset retirement obligation payments: | |||||||||||||||||||||
Fiscal Year | Pipelines | Easements | Wellbores | Facilities | Total | ||||||||||||||||
2015 | $ | 126,290 | $ | - | $ | 997,400 | $ | 10,000 | $ | 1,133,690 | |||||||||||
2016 | $ | 60,000 | $ | 27,516 | $ | 639,725 | $ | - | $ | 727,241 | |||||||||||
2017 | $ | 99,938 | $ | 66,006 | $ | 191,476 | $ | 837,436 | $ | 1,194,856 | |||||||||||
2018 | $ | 55,040 | $ | 14,475 | $ | 548,700 | $ | - | $ | 618,215 | |||||||||||
2019 | $ | 52,621 | $ | 10,429 | $ | 572,337 | $ | 221,757 | $ | 857,144 | |||||||||||
2020 to 2024 | $ | 980,713 | $ | 193,283 | $ | 2,269,781 | $ | 848,211 | $ | 4,291,988 | |||||||||||
2025 to 2029 | $ | 236,898 | $ | 67,089 | $ | 1,356,391 | $ | $ | 1,660,378 | ||||||||||||
2030 to 2034 | $ | 44,439 | $ | 145,197 | $ | 143,578 | $ | 899,504 | $ | 1,232,718 | |||||||||||
Thereafter | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||
Total | $ | 1,655,939 | $ | 523,995.06 | $ | 6,719,388 | $ | 2,816,908 | $ | 11,716,230 | |||||||||||
Notes_Payable_Tables
Notes Payable (Tables) | 12 Months Ended | ||||||||||||
Jul. 31, 2014 | |||||||||||||
Notes Payable [Abstract] | ' | ||||||||||||
Maturities of long term debt obligation | ' | ||||||||||||
Maturities of our long term debt obligation at July 31, 2014 are as follows: | |||||||||||||
Year ending July 31, | 2015 | Thereafter | Total | ||||||||||
Operating and capital leases | $ | - | $ | - | $ | - | |||||||
Notes payable | 334,688 | - | 334,688 | ||||||||||
Total | $ | 334,688 | $ | - | $ | 334,688 |
Fair_Value_Tables
Fair Value (Tables) | 12 Months Ended | ||||||||
Jul. 31, 2014 | |||||||||
Fair Value [Abstract] | ' | ||||||||
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 as follows: | |||||||||
As of July 31, | 2014 | 2013 | |||||||
Beginning of period | $ | - | $ | 1,325,388 | |||||
Expiration of derivative warrant feature | - | (269,164 | ) | ||||||
Unrealized gain on changes in fair value of derivative liability | - | (1,056,224 | ) | ||||||
End of period | $ | - | $ | - |
Capital_Stock_Tables
Capital Stock (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Jul. 31, 2014 | |||||||||||||||||||||||||
Capital Stock [Abstract] | ' | ||||||||||||||||||||||||
Warrants Granted to Related Parties | ' | ||||||||||||||||||||||||
The following reflects the fair value at the end of the derived service period for each of the warrants. | |||||||||||||||||||||||||
Warrant B | Warrant C | ||||||||||||||||||||||||
Fair Value | $ | 266,017 | $ | 206,245 | |||||||||||||||||||||
The following table reflects information regarding Warrant B and Warrant C during the year ended July 31, 2014 and 2013. | |||||||||||||||||||||||||
31-Jul-14 | 31-Jul-13 | ||||||||||||||||||||||||
Warrant B | Warrant C | ||||||||||||||||||||||||
Compensation Expense recognized | $ | 6,754 | $ | 196,384 | |||||||||||||||||||||
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 as follows: | |||||||||||||||||||||||||
As of July 31, | 2014 | 2013 | |||||||||||||||||||||||
Number of options granted | - | 200,000 | |||||||||||||||||||||||
Compensation expense recognized | $ | 887,544 | $ | 679,174 | |||||||||||||||||||||
Weighted average exercise price of options granted | N/A | $ | 6.6 | ||||||||||||||||||||||
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 as follows: | |||||||||||||||||||||||||
As of July 31, | 2014 | 2013 | |||||||||||||||||||||||
Risk-free interest rate | N/A | - | N/A | 1.11% | - | 2.00% | |||||||||||||||||||
Dividend yield | 0% | 0% | |||||||||||||||||||||||
Volatility factor | N/A | - | N/A | 140.30% | - | 144.00% | |||||||||||||||||||
Expected life (in years) | N/A | 6.5 | |||||||||||||||||||||||
Stock Options Granted to Employees Under Stock Incentive Plans | ' | ||||||||||||||||||||||||
The following table provides information about options granted to employees under our stock incentive plans. | |||||||||||||||||||||||||
For the year end July 31, | 2014 | 2013 | |||||||||||||||||||||||
Number of options granted | - | - | |||||||||||||||||||||||
Compensation expense recognized | $ | 56,028 | $ | 253,952 | |||||||||||||||||||||
Weighted average exercise price of options granted | N/A | N/A | |||||||||||||||||||||||
Stock Option Activity Under Stock Option and Incentive Plans | ' | ||||||||||||||||||||||||
Summary information regarding stock options issued and outstanding as follows: | |||||||||||||||||||||||||
Options | Weighted | Aggregate | Weighted | ||||||||||||||||||||||
average share | intrinsic value | average | |||||||||||||||||||||||
price | remaining | ||||||||||||||||||||||||
contractual life | |||||||||||||||||||||||||
(in years) | |||||||||||||||||||||||||
Outstanding at July 31, 2012 | $ | 348,000 | $ | 7.5 | - | 7.22 | |||||||||||||||||||
Granted | 200,000 | 6.6 | |||||||||||||||||||||||
Exercised | - | - | |||||||||||||||||||||||
Expired or forfeited | (36,000 | ) | 7.5 | ||||||||||||||||||||||
Outstanding at July 31, 2013 | 512,000 | 6.81 | - | 7.98 | |||||||||||||||||||||
Granted | - | - | |||||||||||||||||||||||
Exercised | - | - | |||||||||||||||||||||||
Expired or forfeited | (246,667 | ) | 7.5 | ||||||||||||||||||||||
Outstanding at July 31, 2014 | $ | 265,333 | $ | 6.81 | - | 7.95 | |||||||||||||||||||
Exercisable at July 31, 2014 | $ | 265,333 | $ | 6.81 | - | 7.95 | |||||||||||||||||||
Schedule of Stock Options Outstanding and Exercisable | ' | ||||||||||||||||||||||||
Options outstanding and exercisable as of July 31, 2014 as follows: | |||||||||||||||||||||||||
Exercise Price | Outstanding Number of | Remaining Life | Exercisable Number of | ||||||||||||||||||||||
Shares | Shares | ||||||||||||||||||||||||
$ | 6.6 | 200,000 | 8.54 | 200,000 | |||||||||||||||||||||
$ | 7.5 | 53,333 | 6.73 | 53,333 | |||||||||||||||||||||
$ | 7.5 | 4,000 | 4.81 | 4,000 | |||||||||||||||||||||
$ | 7.5 | 8,000 | 2.93 | 8,000 | |||||||||||||||||||||
265,333 | 265,333 | ||||||||||||||||||||||||
Summary information regarding nonvested stock options as of July 31, 2013 is as follows: | |||||||||||||||||||||||||
Exercise Price | Outstanding Number of | Remaining Life | Exercisable Number of | ||||||||||||||||||||||
Shares | Shares | ||||||||||||||||||||||||
$ | 6.6 | 200,000 | 9.54 | - | |||||||||||||||||||||
$ | 7.5 | 265,333 | 7.73 | 212,267 | |||||||||||||||||||||
$ | 7.5 | 20,000 | 3.93 | 20,000 | |||||||||||||||||||||
$ | 7.5 | 8,000 | 5.81 | 8,000 | |||||||||||||||||||||
$ | 7.5 | 18,667 | Less than 1 year | 18,667 | |||||||||||||||||||||
512,000 | 258,933 | ||||||||||||||||||||||||
Schedule of Nonvested Share Activity | ' | ||||||||||||||||||||||||
Summary information regarding nonvested stock options as of July 31, 2014 is as follows: | |||||||||||||||||||||||||
Number of shares | Weighted average grant | ||||||||||||||||||||||||
date fair value | |||||||||||||||||||||||||
Nonvested at July 31, 2013 | 253,067 | $ | 7.41 | ||||||||||||||||||||||
Granted | - | $ | - | ||||||||||||||||||||||
Vested | (6,400 | ) | $ | 7.5 | |||||||||||||||||||||
Forfeited | (246,667 | ) | $ | 7.5 | |||||||||||||||||||||
Nonvested at July 31, 2014 | - | $ | - | ||||||||||||||||||||||
Warrant Activity | ' | ||||||||||||||||||||||||
Summary information regarding common stock warrants issued and outstanding as of July 31, 2014, is as follows: | |||||||||||||||||||||||||
Warrants | Weighted Average | Aggregate intrinsic | Weighted average | ||||||||||||||||||||||
Share Price | value | remaining | |||||||||||||||||||||||
contractual life (in | |||||||||||||||||||||||||
years) | |||||||||||||||||||||||||
Outstanding at year ended July 31, 2012 | 1,252,152 | $ | 7.74 | $ | - | 2.83 | |||||||||||||||||||
Granted | - | - | - | - | |||||||||||||||||||||
Exercised | - | - | - | - | |||||||||||||||||||||
Expired | (15,193 | ) | 28.02 | - | - | ||||||||||||||||||||
Outstanding at year ended July 31, 2013 | 1,236,959 | $ | 7.5 | $ | - | 1.87 | |||||||||||||||||||
Granted | - | - | - | - | |||||||||||||||||||||
Exercised | - | - | - | - | |||||||||||||||||||||
Expired | (152,375 | ) | 7.5 | - | - | ||||||||||||||||||||
Outstanding at year ended July 31, 2014 | 1,084,584 | $ | 7.5 | $ | - | 1.04 | |||||||||||||||||||
Schedule of Warrants Outstanding and Exercisable | ' | ||||||||||||||||||||||||
Warrants outstanding and exercisable as of July 31, 2014: | |||||||||||||||||||||||||
Exercise Price | Outstanding Number | Remaining Life | Exercisable Number | ||||||||||||||||||||||
of Shares | of Shares | ||||||||||||||||||||||||
$ | 7.5 | 666,667 | 2 years or less | 666,667 | |||||||||||||||||||||
$ | 7.5 | 349,117 | 1 year or less | 349,117 | |||||||||||||||||||||
$ | 7.5 | 68,800 | 1 year or less | 68,800 | |||||||||||||||||||||
1,084,584 | 1,084,584 | ||||||||||||||||||||||||
Warrants outstanding and exercisable as of July 31, 2013: | |||||||||||||||||||||||||
Exercise Price | Outstanding Number | Remaining Life | Exercisable Number | ||||||||||||||||||||||
of Shares | of Shares | ||||||||||||||||||||||||
$ | 7.5 | 666,667 | 3 years or less | 266,667 | |||||||||||||||||||||
$ | 7.5 | 417,919 | 2 years or less | 417,919 | |||||||||||||||||||||
$ | 7.5 | 152,373 | 1 year or less | 152,373 | |||||||||||||||||||||
1,236,959 | 836,959 | ||||||||||||||||||||||||
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 12 Months Ended | ||||||||
Jul. 31, 2014 | |||||||||
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 | 2014 | |||||||
Revenue generated from Barge Canal properties | $ | 643,203 | $ | 39,274 | |||||
Lease operating cost incurred from Barge Canal properties | $ | 224,047 | $ | 23,259 | |||||
Overhead costs incurred | $ | 28,038 | $ | - | |||||
Outstanding accounts receivable at period end | $ | 91,967 | $ | - | |||||
Outstanding accounts payable at year end | $ | - | $ | - | |||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||
Jul. 31, 2014 | |||||||||
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: | |||||||||
As of and For the Year ended July 31, | 2014 | 2013 | |||||||
U.S statutory federal rate | 35 00 | % | 35 | % | |||||
State income tax rate | 0.58 | % | 0.58 | % | |||||
Equity-based compensation | (5.16 | )% | (33.62 | )% | |||||
Gain on derivative warrants | - | % | 0.93 | % | |||||
Gain on sale of securities | - | % | (0.33 | )% | |||||
Other | (6.64 | )% | (0.50 | )% | |||||
Net operating loss | (23.70 | )% | (1.75 | )% | |||||
Effective statutory rate | 0.08 | % | 0.31 | % | |||||
Summary of Deferred Tax Assets | ' | ||||||||
Components of deferred tax assets as of July 31, 2014 and 2013 are as follows: | |||||||||
As of and For the Year ended July 31. | 2014 | 2013 | |||||||
Stock based compensation | $ | 338,078 | $ | 713,867 | |||||
Property. including depreciable property | (3,122,873 | ) | (2,980,005 | ) | |||||
Asset retirement obligation | 4,168,049 | 3,942,918 | |||||||
Net operating loss carry-forward | 5,596,732 | 3,846,783 | |||||||
Other | 20,860 | 42,368 | |||||||
7,000,846 | 5,565,931 | ||||||||
Valuation allowance for deferred tax assets | (7,000,846 | ) | (5,565.931 | ) | |||||
Total deferred tax assets | $ | - | $ | - | |||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||||||
Jul. 31, 2014 | |||||||||
Commitments and Contingencies [Abstract] | ' | ||||||||
Schedule of Prepaid Balances | ' | ||||||||
During the year ended July 31, 2014 and 2013 we prepaid the fees associated with the Greenbank letters of credit for the respective year interest upfront and amortized these fees on a straight-line basis over their respective annual periods. The following table reflects the prepaid balances as follows: | |||||||||
July 31, | 2014 | 2013 | |||||||
Prepaid letter of credit feees | $ | 101,251 | $ | 101,850 | |||||
Amortization | (8,488 | ) | (8,488 | ) | |||||
Net prepaid letter of credit fees | $ | 92,763 | $ | 93,362 |
Additional_Financial_Statement1
Additional Financial Statement Information (Tables) | 12 Months Ended | |||||||||
Jul. 31, 2014 | ||||||||||
Additional Financial Statement Information [Abstract] | ' | |||||||||
Schedule of Other Current Assets | ' | |||||||||
Other current assets consisted of the following: | ||||||||||
As of July July 31, | 2014 | 2013 | ||||||||
Prepaid letter of credit fees | 92,763 | 93,362 | ||||||||
Prepaid insurance | 287,743 | 184,138 | ||||||||
Other prepaid expenses | 63,143 | 11,101 | ||||||||
Cash call paid to operator | - | 24,225 | ||||||||
Prepaid land use fees | - | 28,728 | ||||||||
Accrued interest income | 2,671 | 4,388 | ||||||||
Other current assets | 446,320 | 345,942 | ||||||||
Schedule of Property and Equipment | ' | |||||||||
Property and equipment consisted of the following: | ||||||||||
As of July 31, | 2014 | 2013 | ||||||||
Furniture and fixtures | 5 years | $ | 24,085 | $ | 8,814 | |||||
Marine vessels | 5 years | 109,742 | 17,614 | |||||||
Vehicles | 5 years | 40,496 | 65,807 | |||||||
Computer equipment and software | 2 years | 126,143 | 82,466 | |||||||
Leasehold improvements | 2 years | 2,087 | - | |||||||
Other depreciable property | 2 years | - | 297 | |||||||
Total property and equipment | 302,553 | 174,998 | ||||||||
Less accumulated depreciation | (135,590 | ) | (116,945 | ) | ||||||
Net book value | $ | 166,963 | $ | 58,053 | ||||||
Depreciation expense | $ | 36,894 | $ | 61,215 | ||||||
Schedule of Accounts Payables and Accrued Expenses | ' | |||||||||
Accounts payable and accrued expenses consisted of the following: | ||||||||||
As of July 31, | 2014 | 2013 | ||||||||
Trade payables | 2,567,324 | 2,503,820 | ||||||||
Accrued payroll | 43,578 | 151,577 | ||||||||
Accrued interest and fees | 37,853 | 500 | ||||||||
Revenue payable | 5,790 | 4,717 | ||||||||
Local taxes and royalty payable | 111,699 | 128,470 | ||||||||
Federal and state income taxes payable | 29,431 | 27,000 | ||||||||
Total accounts payable and accrued expenses | 2,795,675 | 2,816,084 | ||||||||
Supplemental_Oil_and_Gas_Infor1
Supplemental Oil and Gas Information (Unaudited) (Tables) | 12 Months Ended | ||||||||||||
Jul. 31, 2014 | |||||||||||||
Supplemental Oil And Gas Information Unaudited [Abstract] | ' | ||||||||||||
Schedule of Net Proved Reserves | ' | ||||||||||||
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, 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 | ||||||||||
Revisions of previous estimates | 422,261 | 4,477 | 2,538,043 | ||||||||||
Sale of reserves in place | (17,750 | ) | (529,937 | ) | (636,437 | ) | |||||||
Production | (42,436 | ) | (173,569 | ) | (428,185 | ) | |||||||
Balance – July 31, 2014 | 1,021,775 | 12,031,361 | 18,162,011 | ||||||||||
Oil | Gas | Total | |||||||||||
Proved Reserves as of July 31, 2014 | (Barrels) | (Mcf) | (Mcfe) | ||||||||||
Proved developed producing | 200,981 | 969,940 | 2,175,826 | ||||||||||
Proved developed non-producing | 212,320 | 4,813,192 | 6,087,112 | ||||||||||
Proved undeveloped | 608,474 | 6,248,229 | 9,899,073 | ||||||||||
Total proved reserves | 1,021,775 | 12,031,361 | 18,162,011 | ||||||||||
Oil | Gas | Total | |||||||||||
Proved Reserves as of July 31, 2013 | (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 | ||||||||||
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. | |||||||||||||
For the year ended July 31, | 2014 | 2013 | |||||||||||
Unevaluated properties | $ | 2,119,769 | $ | 713,655 | |||||||||
Evaluated properties | 19,153,124 | 19,857,842 | |||||||||||
Less impairment | (373,335 | ) | (373,335 | ) | |||||||||
20,899,558 | 20,609,312 | ||||||||||||
Less depreciation, depletion, and amortization | (3,491,420 | ) | (2,617,478 | ) | |||||||||
Net capitalized cost | $ | 17,408,139 | $ | 17,580,684 | |||||||||
Schedule of Costs Incurred | ' | ||||||||||||
Costs incurred in property acquisition, exploration and development activities for the year ended July 31, 2014 were as follows. | |||||||||||||
Total | Namibia | USA | |||||||||||
Property acquisition | |||||||||||||
Unproved | $ | 1,232,815 | $ | 1,232,815 | $ | - | |||||||
Proved | 13 | - | 13 | ||||||||||
Exploration | 238,112 | 173,299 | 64,813 | ||||||||||
Development | - | - | - | ||||||||||
Cost recovery | (658,195 | ) | - | (658,195 | ) | ||||||||
Total costs incurred | $ | 812,745 | $ | 1,406,114 | $ | (593,369 | ) | ||||||
Costs incurred in property acquisition, exploration, and development activities for the year ended July 31, 2013 were all incurred in the USA. The following table provides information about the costs incurred: | |||||||||||||
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 | |||||||
Schedule of Costs Excluded by Year | ' | ||||||||||||
Costs Excluded by Year Incurred | |||||||||||||
As of July 31, | 2014 | 2013 | |||||||||||
Property acquisition | $ | 1,232,815 | $ | 677,795 | |||||||||
Exploration | 173,299 | 35,860 | |||||||||||
Total | $ | 1,406,114 | $ | 713,655 | |||||||||
Schedule of Costs Excluded by Country | ' | ||||||||||||
Changes in Costs Excluded by Country | |||||||||||||
Namibia | USA | ||||||||||||
Balance at July 31, 2012 | $ | - | $ | 265,639 | |||||||||
Additional Cost Incurred | 713,655 | 278,090 | |||||||||||
Cost recovery | - | (132,662 | ) | ||||||||||
Costs Transferred to DD&A Pool | - | (411,067 | ) | ||||||||||
Balance at July 31, 2013 | 713,655 | - | |||||||||||
Additional Cost Incurred | 1,406,114 | - | |||||||||||
Balance at July 31, 2014 | $ | 2,119,769.00 | $ | - | |||||||||
Schedule of Standardized Measure | ' | ||||||||||||
The Standardized Measure is as follows: | |||||||||||||
For the year ended July 31, | 2014 | 2013 | |||||||||||
Future cash inflows | $ | 159,283,690 | $ | 113,603,450 | |||||||||
Future production costs | (54,437,098 | ) | (55,897,070 | ) | |||||||||
Future development costs | (43,054,816 | ) | (41,794,284 | ) | |||||||||
Future income tax expenses | (21,627,122 | ) | (5,569,234 | ) | |||||||||
40,164,654 | 10,342,862 | ||||||||||||
10% annual discount for estimated timing of cash flows | (15,807,988 | ) | (3,990,069 | ) | |||||||||
Future net cash flows at end of year | $ | 24,356,666 | $ | 6,352,793 | |||||||||
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, 2014: | |||||||||||||
2014 | 2013 | ||||||||||||
Standardized measure of discounted future net cash flows at beginning of year | $ | 6,352,793 | $ | 33,663,886 | |||||||||
Net changes in prices and production costs | 20,980,014 | (37,623,010 | ) | ||||||||||
Changes in estimated future development costs | (764,412 | ) | 4,205,045 | ||||||||||
Sales of oil and gas produced, net of production costs | (151,783 | ) | (2,510,339 | ) | |||||||||
Discoveries and extensions | - | - | |||||||||||
Purchases of minerals in place | - | - | |||||||||||
Sales of minerals in place | (2,228,023 | ) | (17 | ) | |||||||||
Revisions of previous quantity estimates | 8,885,117 | (12,391,911 | ) | ||||||||||
Development costs incurred | - | 1,124,107 | |||||||||||
Change in income taxes | (9,694,393 | ) | 14,705,973 | ||||||||||
Accretion of discount | 977,353 | 5,179,059 | |||||||||||
Standardized measure of discounted future net cash flows at year end | $ | 24,356,666 | $ | 6,352,793 | |||||||||
Schedule of Results of Operations for Producing Activities | ' | ||||||||||||
For the year ended July 31, | 2014 | 2013 | |||||||||||
Net revenues from production | $ | 5,065,096 | $ | 7,070,540 | |||||||||
Expenses | |||||||||||||
Lease operating expense | 4,913,313 | 4,560,201 | |||||||||||
Accretion | 1,043,928 | 1,056,508 | |||||||||||
Operating expenses | 5,957,241 | 5,616,709 | |||||||||||
Depreciation, depletion and amortization | 873,942 | 1,059,803 | |||||||||||
Total expenses | 6,831,183 | 6,676,512 | |||||||||||
Income before income tax | (1,766,087 | ) | 394,028 | ||||||||||
Income tax expense | - | (137,910 | ) | ||||||||||
Results of operations | $ | (1,766,087 | ) | $ | 256,118 | ||||||||
Depreciation, depletion and amortization rate per net equivalent MCFE | $ | 2.04 | $ | 1.95 | |||||||||
Description_of_Business_and_Su2
Description of Business and Summary of Significant Accounting Policies (Details) (USD $) | 0 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||||||||
8-May-14 | Jul. 31, 2014 | Dec. 09, 2013 | Nov. 29, 2013 | Jul. 31, 2013 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 19, 2005 | Oct. 18, 2005 | Apr. 04, 2012 | Nov. 29, 2013 | 16-May-12 | Apr. 04, 2012 | 8-May-14 | Jul. 31, 2014 | Jul. 31, 2014 | Dec. 09, 2013 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | |
Partner | Minimum [Member] | Maximum [Member] | Purchaser One [Member] | Purchaser One [Member] | Purchaser One [Member] | Purchaser One [Member] | Penasco Petroleum Inc [Member] | Galveston Bay, LLC [Member] | SPE Navigation I, LLC [Member] | Namibia Exploration, Inc [Member] | Nevada Gold Corp [Member] | Gulf States Energy, Inc [Member] | Duma Energy Corp [Member] | Duma Energy Corp [Member] | Duma Energy Corp [Member] | Duma Energy Corp [Member] | Hydrocarb Energy Corp [Member] | Hydrocarb Energy Corp [Member] | Hydrocarb Corporation, HCN [Member] | Hydrocarb Corporation, HCN [Member] | Hydrocarb Texas Corporation [Member] | Hydrocarb Namibia Energy [Member] | Otaiba Hydrocarb LLC [Member] | |||||
Revenues [Member] | Revenues [Member] | Accounts receivable [Member] | Accounts receivable [Member] | Field | ||||||||||||||||||||||||
Subsidiary or Equity Method Investee [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares authorized (in shares) | ' | 333,333,333 | ' | 166,666,667 | 333,333,333 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000,000 | 500,000,000 | ' | 1,000,000,000 | 500,000,000 | 20,000,000 | ' | 333,333,333 | ' | ' | ' | ' | ' |
Common stock par value per share | ' | $0.00 | ' | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.00 | ' | ' | ' | ' | ' | $0.00 | ' | ' | ' | ' | ' |
Reverse stock split conversion ratio | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25 | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' |
Ownership interest (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | 100.00% | 100.00% | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | 100.00% | 100.00% | 95.00% |
Number of offshore fields having working interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Working interest rights (in hundredths) | ' | 90.00% | 39.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 51.00% | ' | ' | ' |
Cost responsibility rate (in hundredths) | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of working interest partners | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other receivables, allowance for doubtful accounts | ' | $70,742 | ' | ' | $58,585 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Risk percentage (in hundredths) | ' | ' | ' | ' | ' | ' | ' | 83.00% | 85.00% | 88.00% | 76.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Discount percentage on current prices (in hundredths) | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Restricted cash | ' | 6,877,944 | ' | ' | 6,920,739 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Prepaid land use fees, term | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase of domain name | ' | 30,267 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Approximate Life | ' | ' | ' | ' | ' | '3 years | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Advances | ' | $195,904 | ' | ' | $180,804 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reverse stock split | '1:3 reverse split | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisitions_HCN_Details
Acquisitions, HCN (Details) (USD $) | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | ||||||||||||
Dec. 09, 2013 | Jul. 31, 2014 | Jul. 31, 2013 | Dec. 09, 2013 | Dec. 09, 2013 | Dec. 09, 2013 | Jul. 31, 2014 | Dec. 09, 2013 | Dec. 02, 2013 | Dec. 09, 2013 | Dec. 31, 2013 | Dec. 09, 2013 | Dec. 09, 2013 | Dec. 09, 2013 | Dec. 09, 2013 | Dec. 09, 2013 | |
Well | Initial Exploration Period [Member] | First Renewal Exploration Period [Member] | Second Renewal Exploration Period [Member] | Common Stock [Member] | Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | HCN [Member] | HCN [Member] | HCN [Member] | HCN [Member] | HCN [Member] | Hydrocarb Namibia Energy (Pty) Limited [Member] | Otaiba Hydrocarb LLC [Member] | |||
acre | sqkm | sqkm | Series A Preferred Stock [Member] | Common Stock [Member] | Preferred Stock [Member] | |||||||||||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares exchanged (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,396,667 | 8,188 | ' | ' |
Value of shares issued for acquisition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $64,990,200 | $3,275,200 | ' | ' |
Per share value of shares issued for acquisition (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $400 | ' | ' |
Shares reserved for issuance to certain stock holders with certain rights (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,470,000 | ' | ' | ' | ' | ' | ' |
Shares issued and sold to extinguish debt (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 619,960 | ' | ' | ' | ' | ' | ' |
Value of shares issued to extinguish debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,589,567 | ' | ' | ' | ' | ' | ' |
Percentage ownership in subsidiaries (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | 95.00% |
Summary of the accounting entry to record the acquisition [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Assets acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,529,246 | ' | ' | ' | ' | ' | ' |
Liabilities assumed | ' | ' | ' | ' | ' | ' | ' | ' | ' | -161,599 | ' | ' | ' | ' | ' | ' |
Noncontrolling interest in 95% owned HCN subsidiary | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30,480 | ' | ' | ' | ' | ' | ' |
Total | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,398,127 | ' | ' | ' | ' | ' | ' |
Series A 7% Preferred Stock, par $400 | ' | ' | ' | ' | ' | ' | ' | 3,275,200 | ' | ' | ' | 3,275,200 | ' | ' | ' | ' |
Common stock, at par | ' | 21,082 | 4,427 | ' | ' | ' | 168 | ' | ' | 8,397 | ' | ' | ' | ' | ' | ' |
Receivable for common stock | ' | -2,184,879 | 0 | ' | ' | ' | ' | ' | ' | -2,484,879 | ' | ' | ' | ' | ' | ' |
Additional paid-in capital | ' | 78,953,599 | 75,137,401 | ' | ' | ' | ' | ' | ' | 599,409 | 1,837 | ' | ' | ' | ' | ' |
Dividend rate of preferred stock (in hundredths) | ' | ' | ' | ' | ' | ' | ' | 7.00% | 7.00% | ' | ' | ' | ' | ' | ' | ' |
Preferred stock stated value (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | $400 | $400 | ' | ' | ' | ' | ' | ' | ' |
Recorded Unconditional Purchase Obligation [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Working interest rights (in hundredths) | 39.00% | 90.00% | ' | ' | ' | ' | ' | ' | ' | 51.00% | ' | ' | ' | ' | ' | ' |
Cost responsibility rate (in hundredths) | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Concession area | 5,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Duration of commitment period | ' | ' | ' | ' | '2 years | '25 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Area of seismic data required by purchase obligation | ' | ' | ' | 750 | 200 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum required expenditure | ' | ' | ' | $4,505,000 | $17,350,000 | $300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of wells required to be drilled under the purchase obligation | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of exploration license area relinquish requirement (in hundredths) | ' | ' | ' | ' | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisitions_Namibia_Explorati
Acquisitions, Namibia Exploration, Inc. (Details) (USD $) | 0 Months Ended | 12 Months Ended | ||||
Dec. 09, 2013 | Sep. 06, 2012 | Jul. 31, 2014 | Jul. 31, 2013 | Sep. 30, 2012 | Sep. 06, 2012 | |
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' |
Acquisition-related costs - related party | ' | ' | $0 | $34,834,752 | ' | ' |
Ownership percentage (in hundredths) | 39.00% | ' | 90.00% | ' | ' | ' |
Stock issued during period for acquisition | ' | ' | ' | 35,396,800 | ' | ' |
Namibia Exploration, Inc. [Member] | ' | ' | ' | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' |
Stock issued during period for acquisition, shares (in shares) | ' | 8,396,667 | ' | ' | ' | ' |
Acquisition-related costs - related party | ' | 34,834,752 | ' | ' | ' | ' |
Amount of farm-in fee paid by original owners for payment of concession | ' | 2,400,000 | ' | ' | ' | ' |
Farm in fee of concession property payable period | ' | '2 years | ' | ' | ' | ' |
Cost basis in working interest in oil and gas property | ' | 562,048 | 562,048 | 562,048 | ' | ' |
Ownership percentage (in hundredths) | ' | ' | ' | ' | ' | 39.00% |
Cost responsibility percentage (in hundredths) | ' | ' | ' | ' | 43.33% | 43.33% |
Contingent shares to be issued upon achievement of milestone one (in shares) | ' | ' | ' | ' | ' | 830,000 |
Period within which milestones must be reached after the closing of acquisition | ' | '10 years | ' | ' | ' | ' |
Contingent shares to be issued upon achievement of milestone two (in shares) | ' | ' | ' | ' | ' | 2,490,000 |
Contingent shares to be issued upon achievement of milestone three (in shares) | ' | ' | ' | ' | ' | 4,150,000 |
The minimum ten day volume-weighted average market capitalization to achieve milestone one | ' | ' | ' | ' | ' | 82,000,000 |
Volume-weighted average market capitalization period | ' | '10 days | ' | ' | ' | ' |
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 |
Fair value of contingent equity grant | ' | 29,212,000 | ' | ' | ' | ' |
Liabilities assumed in business acquisition | ' | ' | ' | ' | ' | 1,837,952 |
Stock issued during period for acquisition | ' | $3,784,800 | ' | ' | ' | ' |
Shares reserved for issuance to certain stock holders with certain rights (in shares) | 7,470,000 | ' | ' | ' | ' | ' |
Namibia Exploration, Inc. [Member] | Hydrocarb Namibia [Member] | ' | ' | ' | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' |
Ownership percentage (in hundredths) | ' | 90.00% | ' | ' | ' | 90.00% |
Cost responsibility percentage (in hundredths) | ' | 100.00% | ' | ' | ' | 100.00% |
Namibia Exploration, Inc. [Member] | Market Approach Valuation Technique [Member] | ' | ' | ' | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' |
Fair value measurement discount rate (in hundredths) | ' | 75.00% | ' | ' | ' | ' |
Namibia Exploration, Inc. [Member] | Income Approach Valuation Technique [Member] | ' | ' | ' | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' |
Fair value measurement discount rate (in hundredths) | ' | 25.00% | ' | ' | ' | ' |
Supplemental_Cash_Flow_Informa2
Supplemental Cash Flow Information (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
Cash paid during the period for [Abstract] | ' | ' |
Income taxes | $10,000 | $42,483 |
Interest | 21,497 | 207,269 |
NONCASH INVESTING AND FINANCING ACTIVITIES | ' | ' |
Issuance of HEC common stock to settle notes payable | 3,589,567 | 0 |
Preferred stock exchanged for HCN preferred stock for acquisition of HCN | 3,275,200 | 0 |
Receivable for common stock | 1,859,879 | 0 |
Settlement of HCN debt with HCN preferred stock | 1,585,200 | 1,690,000 |
Receivable for common stock - related party | 1,000,000 | 0 |
Note payable for prepaid insurance | 403,104 | 260,905 |
Asset retirement obligation sold | 33,195 | 438 |
Common stock exchanged for HCN common stock for acquisition of HCN | 8,397 | 0 |
Common stock issued to satisfy contingently issuable shares from 2012 acquisition of Namibia Exploration , Inc. | 7,470 | 0 |
Asset retirement obligations - change in estimate | -104,237 | 786,120 |
Treasury stock acquired via note receivable | 0 | 822,250 |
Acquisition of Namibia Exploration, Inc. | 0 | 562,048 |
Expiration of derivative warrant liability | 0 | 269,164 |
Accounts payable for oil and gas properties | 0 | 188,607 |
Asset retirement obligations incurred | $0 | $26,500 |
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, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | ' | ' | ' |
Proceeds from sale of available for sale securities | $142,637 | ' | $145,237 | $0 | $287,874 | ' |
Cost basis of available for sale securities sold | 198,593 | 174,000 | 607,201 | ' | ' | ' |
Impairment of available for sale securities | ' | 275,327 | ' | 0 | 275,327 | ' |
Unrealized loss reclassified from other comprehensive loss into earnings | -743,082 | ' | ' | ' | ' | 6,383 |
Market value of available-for-sale securities | ' | ' | ' | 0 | 24,593 | 702,959 |
(Gain) loss on sale of available for sale securities | $55,956 | ' | $461,964 | $0 | $517,920 | ' |
Oil_and_Gas_Properties_Schedul
Oil and Gas Properties (Schedule of Oil and Gas Properties) (Details) (USD $) | Jul. 31, 2014 | Jul. 31, 2013 |
Evaluated Properties [Abstract] | ' | ' |
Costs subject to depletion | $19,153,125 | $19,857,842 |
Accumulated impairment | -373,335 | -373,335 |
Accumulated Depletion | -3,491,420 | -2,617,478 |
Total evaluated properties | 15,288,370 | 16,867,029 |
Unevaluated properties | 2,119,769 | 1,124,805 |
Net capitalized cost | $17,408,139 | $17,991,834 |
Oil_and_Gas_Properties_Details
Oil and Gas Properties (Details) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | 12 Months Ended | ||||||
Jul. 31, 2014 | Jul. 31, 2013 | Dec. 31, 2012 | Jul. 31, 2014 | Sep. 30, 2012 | Sep. 06, 2012 | Jul. 31, 2014 | Jul. 31, 2013 | Sep. 30, 2012 | Sep. 06, 2012 | Jul. 31, 2014 | Dec. 31, 2013 | |
Janssen lease [Member] | Welder Lease [Member] | Holt And Strahan Properties [Member] | Namibia Exploration, Inc. [Member] | Namibia Exploration, Inc. [Member] | Namibia Exploration, Inc. [Member] | Namibia Exploration, Inc. [Member] | Namibia Exploration, Inc. [Member] | HCN [Member] | HCN [Member] | |||
Well | acre | |||||||||||
Oil And Gas Properties [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisition related costs, cash paid | ' | ' | ' | ' | ' | ' | $1,406,114 | $713,655 | ' | ' | ' | ' |
Geological And Geophysical Costs | 34,029 | 157,818 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash proceeds on termination of employment | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Assumption of abandonment liabilities | 4,381 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Recognized gain (loss) on sale | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from sale of oil and gas properties | 625,000 | 195,563 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ownership percentage (in hundredths) | ' | ' | ' | ' | 6.25% | ' | ' | ' | 39.00% | ' | 90.00% | 51.00% |
Number of acres included in oil and gas property | ' | ' | ' | ' | ' | ' | ' | ' | 5,300,000 | ' | ' | ' |
Number of productive wells on the property | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from sale of working interest | ' | ' | 2,500 | ' | 50,000 | ' | ' | ' | ' | ' | ' | ' |
Portion of overriding royalty interest treated as reduction of capitalized costs | ' | ' | ' | ' | 32,146 | ' | ' | ' | ' | ' | ' | ' |
Percentage of working interest sold (in hundredths) | ' | ' | 3.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cost responsibility percentage (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | 43.33% | 43.33% | 100.00% | 56.67% |
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 | ' | ' | ' | ' | ' |
Minimum cost responsibilities during the first renewal exploration period | ' | ' | ' | ' | ' | ' | 17,350,000 | ' | ' | ' | ' | ' |
Percentage of relinquish exploration license area during the first renewal exploration period (in hundredths) | ' | ' | ' | ' | ' | ' | 25.00% | ' | ' | ' | ' | ' |
Minimum cost responsibilities during the second renewal exploration period | ' | ' | ' | ' | ' | ' | 300,000 | ' | ' | ' | ' | ' |
Second renewal exploration period | ' | ' | ' | ' | ' | ' | '25 years | ' | ' | ' | ' | ' |
The cumulative amount expended toward costs for the initial exploration period | ' | ' | ' | ' | ' | ' | 2,100,000 | 900,000 | ' | ' | ' | ' |
Asset retirement obligation sold | 33,195 | 438 | 438 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exploration costs | 238,112 | 404,265 | ' | ' | ' | ' | 800,000 | ' | ' | ' | ' | ' |
Leasehold costs | ' | ' | ' | ' | ' | ' | $129,000 | ' | ' | ' | ' | ' |
Asset_Retirement_Obligation_De
Asset Retirement Obligation (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
Well | ||
Reconciliation of asset retirement obligation balance [Abstract] | ' | ' |
Liability for asset retirement obligation, beginning of period | $10,933,398 | $9,382,933 |
Asset retirement obligations sold | -33,195 | -438 |
Asset retirement obligation incurred on properties drilled | 0 | 26,500 |
Accretion | 1,043,928 | 1,056,508 |
Revisions in estimated cash flows | -104,237 | 786,120 |
Costs incurred | -123,664 | -318,225 |
Liability for asset retirement obligation, end of period | 11,716,230 | 10,933,398 |
Current portion of asset retirement obligation | 1,133,690 | 724,374 |
Noncurrent portion of asset retirement obligation | 10,582,540 | 10,209,024 |
Total liability for asset retirement obligation | 11,716,230 | 10,933,398 |
Estimated Timing of asset retirement obligation payments [Abstract] | ' | ' |
2015 | 1,133,690 | ' |
2016 | 727,241 | ' |
2017 | 1,194,856 | ' |
2018 | 618,215 | ' |
2019 | 857,144 | ' |
2020 to 2024 | 4,291,988 | ' |
2025 to 2029 | 1,660,378 | ' |
2030 to 2034 | 1,232,718 | ' |
Thereafter | 0 | ' |
Total liability for asset retirement obligation | 11,716,230 | 10,933,398 |
Number of wells plugged | 3 | ' |
Pipelines [Member] | ' | ' |
Reconciliation of asset retirement obligation balance [Abstract] | ' | ' |
Liability for asset retirement obligation, end of period | 1,655,939 | ' |
Total liability for asset retirement obligation | 1,655,939 | ' |
Estimated Timing of asset retirement obligation payments [Abstract] | ' | ' |
2015 | 126,290 | ' |
2016 | 60,000 | ' |
2017 | 99,938 | ' |
2018 | 55,040 | ' |
2019 | 52,621 | ' |
2020 to 2024 | 980,713 | ' |
2025 to 2029 | 236,898 | ' |
2030 to 2034 | 44,439 | ' |
Thereafter | 0 | ' |
Total liability for asset retirement obligation | 1,655,939 | ' |
Number of dismantlement, restoration or abandonment obligations | 45 | ' |
Easements [Member] | ' | ' |
Reconciliation of asset retirement obligation balance [Abstract] | ' | ' |
Liability for asset retirement obligation, end of period | 523,995 | ' |
Total liability for asset retirement obligation | 523,995 | ' |
Estimated Timing of asset retirement obligation payments [Abstract] | ' | ' |
2015 | 0 | ' |
2016 | 27,516 | ' |
2017 | 66,006 | ' |
2018 | 14,475 | ' |
2019 | 10,429 | ' |
2020 to 2024 | 193,283 | ' |
2025 to 2029 | 67,089 | ' |
2030 to 2034 | 145,197 | ' |
Thereafter | 0 | ' |
Total liability for asset retirement obligation | 523,995 | ' |
Number of dismantlement, restoration or abandonment obligations | 135 | ' |
Wellbores [Member] | ' | ' |
Reconciliation of asset retirement obligation balance [Abstract] | ' | ' |
Liability for asset retirement obligation, end of period | 6,719,388 | ' |
Total liability for asset retirement obligation | 6,719,388 | ' |
Estimated Timing of asset retirement obligation payments [Abstract] | ' | ' |
2015 | 997,400 | ' |
2016 | 639,725 | ' |
2017 | 191,476 | ' |
2018 | 548,700 | ' |
2019 | 572,337 | ' |
2020 to 2024 | 2,269,781 | ' |
2025 to 2029 | 1,356,391 | ' |
2030 to 2034 | 143,578 | ' |
Thereafter | 0 | ' |
Total liability for asset retirement obligation | 6,719,388 | ' |
Number of dismantlement, restoration or abandonment obligations | 143 | ' |
Facilities [Member] | ' | ' |
Reconciliation of asset retirement obligation balance [Abstract] | ' | ' |
Liability for asset retirement obligation, end of period | 2,816,908 | ' |
Total liability for asset retirement obligation | 2,816,908 | ' |
Estimated Timing of asset retirement obligation payments [Abstract] | ' | ' |
2015 | 10,000 | ' |
2016 | 0 | ' |
2017 | 837,436 | ' |
2018 | 0 | ' |
2019 | 221,757 | ' |
2020 to 2024 | 848,211 | ' |
2030 to 2034 | 899,504 | ' |
Thereafter | 0 | ' |
Total liability for asset retirement obligation | $2,816,908 | ' |
Number of dismantlement, restoration or abandonment obligations | 8 | ' |
Notes_Payable_Lines_of_Credit_
Notes Payable, Lines of Credit (Details) (USD $) | 1 Months Ended |
In Millions, unless otherwise specified | Mar. 17, 2011 |
Notes Payable [Abstract] | ' |
Revolving line of credit period with commercial bank | '1 year |
Line of credit, interest rate spread over prime rate (in hundredths) | 1.00% |
Debt instrument, minimum interest rate (in hundredths) | 5.00% |
Line of credit, interest rate (in hundredths) | 6.00% |
Line of credit, amount outstanding | $5 |
Notes_Payable_Details
Notes Payable (Details) (USD $) | 1 Months Ended | 12 Months Ended | 1 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 1 Months Ended | 1 Months Ended | 12 Months Ended | ||||||||||||||||
Sep. 30, 2012 | 31-May-12 | Mar. 17, 2011 | Jul. 31, 2014 | Jul. 31, 2013 | Dec. 09, 2013 | Jun. 30, 2013 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2013 | Feb. 28, 2014 | Mar. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 06, 2012 | Sep. 30, 2012 | Jul. 31, 2014 | Jun. 30, 2013 | Jul. 31, 2014 | Jul. 31, 2013 | Aug. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | |
Payment | Prime Rate [Member] | Commercial Insurance Program Renewal [Member] | Notes Payable For Vehicle Purchase [Member] | Notes Payable For Vehicle Purchase [Member] | Note Payable For Commercial Insurance Program [Member] | Note Payable For Commercial Insurance Program [Member] | Note Payable - Hydrocarb Corporation [Member] | Note Payable - Hydrocarb Corporation [Member] | Note Payable - Hydrocarb Corporation [Member] | Note Payable - Hydrocarb Corporation - Payment One [Member] | Note Payable - Hydrocarb Corporation - Payment One [Member] | Note Payable - Hydrocarb Corporation - Payment Two [Member] | Operating and capital leases [Member] | Line of Credit [Member] | Line of Credit [Member] | Line of Credit [Member] | Line of Credit [Member] | Notes Payable [Member] | Term Loan [Member] | ||||||
Payment | Payment | Subsequent Event [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consulting fee | $2,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Partial consulting fee payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 800,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of days to the assignment of working interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '15 days | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Working interest rights (in hundredths) | ' | ' | ' | 90.00% | ' | 39.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 39.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, face amount | ' | 18,375 | ' | ' | ' | ' | ' | ' | ' | ' | 403,104 | 260,905 | ' | ' | 1,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Periodic installments amount | ' | 567 | ' | ' | ' | ' | ' | ' | ' | ' | 45,718 | 29,591 | ' | ' | ' | 800,000 | ' | 800,000 | ' | 12,500 | ' | ' | ' | ' | ' |
Debt instrument, interest rate (in hundredths) | ' | 6.93% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' | 6.00% | ' | ' | ' | ' | ' |
Variable interest rate | ' | ' | ' | ' | ' | ' | 'prime + 1% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Variable interest rate (in hundredths) | ' | ' | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | ' | ' | ' | ' | ' |
Rate of late fee (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period of commencing late fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '30 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest and late fees on notes payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 553,630 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest | ' | ' | ' | 21,497 | 207,269 | ' | ' | ' | ' | ' | ' | ' | ' | 25,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal balance | ' | ' | ' | ' | ' | ' | ' | 0 | 5,530 | 11,678 | 179,158 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 150,000 | 275,000 | 150,000 | ' | ' |
Amount incurred of late fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 663 |
Line of credit facility, amount outstanding | ' | ' | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 | ' | ' | ' | ' | ' |
Number of required periodic payments | ' | 36 | ' | ' | ' | ' | ' | ' | ' | ' | 9 | ' | ' | ' | ' | ' | ' | ' | ' | 24 | ' | ' | ' | ' | ' |
Maturity date of term loan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 22-Jun-15 |
Maturities of long term debt obligation [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2015 | ' | ' | ' | 334,688 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | 334,688 | ' |
Thereafter | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | 0 | ' |
Total | ' | ' | ' | $334,688 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0 | ' | ' | ' | ' | $334,688 | ' |
Fair_Value_Narrative_Details
Fair Value (Narrative) (Details) (USD $) | 1 Months Ended | 12 Months Ended | 12 Months Ended | |||||||
Oct. 31, 2009 | Jul. 31, 2014 | Jul. 31, 2013 | Nov. 13, 2012 | Jul. 31, 2012 | Jul. 31, 2011 | Jul. 31, 2011 | Jul. 31, 2011 | Jul. 31, 2011 | Jul. 31, 2011 | |
Warrant B [Member] | Warrant C [Member] | Geoserve Marketing, LLC [Member] | Geoserve Marketing, LLC [Member] | Geoserve Marketing, LLC [Member] | ||||||
Warrant B [Member] | Warrant C [Member] | |||||||||
Fair Value [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Discount to market price (in hundredths) | 65.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of warrants expired (in shares) | ' | ' | ' | 206,400 | ' | ' | ' | ' | ' | ' |
Antidilution provisions expire term for the warrant agreement (in years) | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants Granted To Related Party [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total shares of common stock issuable under warrants (in shares) | ' | ' | ' | ' | ' | ' | ' | 400,000 | ' | ' |
Period for calculating average closing price | ' | ' | ' | ' | ' | '5 days | '5 days | ' | '5 days | '5 days |
Average closing stock price that will trigger issuance of additional warrants (in dollars per share) | ' | ' | ' | ' | ' | $22.50 | $45 | ' | $22.50 | $45 |
Number of warrants exercisable upon attaining target average closing price (in shares) | ' | ' | ' | ' | ' | 200,000 | 200,000 | ' | 200,000 | 200,000 |
Exercise price (in dollars per share) | ' | $7.50 | $7.50 | ' | $7.74 | $7.50 | $7.50 | ' | $7.50 | $7.50 |
Expiration date | ' | ' | ' | ' | ' | 15-Feb-16 | 15-Feb-16 | ' | 15-Feb-16 | 15-Feb-16 |
Term of warrants | ' | ' | ' | ' | ' | '2 years 0 months 29 days | '2 years 5 months 26 days | ' | ' | ' |
Fair_Value_Schedule_of_the_Cha
Fair Value (Schedule of the Changes in Fair Value of the Warrant Liability) (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
Fair Value [Abstract] | ' | ' |
Beginning of the period | $0 | $1,325,388 |
Expiration of derivative warrant feature | 0 | -269,164 |
Unrealized gain on changes in fair value of derivative liability | 0 | -1,056,224 |
End of the period | $0 | $0 |
Capital_Stock_Stock_Split_Pref
Capital Stock, Stock Split, Preferred Stock and Common Stock (Details) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | ||||||||||||||||
8-May-14 | Dec. 04, 2013 | Sep. 06, 2013 | Oct. 31, 2013 | Aug. 31, 2013 | Jul. 31, 2014 | Jul. 31, 2013 | Nov. 29, 2013 | Sep. 06, 2013 | Jul. 31, 2014 | Feb. 28, 2013 | Aug. 04, 2014 | Aug. 04, 2014 | Dec. 04, 2013 | Sep. 06, 2013 | Oct. 31, 2013 | Jul. 31, 2014 | Dec. 31, 2013 | Dec. 09, 2013 | Sep. 30, 2012 | Dec. 09, 2013 | Dec. 02, 2013 | Dec. 03, 2013 | Jul. 31, 2014 | Dec. 09, 2013 | Oct. 31, 2014 | Jul. 31, 2014 | Oct. 31, 2013 | Dec. 09, 2013 | Jul. 31, 2014 | |
2013 Stock Incentive Plan [Member] | 2013 Stock Incentive Plan [Member] | Subsequent Event [Member] | Subsequent Event [Member] | HCN [Member] | HCN [Member] | HCN [Member] | HCN [Member] | HCN [Member] | HCN [Member] | NEI [Member] | Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | ||||||||||
HCN [Member] | NEI [Member] | NEI [Member] | ||||||||||||||||||||||||||||
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reverse stock split | '1:3 reverse split | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock split conversion ratio | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares authorized (in shares) | ' | ' | ' | ' | ' | 333,333,333 | 333,333,333 | 166,666,667 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, par value (in dollars per share) | ' | ' | ' | ' | ' | $0.00 | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividend rate (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7.00% | 7.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock, shares authorized (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock stated value (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $400 | $400 | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock, conversion rate (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $6 | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock, shares issued (in shares) | ' | ' | ' | ' | ' | 4,225 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,188 | ' | ' | 3,963 | ' | ' | ' | ' | ' | ' |
Preferred stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $3,275,200 | ' | ' | ' | $3,275,200 | ' | ' | ' | ' | ' |
Preferred Stock, Value, Beneficial Conversion Feature | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 949,808 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividends earned | ' | ' | ' | ' | ' | 150,548 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 39,230 | 34,254 | ' | ' | ' | ' | ' | ' |
Common stock, shares issued (in shares) | ' | ' | ' | ' | ' | 21,081,602 | 4,427,071 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,830,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitment to issue additional stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 31,612,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock issued for notes payable and joint interest billings (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 619,960 | ' | ' | ' | ' |
Consulting fee payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,400,000 | ' | ' |
Interest and late fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 553,630 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Joint interest billings payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 635,937 | ' | ' |
Stock issued for notes payable and joint interest billings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,589,567 | ' | ' | ' | ' |
Stock issued during period for acquisition, shares (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,396,667 | 7,470,000 |
Par value of common stock issued | ' | ' | ' | ' | ' | 21,082 | 4,427 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,397 | 3,784,800 | ' | ' | ' | ' | ' | ' | 168 | ' | ' | ' |
Additional Paid in Capital | ' | ' | ' | ' | ' | 78,953,599 | 75,137,401 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,837 | 599,409 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock issued, business acquisition | ' | ' | ' | ' | ' | ' | 35,396,800 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 31,612,000 | ' |
Shares issued for services rendered (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 167,907 | ' | ' | ' |
Compensation expense for shares issued for services | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 813,827 | ' | ' | ' |
Advances from affiliates cancelled | ' | ' | ' | ' | ' | 1,379,891 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest and dividends settled | ' | ' | ' | ' | ' | 205,309 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Settlement of HCN debt with HCN preferred stock | ' | ' | ' | ' | ' | 1,585,200 | 1,690,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares of common stock issued in exchange for note receivable (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 619,960 | 191,667 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Value of common stock issued in exchange for note receivable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,859,879 | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum percentage of proceeds to be received upon sale of stock to third party (in hundredths) | ' | 100.00% | ' | ' | ' | ' | ' | ' | 95.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum proceeds to be received upon sale of stock to third party | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period of stock listing on major stock exchange within which the Company will receive proceeds from sale of stock | ' | '90 days | '90 days | ' | ' | ' | ' | ' | ' | ' | ' | '60 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from collection of note receivable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 675,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period of six month anniversary of stock sale within which the Company will receive proceeds from sale of stock | ' | '60 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period from date that shares become unrestricted within which the Company will receive proceeds from sale of stock | ' | '60 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of remaining receivable balance is due within stock listing period (in hundredths) | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum share price for note receivable to be due to company (in dollars per share) | ' | $6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Note receivable extension fee | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Note payble remaining balance repaid in future | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $750,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares authorized for issuance (in share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 570,136 | 883,333 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected life | ' | ' | ' | '6 years 6 months | '6 years 6 months | ' | ' | ' | ' | '4 years 6 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Capital_Stock_Options_Granted_
Capital Stock, Options Granted (Details) (USD $) | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | |||||||||||||
Oct. 31, 2013 | Aug. 31, 2013 | Jul. 31, 2014 | Jul. 31, 2013 | Feb. 28, 2013 | Jul. 31, 2011 | Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | Aug. 31, 2013 | Jul. 31, 2014 | Oct. 31, 2013 | Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2014 | |||||
Directors [Member] | Employees [Member] | Stock Option [Member] | Stock Option [Member] | Stock Option [Member] | Stock Option [Member] | Stock Option [Member] | Stock Option [Member] | Stock Option [Member] | Stock Option [Member] | Stock Option [Member] | Stock Option [Member] | 2013 Stock Incentive Plan [Member] | |||||||||
Person | Person | Directors [Member] | Directors [Member] | Non Employees [Member] | Non Employees [Member] | Non Employees [Member] | Employees [Member] | Employees [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Aggregate number of options granted (in shares) | ' | ' | ' | ' | 200,000 | 86,667 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Weighted average exercise price of options granted (in dollars per share) | ' | ' | ' | ' | $6.60 | $7.50 | $0 | $6.60 | ' | ' | ' | ' | ' | [1] | $6.60 | ' | [1] | ' | [1] | ' | |
Vesting period | ' | ' | ' | ' | '10 years | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Options granted to number of directors and employee | ' | ' | ' | ' | 3 | 5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Vesting percentage of options after each six months (in hundredths) | ' | ' | ' | ' | 20.00% | 20.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Period in which vesting of options should be complete | ' | ' | ' | ' | '30 months | '30 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Fair value of options granted | ' | ' | ' | ' | $1,196,589 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Unrecognized compensation cost related to stock options | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | 0 | ' | 0 | 0 | ' | ||||
Options vested (in shares) | 53,333 | ' | ' | ' | ' | ' | ' | ' | ' | 13,333 | 666,666 | ' | ' | ' | ' | ' | ' | ||||
Fair value of options vested | 810,738 | ' | ' | ' | ' | ' | ' | ' | ' | 16,184 | ' | ' | ' | ' | ' | ' | ' | ||||
Assumptions used in estimating fair value of options [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Risk free interest rate, minimum (in hundredths) | ' | ' | ' | ' | ' | ' | ' | [1] | 1.11% | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Risk free interest rate (in hundredths) | 2.09% | 2.01% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Risk free interest rate, maximum (in hundredths) | ' | ' | ' | ' | ' | ' | ' | [1] | 2.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Dividend yield (in hundredths) | 0.00% | 0.00% | ' | ' | ' | ' | 0.00% | 0.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Volatility factor, minimum (in hundredths) | ' | ' | ' | ' | ' | ' | ' | [1] | 140.30% | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Volatility factor (in hundredths) | 117.31% | 144.01% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Volatility factor, maximum (in hundredths) | ' | ' | ' | ' | ' | ' | ' | [1] | 144.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Expected life | '6 years 6 months | '6 years 6 months | ' | ' | ' | ' | '0 years | [1] | '6 years 6 months | ' | ' | ' | ' | ' | ' | ' | ' | '4 years 6 months | |||
Information about options granted to non-employees under stock incentive plans [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Number of options granted (in shares) | ' | ' | ' | ' | ' | ' | 0 | 200,000 | ' | ' | ' | ' | 0 | 200,000 | 0 | 0 | ' | ||||
Compensation expense recognized | ' | ' | 1,757,399 | 933,126 | ' | ' | ' | ' | ' | ' | ' | 60,622 | 887,544 | 679,174 | 56,028 | 253,952 | ' | ||||
Weighted average exercise price of options granted (in dollars per share) | ' | ' | ' | ' | $6.60 | $7.50 | $0 | $6.60 | ' | ' | ' | ' | ' | [1] | $6.60 | ' | [1] | ' | [1] | ' | |
Options [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Outstanding, beginning balance (in shares) | ' | 512,000 | 512,000 | ' | ' | ' | 512,000 | 348,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Granted (in shares) | ' | ' | ' | ' | ' | ' | 0 | 200,000 | ' | ' | ' | ' | 0 | 200,000 | 0 | 0 | ' | ||||
Exercised (in shares) | ' | ' | ' | ' | ' | ' | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Expired or forfeited (in shares) | ' | ' | ' | ' | ' | ' | -246,667 | -36,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Outstanding, ending balance (in shares) | ' | ' | 265,333 | 512,000 | ' | ' | 265,333 | 512,000 | 348,000 | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Exercisable, ending balance (in shares) | ' | ' | 265,333 | 258,933 | ' | ' | 265,333 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Weighted Average Exercise Price [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Outstanding, beginning balance (in dollars per share) | ' | ' | ' | ' | ' | ' | $6.81 | $7.50 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Granted (in dollars per share) | ' | ' | ' | ' | $6.60 | $7.50 | $0 | $6.60 | ' | ' | ' | ' | ' | [1] | $6.60 | ' | [1] | ' | [1] | ' | |
Exercised (in dollars per share) | ' | ' | ' | ' | ' | ' | $0 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Expired or forfeited (in dollars per share) | ' | ' | ' | ' | ' | ' | $7.50 | $7.50 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Outstanding, ending balance (in dollars per share) | ' | ' | ' | ' | ' | ' | $6.81 | $6.81 | $7.50 | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Exercisable, ending balance (in dollars per share) | ' | ' | ' | ' | ' | ' | $6.81 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Aggregate intrinsic value, beginning balance | ' | ' | ' | ' | ' | ' | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Aggregate intrinsic value, ending balance | ' | ' | ' | ' | ' | ' | 0 | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Aggregate intrinsic value, Exercisable | ' | ' | ' | ' | ' | ' | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Weighted average remaining contractual life, beginning balance | ' | ' | ' | ' | ' | ' | '7 years 11 months 12 days | '7 years 11 months 23 days | '7 years 2 months 19 days | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Weighted average remaining contractual life, ending balance | ' | ' | ' | ' | ' | ' | '7 years 11 months 12 days | '7 years 11 months 23 days | '7 years 2 months 19 days | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Weighted average remaining contractual life, Exercisable | ' | ' | ' | ' | ' | ' | '7 years 11 months 12 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
[1] | N/A |
Capital_Stock_Options_Outstand
Capital Stock, Options Outstanding and Exercisable (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
Options Outstanding and Exercisable [Line Items] | ' | ' |
Outstanding Number of Shares (in shares) | 265,333 | 512,000 |
Exercisable Number of Shares (in shares) | 265,333 | 258,933 |
Exercise Price 6.60 [Member] | ' | ' |
Options Outstanding and Exercisable [Line Items] | ' | ' |
Exercise price (in dollars per share) | $6.60 | $6.60 |
Outstanding Number of Shares (in shares) | 200,000 | 200,000 |
Remaining Life | '8 years 6 months 14 days | '9 years 6 months 14 days |
Exercisable Number of Shares (in shares) | 200,000 | 0 |
Exercise Price 7.50 [Member] | ' | ' |
Options Outstanding and Exercisable [Line Items] | ' | ' |
Exercise price (in dollars per share) | $7.50 | $7.50 |
Outstanding Number of Shares (in shares) | 53,333 | 265,333 |
Remaining Life | '6 years 8 months 23 days | '7 years 8 months 23 days |
Exercisable Number of Shares (in shares) | 53,333 | 212,267 |
Exercise Price 7.50 [Member] | ' | ' |
Options Outstanding and Exercisable [Line Items] | ' | ' |
Exercise price (in dollars per share) | $7.50 | $7.50 |
Outstanding Number of Shares (in shares) | 4,000 | 20,000 |
Remaining Life | '4 years 9 months 22 days | '3 years 11 months 5 days |
Exercisable Number of Shares (in shares) | 4,000 | 20,000 |
Exercise Price 7.50 [Member] | ' | ' |
Options Outstanding and Exercisable [Line Items] | ' | ' |
Exercise price (in dollars per share) | $7.50 | $7.50 |
Outstanding Number of Shares (in shares) | 8,000 | 8,000 |
Remaining Life | '2 years 11 months 5 days | '5 years 9 months 22 days |
Exercisable Number of Shares (in shares) | 8,000 | 8,000 |
Exercise Price 7.50 [Member] | ' | ' |
Options Outstanding and Exercisable [Line Items] | ' | ' |
Exercise price (in dollars per share) | ' | $7.50 |
Outstanding Number of Shares (in shares) | ' | 18,667 |
Remaining Life | ' | '1 year |
Exercisable Number of Shares (in shares) | ' | 18,667 |
Capital_Stock_Schedule_of_Nonv
Capital Stock, Schedule of Nonvested Share Activity (Details) (USD $) | 12 Months Ended |
Jul. 31, 2014 | |
Number of shares [Abstract] | ' |
Nonvested at July 31, 2013 (in shares) | 253,067 |
Granted (in shares) | 0 |
Vested (in shares) | -6,400 |
Forfeited (in shares) | -246,667 |
Nonvested at July 31, 2014 (in shares) | 0 |
Weighted average grant date fair value [Abstract] | ' |
Nonvested at July 31, 2013 (in dollars per shares) | $7.41 |
Granted (in dollars per shares) | $0 |
Vested (in dollars per shares) | $7.50 |
Forfeited (in dollars per shares) | $7.50 |
Nonvested at July 31, 2014 (in dollars per shares) | $0 |
Capital_Stock_Warrants_Granted
Capital Stock, Warrants Granted (Details) (USD $) | 12 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | Jul. 31, 2014 | Jul. 31, 2011 | Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2011 | Jul. 31, 2011 | Jul. 31, 2011 | Jul. 31, 2011 | |
Warrant B [Member] | Warrant B [Member] | Warrant C [Member] | Warrant C [Member] | Warrant C [Member] | Geoserve Marketing, LLC [Member] | Geoserve Marketing, LLC [Member] | Geoserve Marketing, LLC [Member] | ||||
Warrant B [Member] | Warrant C [Member] | ||||||||||
Warrants Granted To Related Party [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total shares of common stock issuable under warrants (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 400,000 | ' | ' |
Period for calculating average closing price | ' | ' | ' | ' | '5 days | ' | ' | '5 days | ' | '5 days | '5 days |
Average closing stock price that will trigger issuance of additional warrants (in dollars per share) | ' | ' | ' | ' | $22.50 | ' | ' | $45 | ' | $22.50 | $45 |
Number of warrants exercisable upon attaining target average closing price (in shares) | ' | ' | ' | ' | 200,000 | ' | ' | 200,000 | ' | 200,000 | 200,000 |
Exercise price (in dollars per share) | $7.50 | $7.50 | $7.74 | ' | $7.50 | ' | ' | $7.50 | ' | $7.50 | $7.50 |
Expiration date | ' | ' | ' | ' | 15-Feb-16 | ' | ' | 15-Feb-16 | ' | 15-Feb-16 | 15-Feb-16 |
Fair value | ' | ' | ' | $266,017 | ' | $206,245 | ' | ' | ' | ' | ' |
Compensation expense recognized | 1,757,399 | 933,126 | ' | 6,754 | ' | ' | 196,384 | ' | ' | ' | ' |
Warrants [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding, beginning balance (in shares) | 1,236,959 | 1,252,152 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Granted (in shares) | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercised (in shares) | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expired (in shares) | -152,375 | -15,193 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding, beginning balance (in shares) | 1,084,584 | 1,236,959 | 1,252,152 | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted Average Exercise Price [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding, beginning balance (in dollars per share) | $7.50 | $7.74 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Granted (in dollars per share) | $0 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercised (in dollars per share) | $0 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expired (in dollars per share) | $7.50 | $28.02 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding, beginning balance (in dollars per share) | $7.50 | $7.50 | $7.74 | ' | $7.50 | ' | ' | $7.50 | ' | $7.50 | $7.50 |
Aggregate intrinsic value | $0 | $0 | $0 | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average remaining contractual life | '1 year 0 months 14 days | '1 year 10 months 13 days | '2 years 9 months 29 days | ' | ' | ' | ' | ' | ' | ' | ' |
Capital_Stock_Warrants_Outstan
Capital Stock, Warrants Outstanding and Exercisable (Details) (USD $) | 12 Months Ended | ||
Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | |
Warrants Outstanding And Exercisable [Line Items] | ' | ' | ' |
Exercise price (in dollars per share) | $7.50 | $7.50 | $7.74 |
Outstanding Number of Shares (in shares) | 1,084,584 | 1,236,959 | 1,252,152 |
Remaining Life | '1 year 0 months 14 days | '1 year 10 months 13 days | '2 years 9 months 29 days |
Exercisable Number of Shares (in shares) | 1,084,584 | 836,959 | ' |
Exercise Price 7.50 [Member] | ' | ' | ' |
Warrants Outstanding And Exercisable [Line Items] | ' | ' | ' |
Exercise price (in dollars per share) | $7.50 | $7.50 | ' |
Outstanding Number of Shares (in shares) | 666,667 | 666,667 | ' |
Remaining Life | '2 years | '3 years | ' |
Exercisable Number of Shares (in shares) | 666,667 | 266,667 | ' |
Exercise Price 7.50 [Member] | ' | ' | ' |
Warrants Outstanding And Exercisable [Line Items] | ' | ' | ' |
Exercise price (in dollars per share) | $7.50 | $7.50 | ' |
Outstanding Number of Shares (in shares) | 349,117 | 417,919 | ' |
Remaining Life | '1 year | '2 years | ' |
Exercisable Number of Shares (in shares) | 349,117 | 417,919 | ' |
Exercise Price 7.50 [Member] | ' | ' | ' |
Warrants Outstanding And Exercisable [Line Items] | ' | ' | ' |
Exercise price (in dollars per share) | $7.50 | $7.50 | ' |
Outstanding Number of Shares (in shares) | 68,800 | 152,373 | ' |
Remaining Life | '1 year | '1 year | ' |
Exercisable Number of Shares (in shares) | 68,800 | 152,373 | ' |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | ||||||||||
Jul. 31, 2014 | Jul. 31, 2013 | Sep. 06, 2012 | Oct. 31, 2013 | Jul. 31, 2014 | Jul. 31, 2013 | Feb. 28, 2013 | Oct. 31, 2012 | Jul. 31, 2014 | Jul. 31, 2013 | Aug. 31, 2013 | Apr. 30, 2014 | Oct. 31, 2013 | Sep. 30, 2013 | Apr. 30, 2014 | Apr. 30, 2014 | Oct. 31, 2013 | Oct. 31, 2013 | Oct. 31, 2013 | Oct. 31, 2013 | |
Namibia Exploration, Inc. [Member] | HCN [Member] | Father-In-Law of Chief Executive Officer [Member] | Father-In-Law of Chief Executive Officer [Member] | Carter E&P [Member] | Galveston Bay Energy, LLC [Member] | Father Of Chief Financial Officer [Member] | Father Of Chief Financial Officer [Member] | Terminated Officer in Corpus Christi Office [Member] | Chairman' Nephew [Member] | Chairman' Nephew [Member] | Chairman' Nephew [Member] | Chairman' Nephew [Member] | Chairman' Nephew [Member] | Unrelated party in which Michael Watts has minority interest [Member] | Unrelated party in which Michael Watts has minority interest [Member] | HCN obligation [Member] | HCN obligation [Member] | |||
acre | Namibia Exploration, Inc. [Member] | Proceeds From Sale Of Stock [Member] | Proceeds from loan [Member] | Settled with a receivable [Member] | Settled with cash [Member] | |||||||||||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue generated from Barge Canal properties | $39,274 | $643,203 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lease operating costs incurred from Barge Canal properties | 23,259 | 224,047 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Overhead costs incurred | 0 | 28,038 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding accounts receivable at period end | 0 | 91,967 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding accounts payable at year end | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of working interest sold (in hundredths) | ' | ' | ' | ' | ' | ' | 2.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock issued during period for acquisition, shares (in shares) | ' | ' | 8,396,667 | ' | ' | ' | ' | 8,396,667 | ' | ' | ' | ' | 191,667 | ' | ' | ' | ' | ' | 619,960 | ' |
Number of acre tract of unevaluated property (in acres) | ' | ' | ' | ' | ' | ' | 366.85 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage working interest purchased (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Land acquisition costs | ' | ' | ' | ' | ' | ' | 1,541 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash consideration associated with conveying properties to terminated officer | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding billed and unbilled joint interest billings owed by related party | ' | ' | ' | ' | ' | ' | ' | ' | 58,014 | 84,806 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Due to related parties | 165,542 | 301,378 | ' | ' | ' | ' | ' | ' | 0 | 15,046 | ' | ' | ' | ' | ' | ' | ' | ' | 2,400,000 | ' |
Expense recognized from consulting contract with related party | ' | ' | ' | ' | ' | 196,384 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interst expense | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Due from employee | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | 1,859,879 | ' | ' | ' |
Proceeds from Related Party Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -675,000 | ' | ' | -275,000 | -400,000 | ' | 750,000 | ' | ' |
Interest and late fees | ' | ' | ' | $553,630 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $553,630 | $25,000 |
Income_Taxes_Narrative_Details
Income Taxes (Narrative) (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
Income Taxes [Abstract] | ' | ' |
Net loss before income taxes | ($6,550,250) | ($37,657,165) |
Net operating loss carry forwards | $15,732,204 | ' |
Beginning year of expiration of operating loss carry forwards | 1-Jan-27 | ' |
Income_Taxes_Reconciliation_of
Income Taxes (Reconciliation of Income Tax Provision at the Statutory Rate) (Details) | 12 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
Income Taxes [Abstract] | ' | ' |
US statutory federal rate (in hundredths) | 35.00% | 35.00% |
State income tax rate (in hundredths) | 0.58% | 0.58% |
Equity-based compensation (in hundredths) | -5.16% | -33.62% |
Gain on derivative warrants (in hundredths) | 0.00% | 0.93% |
Gain on sale of securities (in hundredths) | 0.00% | -0.33% |
Other (in hundredths) | -6.64% | -0.50% |
Net operating loss (in hundredths) | -23.70% | -1.75% |
Effective income tax rate (in hundredths) | 0.08% | 0.31% |
Income_Taxes_Schedule_of_Defer
Income Taxes (Schedule of Deferred Tax Assets) (Details) (USD $) | Jul. 31, 2014 | Jul. 31, 2013 |
Income Taxes [Abstract] | ' | ' |
Stock based compensation | $338,078 | $713,867 |
Property, including depreciable property | -3,122,873 | -2,980,005 |
Asset retirement obligation | 4,168,049 | 3,942,918 |
Net operating loss carry-forward | 5,596,732 | 3,846,783 |
Other | 20,860 | 42,368 |
Deferred tax assets, gross | 7,000,846 | 5,565,931 |
Valuation allowance for deferred tax assets | -7,000,846 | -5,565,931 |
Total deferred tax assets | $0 | $0 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | ||
Jul. 31, 2014 | Jul. 31, 2013 | 31-May-12 | |
LetterofCredit | |||
Commitments And Contingencies [Line Items] | ' | ' | ' |
Contingency accrued | ' | $232,974 | ' |
Cash settlement to be paid by Galveston Bay | 35,000 | ' | ' |
Stock settlement to be paid by Hydrocarb | 65,000 | ' | ' |
Cost of renewal easements | 400,000 | ' | ' |
Rent expense | 186,463 | 211,346 | ' |
Monthly compression and handling fees | 1,000 | ' | ' |
Number of letters of credit in favor of the Railroad Commission of Texas | 2 | ' | ' |
Debt instrument, face amount | ' | ' | 18,375 |
Schedule of prepaid balances [Abstract] | ' | ' | ' |
Prepaid letter of credit fees | 101,251 | 101,850 | ' |
Amortization | -8,488 | -8,488 | ' |
Net prepaid letter of credit fees | 92,763 | 93,362 | ' |
Letter of Credit One [Member] | ' | ' | ' |
Commitments And Contingencies [Line Items] | ' | ' | ' |
Debt instrument, face amount | 6,610,000 | ' | ' |
Debt instrument, fee percentage (in hundredths) | 1.50% | ' | ' |
Letter Of Credit Two [Member] | ' | ' | ' |
Commitments And Contingencies [Line Items] | ' | ' | ' |
Debt instrument, face amount | 120,000 | ' | ' |
Debt instrument, fee percentage (in hundredths) | 1.50% | ' | ' |
Houston, Texas Office [Member] | ' | ' | ' |
Commitments And Contingencies [Line Items] | ' | ' | ' |
Operating lease, term of lease | '3 years | ' | ' |
Operating lease, term of lease extension | '3 years | ' | ' |
Monthly rental payments | 6,406 | ' | ' |
Monthly rental payments, year two | 6,673 | ' | ' |
Monthly rental payments, year three | 6,940 | ' | ' |
Accounts payable and accrued expenses [Member] | ' | ' | ' |
Commitments And Contingencies [Line Items] | ' | ' | ' |
Environmental remediation expense | 150,000 | 150,000 | ' |
Minimum [Member] | ' | ' | ' |
Commitments And Contingencies [Line Items] | ' | ' | ' |
Loss contingency, estimate | 150,000 | ' | ' |
Maximum [Member] | ' | ' | ' |
Commitments And Contingencies [Line Items] | ' | ' | ' |
Loss contingency, estimate | $900,000 | ' | ' |
Additional_Financial_Statement2
Additional Financial Statement Information (Schedule of Other Current Assets) (Details) (USD $) | Jul. 31, 2014 | Jul. 31, 2013 |
Additional Financial Statement Information [Abstract] | ' | ' |
Prepaid letter of credit fees | $92,763 | $93,362 |
Prepaid insurance | 287,743 | 184,138 |
Other prepaid expenses | 63,143 | 11,101 |
Cash call paid to operator | 0 | 24,225 |
Prepaid land use fees | 0 | 28,728 |
Accrued interest income | 2,671 | 4,388 |
Total other current assets | 446,320 | 345,942 |
Other receivables, allowance for doubtful accounts | $70,742 | $58,585 |
Additional_Financial_Statement3
Additional Financial Statement Information (Schedule of Property and Equipment) (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
Property, Plant and Equipment [Line Items] | ' | ' |
Total property and equipment | $302,553 | $174,998 |
Less accumulated depreciation | -135,590 | -116,945 |
Net book value | 166,963 | 58,053 |
Depreciation expense | 36,894 | 61,215 |
Furniture and Fixtures [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Approximate Life | '5 years | ' |
Total property and equipment | 24,085 | 8,814 |
Marine vessels [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Approximate Life | '5 years | ' |
Total property and equipment | 109,742 | 17,614 |
Vehicles [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Approximate Life | '5 years | ' |
Total property and equipment | 40,496 | 65,807 |
Computer equipment and software [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Approximate Life | '2 years | ' |
Total property and equipment | 126,143 | 82,466 |
Leasehold Improvements [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Approximate Life | '2 years | ' |
Total property and equipment | 2,087 | 0 |
Other Depreciable Property [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Approximate Life | '2 years | ' |
Total property and equipment | $0 | $297 |
Additional_Financial_Statement4
Additional Financial Statement Information (Schedule of Accounts Payable and Accrued Expenses) (Details) (USD $) | Jul. 31, 2014 | Jul. 31, 2013 |
Additional Financial Statement Information [Abstract] | ' | ' |
Trade payables | $2,686,966 | $2,503,820 |
Accrued payroll | -76,064 | 151,577 |
Accrued interest and fees | 37,853 | 500 |
Revenue payable | 5,790 | 4,717 |
Local taxes and royalty payable | 111,699 | 128,470 |
Federal and state income taxes payable | 29,431 | 27,000 |
Total accounts payable and accrued expenses | $2,795,675 | $2,816,084 |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 31-May-12 | Nov. 06, 2014 | Aug. 15, 2014 | Nov. 06, 2014 | Aug. 15, 2014 | Aug. 15, 2014 |
Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | ||
Galveston Bay, LLC [Member] | Term Loan [Member] | Term Loan [Member] | ||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' |
Term Loan face amount | $18,375 | ' | ' | ' | ' | $4,000,000 |
Term Loan amount outstanding | ' | ' | ' | ' | ' | 4,545,454 |
Discount rate (in hundredths ) | ' | ' | ' | ' | ' | 12.00% |
Structuring fee | ' | ' | ' | ' | 90,909 | ' |
Structuring fee (in hundredths) | ' | ' | ' | ' | ' | 2.00% |
Debt Issuance Cost | ' | ' | ' | ' | 172,824 | ' |
Placement fee (in hundredths) | ' | ' | ' | ' | 5.00% | ' |
Placement fee | ' | ' | ' | ' | 227,273 | ' |
Consulting fee (in hundredths) | ' | ' | ' | ' | 1.00% | ' |
Consulting Fee | ' | ' | ' | ' | 45,455 | ' |
Proceed from long term debt | ' | ' | ' | ' | 3,463,539 | ' |
Additional borrowing capacity | ' | ' | ' | ' | ' | 1,000,000 |
Sale of equity | ' | ' | ' | ' | 750,000 | ' |
Credit agreement period sale of equity | ' | ' | ' | ' | '150 days | ' |
Structuring Fee on additional borrowings (in hundredths) | ' | ' | ' | ' | 2.00% | ' |
Threshold Revenues | ' | ' | ' | ' | 900,000 | ' |
Interest rate under condition one (in hundredths) | ' | ' | ' | ' | 16.00% | ' |
Interest rate under condition two (in hundredths) | ' | ' | ' | ' | 14.00% | ' |
Interest rate in case of default (in hundredths) | ' | ' | 24.00% | ' | ' | ' |
Restricted shares issued | ' | ' | ' | ' | 60,000 | ' |
Restricted shares issued after 12 months from effective date (in shares) | ' | ' | ' | ' | 32,500 | ' |
Restricted shares issued after 18 months from effective date (in shares) | ' | ' | ' | ' | 32,500 | ' |
Restricted shares issued after 21 months from effective date (in shares) | ' | ' | ' | ' | 25,000 | ' |
Credit agreement effective date | ' | ' | ' | ' | 15-Aug-14 | ' |
Voting stock percentage (in hundredths) | ' | ' | 25.00% | ' | ' | ' |
Payables in case of default | ' | ' | ' | ' | 250,000 | ' |
Period of default | ' | ' | ' | ' | '30 days | ' |
Cash payment settlement | ' | ' | ' | $35,000 | ' | ' |
Common stock issued in settlement (in shares) | ' | 65,000 | ' | ' | ' | ' |
Supplemental_Oil_and_Gas_Infor2
Supplemental Oil and Gas Information (Unaudited) (Narrative) (Details) | Jul. 31, 2014 | Jul. 31, 2013 |
Supplemental Oil And Gas Information Unaudited [Abstract] | ' | ' |
Average oil and gas price per barrel | 100.11 | 92.52 |
Average gas price per MMbtu | 4.1 | 3.51 |
Supplemental_Oil_and_Gas_Infor3
Supplemental Oil and Gas Information (Unaudited) (Schedule of Net Proved Reserves) (Details) | 12 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
MMcf | MMcf | |
Reserve Quantities [Line Items] | ' | ' |
Beginning Balance | 16,688,590 | 23,067,460 |
Revisions of previous estimates | 2,538,043 | -5,834,587 |
Sale of reserves in place | -636,437 | -8 |
Production | -428,185 | -544,275 |
Ending Balance | 18,162,011 | 16,688,590 |
Proved developed producing | 2,175,826 | 3,092,160 |
Proved developed non-producing | 6,087,112 | 6,376,700 |
Proved undeveloped | 9,899,073 | 7,219,730 |
Total Proved reserves | 18,162,011 | 16,688,590 |
Oil [Member] | ' | ' |
Reserve Quantities [Line Items] | ' | ' |
Beginning Balance | 659,700 | 1,388,250 |
Revisions of previous estimates | 422,261 | -667,307 |
Sale of reserves in place | -17,750 | -1 |
Production | -42,436 | -61,242 |
Ending Balance | 1,021,775 | 659,700 |
Proved developed producing | 200,981 | 256,290 |
Proved developed non-producing | 212,320 | 229,290 |
Proved undeveloped | 608,474 | 174,120 |
Total Proved reserves | 1,021,775 | 659,700 |
Gas [Member] | ' | ' |
Reserve Quantities [Line Items] | ' | ' |
Beginning Balance | 12,730,390 | 14,737,960 |
Revisions of previous estimates | 4,477 | -1,830,745 |
Sale of reserves in place | -529,937 | -2 |
Production | -173,569 | -176,823 |
Ending Balance | 12,031,361 | 12,730,390 |
Proved developed producing | 969,940 | 1,554,420 |
Proved developed non-producing | 4,813,192 | 5,000,960 |
Proved undeveloped | 6,248,229 | 6,175,010 |
Total Proved reserves | 12,031,361 | 12,730,390 |
Supplemental_Oil_and_Gas_Infor4
Supplemental Oil and Gas Information (Unaudited) (Schedule of Capitalized Costs) (Details) (USD $) | Jul. 31, 2014 | Jul. 31, 2013 |
Supplemental Oil And Gas Information Unaudited [Abstract] | ' | ' |
Unevaluated properties | $2,119,769 | $1,124,805 |
Evaluated properties | 19,153,124 | 19,857,842 |
Less impairment | -373,335 | -373,335 |
Gross capitalized costs | 20,899,558 | 20,609,312 |
Less depreciation, depletion and amortization | -3,491,420 | -2,617,478 |
Net capitalized cost | $17,408,139 | $17,991,834 |
Supplemental_Oil_and_Gas_Infor5
Supplemental Oil and Gas Information (Unaudited) (Schedule of Costs Incurred) (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
Property acquisition [Abstract] | ' | ' |
Unproved | $1,232,815 | $808,307 |
Proved | 13 | 3,000 |
Exploration | 238,112 | 404,265 |
Development | 0 | 1,732,451 |
Cost recovery | -658,195 | -196,001 |
Total costs incurred | 812,745 | 2,752,022 |
Namibia [Member] | ' | ' |
Property acquisition [Abstract] | ' | ' |
Unproved | 1,232,815 | 677,795 |
Proved | 0 | 0 |
Exploration | 173,299 | 35,860 |
Development | 0 | 0 |
Cost recovery | 0 | 0 |
Total costs incurred | 1,406,114 | 713,655 |
Unites States [Member] | ' | ' |
Property acquisition [Abstract] | ' | ' |
Unproved | 0 | 130,512 |
Proved | 13 | 3,000 |
Exploration | 64,813 | 368,405 |
Development | 0 | 1,732,451 |
Cost recovery | -658,195 | -196,001 |
Total costs incurred | ($593,369) | $2,038,367 |
Supplemental_Oil_and_Gas_Infor6
Supplemental Oil and Gas Information (Unaudited) (Schedule of Costs Excluded by Year) (Details) (USD $) | Jul. 31, 2014 | Jul. 31, 2013 |
Supplemental Oil And Gas Information Unaudited [Abstract] | ' | ' |
Property Acquisition | $1,232,815 | $677,795 |
Exploration | 173,299 | 35,860 |
Total | $1,406,114 | $713,655 |
Supplemental_Oil_and_Gas_Infor7
Supplemental Oil and Gas Information (Unaudited) (Schedule of Costs Excluded by Country) (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items] | ' | ' |
Ending Balance | $1,406,114 | $713,655 |
Namibia [Member] | ' | ' |
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items] | ' | ' |
Beginning Balance | 713,655 | 0 |
Additional Cost Incurred | 1,406,114 | 713,655 |
Cost Recovery | ' | 0 |
Costs Transferred to DD&A Pool | ' | 0 |
Ending Balance | 2,119,769 | 713,655 |
Unites States [Member] | ' | ' |
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items] | ' | ' |
Beginning Balance | 0 | 265,639 |
Additional Cost Incurred | 0 | 278,090 |
Cost Recovery | ' | -132,662 |
Costs Transferred to DD&A Pool | ' | -411,067 |
Ending Balance | $0 | $0 |
Supplemental_Oil_and_Gas_Infor8
Supplemental Oil and Gas Information (Unaudited) (Schedule of Standardized Measure) (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
Supplemental Oil And Gas Information Unaudited [Abstract] | ' | ' |
Future cash inflows | $159,283,690 | $113,603,450 |
Future production costs | -54,437,098 | -55,897,070 |
Future development costs | -43,054,816 | -41,794,284 |
Future income tax expenses | -21,627,122 | -5,569,234 |
Future net cash flows | 40,164,654 | 10,342,862 |
10% annual discount for estimated timing of cash flows | -15,807,988 | -3,990,069 |
Future net cash flows at end of year | $24,356,666 | $6,352,793 |
Supplemental_Oil_and_Gas_Infor9
Supplemental Oil and Gas Information (Unaudited) (Schedule of Changes in Standardized Measure) (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
Supplemental Oil And Gas Information Unaudited [Abstract] | ' | ' |
Standardized measure of discounted future net cash flows at beginning of year | $6,352,793 | $33,663,886 |
Net changes in prices and production costs | 20,980,014 | -37,623,010 |
Changes in estimated future development costs | -764,412 | 4,205,045 |
Sales of oil and gas produced, net of production costs | -151,783 | -2,510,339 |
Discoveries and extensions | 0 | 0 |
Purchases of minerals in place | 0 | 0 |
Sales of minerals in place | -2,228,023 | -17 |
Revisions of previous quantity estimates | 8,885,117 | -12,391,911 |
Development costs incurred | 0 | 1,124,107 |
Change in income taxes | -9,694,393 | 14,705,973 |
Accretion of discount | 977,353 | 5,179,059 |
Standardized measure of discounted future net cash flows at year end | $24,356,666 | $6,352,793 |
Recovered_Sheet1
Supplemental Oil and Gas Information (Unaudited) (Schedule of Results of Operations for Producing Activities) (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
Supplemental Oil And Gas Information Unaudited [Abstract] | ' | ' |
Net revenues from production | $5,065,096 | $7,070,540 |
Expenses [Abstract] | ' | ' |
Lease operating expense | 4,913,313 | 4,560,201 |
Accretion | 1,043,928 | 1,056,508 |
Operating expenses | 5,957,241 | 5,616,709 |
Depreciation, depletion, and amortization | 873,942 | 1,059,803 |
Total expenses | 6,831,183 | 6,676,512 |
Income before income tax | -1,766,087 | 394,028 |
Income tax expenses | 0 | -137,910 |
Results of operations | -1,766,087 | 256,118 |
Depreciation, depletion and amortization rate per net equivalent MCFE | $2.04 | $1.95 |