Lilis Energy (LLEX) 10-Q 19 Aug 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 12, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	LILIS ENERGY, INC.
Entity Central Index Key	1,437,557
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		27,415,414

Condensed Balance Sheets

Condensed Balance Sheets - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Current assets:
Cash	$ 207,864	$ 509,628
Restricted cash	2,726	183,707
Accounts receivable (net of allowance of $80,000)	912,418	831,706
Prepaid assets	101,849	54,064
Total current assets	1,224,857	1,579,105
Oil and gas properties (full cost method), at cost:
Evaluated properties	46,341,837	46,268,756
Unevaluated acreage, excluded from amortization	2,885,758	2,885,758
Wells in progress, excluded from amortization	6,041,743	6,041,743
Total oil and gas properties, at cost	55,269,338	55,196,257
Less accumulated depreciation, depletion, amortization, and impairment	(30,932,954)	(24,550,217)
Oil and gas properties at cost, net	24,336,384	30,646,040
Other assets:
Office equipment net of accumulated depreciation of $122,657 and $107,712, respectively.	58,878	73,823
Deferred financing costs, net	274,801	60,000
Restricted cash and deposits	466,325	215,541
Total other assets	800,004	349,364
Total Assets	26,361,245	32,574,509
Current liabilities:
Dividends accrued on preferred stock	360,000	180,000
Accrued expenses for drilling activity	5,734,131	5,734,131
Accounts payable	767,599	975,749
Accrued expenses	2,158,966	$ 1,248,995
Short-term loan	250,000
Current portion of term loan	500,000
Total current liabilities	9,770,696	$ 8,138,875
Long term liabilities:
Asset retirement obligation	203,939	$ 200,063
Term loan, net of current portion, net of discount	2,202,637
Convertible debentures, net of discount	6,846,465	$ 6,840,076
Warrant liability	716,250	393,788
Convertible debentures conversion derivative liability	1,523,339	1,249,442
Total long-term liabilities	11,492,630	8,683,369
Total liabilities	$ 21,263,326	$ 16,822,244
Commitments and contingencies
Conditionally redeemable 6% preferred stock, $0.0001 par value: 7,000 shares authorized; 2,000 shares issued and outstanding with a liquidation preference of $2,060,000 as of June 30, 2015 and $2,030,000 as of December 31, 2014.	$ 1,565,911	$ 1,686,102
Stockholders' equity
Series A Preferred stock, $0.0001 par value; stated rate $1,000:10,000,000 shares authorized; 7,500 issued and outstanding with a liquidation preference of $7,800,000 as of June 30, 2015 and $7,650,000 as of December 31, 2014.	6,794,000	6,794,000
Common stock, $0.0001 par value: 100,000,000 shares authorized; 27,314,094 shares issued and outstanding as of June 30, 2015 and 26,988,240 as of December 31, 2014.	2,732	2,699
Additional paid in capital	157,735,863	155,097,785
Accumulated deficit	(161,000,587)	(147,828,321)
Total stockholders' equity	3,532,008	14,066,163
Total Liabilities, Redeemable Preferred Stock and Stockholders' Equity	$ 26,361,245	$ 32,574,509

Condensed Balance Sheets (Paren

Condensed Balance Sheets (Parenthetical) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Balance Sheets [Abstract]
Allowance related to accounts receivable	$ 80,000	$ 80,000
Accumulated depreciation of office equipment	$ 122,657	$ 107,712
Redeemable 6% preferred stock, par value	$ 0.0001	$ 0.0001
Redeemable 6% preferred stock, shares authorized	7,000	7,000
Redeemable 6% preferred stock, shares issued	2,000	2,000
Redeemable 6% preferred stock, shares outstanding	2,000	2,000
Redeemable 6% preferred stock, liquidation preferences	$ 2,060,000	$ 2,030,000
Series A Preferred stock, par value	$ 0.0001	$ 0.0001
Series A Preferred Stock, value stated rate	$ 1,000	$ 1,000
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Series A Preferred Stock, shares issued	7,500	7,500
Series A Preferred Stock, shares outstanding	7,500	7,500
Preferred Stock, liquidation preference	$ 7,800,000	$ 7,650,000
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	27,314,094	26,988,240
Common stock, shares outstanding	27,314,094	26,988,240

Condensed Statements of Operati

Condensed Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Revenue:
Oil sales	$ 136,776	$ 979,523	$ 226,161	$ 1,679,609
Gas sales	26,253	102,324	48,196	189,990
Operating fees	$ 8,888	$ 42,152	$ 15,720	76,881
Realized gain on commodity price derivatives				11,143
Total revenue	$ 171,917	$ 1,123,999	$ 290,077	1,957,623
Costs and expenses:
Production costs	66,824	221,260	87,216	637,583
Production taxes	4,406	101,230	15,220	194,910
General and administrative	3,051,214	2,643,063	5,404,092	5,601,478
Depreciation, depletion and amortization	191,068	$ 570,403	434,648	$ 959,039
Impairment of evaluated oil and gas properties	504,897		5,966,909
Total costs and expenses	3,818,409	$ 3,535,956	11,908,085	$ 7,393,010
Loss from operations	(3,646,492)	(2,411,957)	(11,618,008)	(5,435,387)
Other income (expenses):
Other income	$ 785	$ 44	$ 793	97
Inducement expense				(6,661,275)
Change in fair value of convertible debentures conversion derivative liability	$ (161,806)	$ 3,630,015	$ (273,897)	$ (5,393,809)
Change in fair value of warrant liability	(217,250)		(266,212)
Change in fair value of conditionally redeemable 6% preferred stock	74,305		120,191
Interest expense	(553,522)	$ (2,135,078)	(775,132)	$ (3,346,550)
Total other expenses	(857,488)	1,494,981	(1,194,257)	15,401,537
Net loss	$ (4,503,980)	(916,976)	$ (12,812,265)	(20,836,924)
Accretion of Series A Convertible Preferred Stock		(3,566,895)		(3,566,895)
Accrued dividends for Series A Convertible Preferred Stock	$ (180,000)	(40,681)	$ (360,000)	(40,681)
Net loss attributable to common shareholders	$ (4,683,980)	$ (4,524,552)	$ (13,172,265)	$ (24,444,500)
Net loss per common share basic and diluted	$ (0.17)	$ (0.16)	$ (0.49)	$ (0.93)
Weighted average shares outstanding:
Basic and diluted	27,154,094	27,498,284	27,071,625	26,292,183

Condensed Statements of Operat5

Condensed Statements of Operations (Parenthetical) (Unaudited)	6 Months Ended
	Jun. 30, 2015
Statements Of Operations [Abstract]
Percentage of redeemable preferred stock	6.00%

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash flows from operating activities:
Net loss	$ (12,812,265)	$ (20,836,924)
Adjustments to reconcile net loss to net cash used in operating activities:
Inducement expense		6,661,275
Common stock issued to investment bank for fees related to conversion of convertible debentures		686,273
Equity instruments issued for services and compensation	$ 2,638,110	1,177,039
Amortization of deferred financing cost	51,507	134,398
Change in fair value of convertible debentures conversion derivative liability	273,897	$ 5,393,809
Change in fair value of warrant liability	266,212
Change in fair value of conditionally redeemable 6% preferred stock	(120,191)
Depreciation, depletion, amortization and accretion of asset retirement obligation	434,648	$ 989,126
Impairment of evaluated oil and gas properties	5,966,909
Accretion of debt discount	15,276	$ 772,460
Changes in operating assets and liabilities:
Accounts receivable	(80,712)	(147,166)
Restricted cash	(69,803)	95,460
Other assets	(47,784)	431,004
Accounts payable and other accrued expenses	701,821	178,422
Net cash used in operating activities	$ (2,782,375)	(4,464,824)
Cash flows from investing activities:
Acquisition of undeveloped acreage		(305,000)
Drilling capital expenditures	$ (73,081)	(109,057)
Additions of oil and gas properties		(24,030)
Additions of office equipment		(768)
Net cash used in investing activities	$ (73,081)	(438,855)
Cash flows from financing activities:
Net proceeds from issuance of Common Stock		5,327,687
Net proceeds from issuance of Series A Preferred Stock		$ 4,940,992
Dividend payments on Preferred Stock	$ (180,000)
Debt issuance costs	(266,308)
Proceeds from issuance of short-term loan	250,000
Proceeds from issuance of debt	3,000,000	$ 1,000,000
Repayment of debt	(250,000)	(5,081,213)
Net cash provided by financing activities	2,553,692	6,187,466
Increase (decrease) in cash	(301,764)	1,283,787
Cash at beginning of period	509,628	165,365,000
CASH AT END OF THE PERIOD	207,864	$ 1,449,152
Supplemental disclosure:
Cash paid for interest	$ 147,680
Cash paid for income taxes
Non-cash transactions:
Fair value of warrants issued as debt discount	$ 56,250
Acquisition of oil and gas assets for accounts payable and accrued interest		$ 5,198,193
Transfer from derivative liability to equity classification		5,031,070
Issuance of Common Stock for payment of convertible debentures		8,744,836
Series A Preferred Stock subscription receivable		1,853,000
Common Stock issued for convertible note interest		$ 148,129

Organization

Organization	6 Months Ended
	Jun. 30, 2015
Organization [Abstract]
ORGANIZATION	NOTE 1 - ORGANIZATION On September 21, 2009, Universal Holdings, Inc. (“Universal”), a Nevada corporation, completed the acquisition of Coronado Acquisitions, LLC (“Coronado”). Under the terms of the acquisition, Coronado was merged into Universal. On October 12, 2009, Universal changed its name to Recovery Energy, Inc. On December 1, 2013, Recovery Energy, Inc. changed its name to Lilis Energy, Inc. (“Lilis”, “Lilis Energy”, “we”, “our”, and the “Company”). The acquisition was accounted for as a reverse acquisition with Coronado being treated as the acquirer for accounting purposes. Accordingly, the financial statements of Coronado and Recovery Energy have been adopted as the historical financial statements of Lilis. The Company is an independent oil and gas exploration and production company focused on the Denver-Julesburg Basin (“DJ Basin”) where it holds 22,500 net acres. Lilis drills for, operates and produces oil and natural gas wells through the Company’s land holdings located in Wyoming, Colorado, and Nebraska. All references to production, sales volumes and reserves quantities are net to the Company’s interest unless otherwise indicated.

Liquidity

Liquidity	6 Months Ended
	Jun. 30, 2015
Liquidity [Abstract]
LIQUIDITY	NOTE 2 - LIQUIDITY Going Concern The Company’s financial statements for the three and six months ended June 30, 2015 have been prepared on a going concern basis. The Company has reported net operating losses during the three and six months ended June 30, 2015 and for the past five years. This history of operating losses, along with the recent decrease in commodity prices, which may adversely affect the Company’s ability to access capital it needs to continue operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts of liabilities, that might result from this uncertainty. The Company is currently looking for additional capital, potential merger candidates, or funding sources which may offer improved opportunities to obtain capital to develop its properties, acquire oil and gas properties and to cure any potential defaults in connection with our credit facility and current liabilities deficiencies. The Company is also focused on maintaining production while efficiently managing, and in some cases reducing, its operating and general and administrative expenses. The Company is also evaluating asset divestiture opportunities to provide capital to reduce its indebtedness. Successfully completing a capital infusion will eliminate doubt about the Company’s ability to continue as a going concern. As of June 30, 2015, the Company was not in compliance with the financial covenant relating to the total debt to EBITDAX ratio required to be maintained by the Company and measured as of that date pursuant to the Credit Agreement. Additionally, the Company did not make the required principal payment due on July 1, 2015. On August 6, 2015, Heartland applied cash from the Company’s Debt Service Reserve Account (as defined in the Credit Agreement) towards the overdue principal payment amount of $125,000 with applicable interest in the amount of $30,000 for a total aggregate payment of $155,000. The Company has reported this non-compliance to Heartland and received a waiver on the covenants violations. Liquidity Plan As of June 30, 2015, the Company had a negative working capital balance and a cash balance of approximately $8.55 million and $208,000, respectively. Also, as of June 30, 2015, the Company had $2.75 million outstanding under its credit agreement, as amended, (the “Credit Agreement”) with Heartland Bank (“Heartland”), as administrative agent, and the financial institutions from time to time signatory thereto (each individually a “Lender,” and any and all such financial institutions collectively the “Lenders”). Of this amount, $500,000 is due within one year. The Company presently has $6.85 million outstanding under its 8% Senior Secured Convertible Debentures due 2018 (the “Debentures”). As of August 1, 2015, the Company is producing approximately 43 barrels of oil equivalent (“BOE”) a day from eight economically producing wells. On January 8, 2015, the Company entered into the Credit Agreement with Heartland, as administrative agent, which provides for a three-year senior secured term loan in an initial aggregate principal amount of $3.0 million, which principal amount may be increased to a maximum principal amount of $50.0 million at the request of the Company, subject to certain conditions, and pursuant to an accordion advance provision in the Credit Agreement. The availability of additional funds pursuant to the accordion advance is subject to the discretion of the lenders, and is generally based on the value of the Company’s proved developed producing (“PDP”) and proved undeveloped (“PUD”) reserves. The Company intends to use proceeds borrowed under the Credit Agreement to fund producing property acquisitions in North America, drill wells in the core of the Company’s lease positions and to fund its working capital. As of August 17, 2015, $2.75 million was outstanding under the Credit Agreement. On April 30, 2015, the Company entered into an Asset Purchase Agreement (the “APA”) with Swan Exploration, LLC (“Swan”) to acquire non-operated leasehold working interests including interests in 53 producing wells and a 640 gross (499 net) acre block of undeveloped leasehold in the core area of the Wattenberg Field in Weld County, Colorado. On June 9, 2015, the Company and Swan entered into an amendment to the APA (the “First Amendment”) and the Company agreed to acquire an additional 375 net acres from previously granted right of first refusal acreage, bringing the total undeveloped acreage being acquired to 1,015 net acres in the core area of the Wattenberg Field targeting the Niobrara and Codell formations. The additional acreage includes authorization for expenditures (“AFE”) in place for 11 new wells with an average working interest of 4.48% and a total drilling commitment of $3.2 million. Additionally, pursuant to the First Amendment, Lilis has agreed to assign to Swan an 8% carried working interest on future drilling on the south half of an undeveloped 640-acre tract within the originally agreed upon acquisition acreage. It is anticipated that the Company would pay an aggregate of approximately $4.8 million for its proportionate share of future drilling and completion costs, currently in varying stages of development pursuant to the outstanding AFEs, which includes the $3.2 million referenced above. Due to current market conditions and volatility in the oil and gas market, the Company and Swan have entered into a subsequent amendment to extend the closing date of the transaction and have mutually agreed to further negotiate the final purchase price. The Company received a letter from Swan indicating a default on the acquisition, however, discussions remain ongoing and the Company expects to close the transaction in the third quarter of 2015, pending the success of continuing negotiations and the Company’s access to capital. On June 6, 2014, T.R. Winston & Company, LLC (“TR Winston”) executed a commitment to purchase or affect the purchase by third parties of an additional $15.0 million in Series A 8% Convertible Preferred Stock, to be consummated within 90 days thereof. The agreement was subsequently extended and expired on February 22, 2015. On February 25, 2015, the Company and TR Winston agreed in principal to a replacement commitment, pursuant to which TR Winston has agreed to purchase or affect the purchase by third parties of an additional $7.5 million in Series A 8% Convertible Preferred Stock, to be consummated no later than February 23, 2016, with all other terms substantially the same as those of the original commitment. This has not yet occurred. The Company will require additional capital to satisfy its obligations; to fund its current drilling commitments, as well as its acquisition and capital budget plans; to help fund its ongoing overhead; and to provide additional capital to generally improve its negative working capital position. The Company anticipates that such additional funding will be provided by a combination of capital raising activities, including borrowing transactions, the sale of additional debt and/or equity securities, the sale of certain assets, and by the development of certain of the Company’s undeveloped properties via arrangements with joint venture partners. If the Company is not successful in obtaining sufficient cash to fund the aforementioned capital requirements, the Company would be required to curtail its expenditures and may be required to restructure its operations, sell assets on terms which may not be deemed favorable and/or curtail other aspects of its operations, including deferring all or portions of the Company’s capital budget. There is no assurance that any such funding will be available to the Company on acceptable terms, if at all.

Summary of Significant Accounti

Summary of Significant Accounting Policies and Estimates	6 Months Ended
	Jun. 30, 2015
Summary of Significant Accounting Policies and Estimates [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES	NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES Basis of Presentation The condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial statements and with Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission. Accordingly, the financial statements do not contain all information and footnotes required by U.S. GAAP for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of June 30, 2015 and the results of operations and cash flows for the periods presented. The results of operations for the three and six months ended June 30, 2015 are not necessarily indicative of the operating results for the full fiscal year for any future period. These condensed financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The Company’s accounting policies are described in the Notes to Financial Statements in its Annual Report on Form 10-K for the year ended December 31, 2014, and updated, as necessary, in this Quarterly Report on Form 10-Q. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires the Company to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates. Management evaluates estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic and commodity price environment. Although actual results may differ from these estimates under different assumptions or conditions, the Company believes that its estimates are reasonable. The most significant financial estimates are associated with the Company’s estimated volumes of proved oil and natural gas reserves, asset retirement obligations, assessments of impairment imbedded in the carrying value of undeveloped acreage and undeveloped properties, fair value of financial instruments, including derivative liabilities, depreciation and accretion, income taxes and contingencies. Oil and Gas Producing Activities The Company follows the full cost method of accounting for oil and gas operations whereby all costs related to the exploration, non-production related development and acquisition of oil and natural gas reserves are capitalized. Such costs include land acquisition costs, geological and geophysical expenses, carrying charges on non-producing properties, costs of drilling, developing and completing productive wells and/or plugging and abandoning non-productive wells, and any other costs directly related to acquisition and exploration activities. Proceeds from property sales are generally applied as a credit against capitalized exploration and development costs, with no gain or loss recognized, unless such a sale would significantly alter the relationship between capitalized costs and the proved reserves attributable to these costs. A significant alteration would typically involve a sale of 25% or more of proved reserves. The Company accounts for its unproven long-lived assets in accordance with Accounting Standards Codification (“ASC”) Topic 360-10-05, Accounting for the Impairment or Disposal of Long-Lived Assets Depletion of exploration and development costs and depreciation of wells and tangible production assets is computed using the units-of-production method based upon estimated proved oil and gas reserves. Costs included in the depletion base to be amortized include (a) all proved capitalized costs including capitalized asset retirement costs net of estimated salvage values, less accumulated depletion, (b) estimated future development costs to be incurred in developing proved reserves; and (c) estimated decommissioning and abandonment/restoration costs, net of estimated salvage values, that are not otherwise included in capitalized costs. The costs of undeveloped acreage are withheld from the depletion base until it is determined whether or not proved reserves can be assigned to the properties. When proved reserves are assigned to such properties or one or more specific properties are deemed to be impaired, the cost of such properties or the amount of the impairment is added to the full cost pool which is subject to depletion calculations. Under the full cost method of accounting, capitalized oil and gas property costs less accumulated depletion and net of deferred income taxes may not exceed an amount equal to the sum of the present value, discounted at 10%, of estimated future net revenues from proved oil and gas reserves and the cost of unproved properties not subject to amortization (without regard to estimates of fair value), or estimated fair value, if lower, of unproved properties that are not subject to amortization. Should capitalized costs exceed this ceiling, an impairment expense is recognized. During the three and six months ended June 30, 2015, the Company recorded a $505,000 and a $5.967 million impairment, respectively. No impairment was recorded in 2014. The present value of estimated future net cash flows was computed by applying a flat oil price to forecast revenues from estimated future production of proved oil and gas reserves as of period-end, less estimated future expenditures to be incurred in developing and producing the proved reserves (assuming the continuation of existing economic conditions), less any applicable future taxes. Wells in Progress Wells in progress connotes wells that are currently in the process of being drilled or completed or otherwise under evaluation as to their potential to produce oil and gas reserves in commercial quantities. Such wells continue to be classified as wells in progress and withheld from the depletion calculation and the ceiling test until such time as either proved reserves can be assigned, or the wells are otherwise abandoned. Upon either the assignment of proved reserves or abandonment, the costs for these wells are then transferred to the full cost pool and become subject to both depletion and the ceiling test calculations in accordance with full cost accounting under Rule 4-10 of Regulation S-X of the Securities Exchange Act of 1934, as amended. Accrued Expense Accrued liabilities are probable future sacrifices of economic benefits arising from present obligations of a particular entity to transfer assets or provide service to other entities in the future as a result of past transactions or events. Below is the break-out of the accrued expense account as of June 30, 2015 and December 31, 2014. June 30, December 31, Fair-value of executive compensation $ 231,109 $ 40,000 Accrued convertible debenture interest 533,264 3,043 Board of director fees 49,272 - Accrued professional fees 249,000 78,000 Production taxes 488,000 504,000 Other payables 608,321 623,952 2,158,966 1,248,995 Asset Retirement Obligations The Company's activities are subject to various laws and regulations, including legal and contractual obligations to reclaim, remediate, or otherwise restore properties at the time the asset is permanently removed from service. Calculation of an asset retirement obligation ("ARO") requires estimates about several future events, including the life of the asset, the costs to remove the asset from service, and inflation factors. The ARO is initially estimated based upon discounted cash flows over the life of the asset and is accreted to full value over time using the Company's credit adjusted risk-free interest rate. Estimates are periodically reviewed and adjusted to reflect changes. The present value of a liability for the ARO is initially recorded when it is incurred if a reasonable estimate of fair value can be made. This is typically done when a well is completed or an asset is placed in service. When the ARO is initially recorded, the Company capitalizes the cost (the asset retirement cost or "ARC") by increasing the carrying value of the related asset. ARCs related to wells are capitalized to the full cost pool and are subject to depletion. Over time, the liability increases for the change in its present value (accretion of ARO), while the net capitalized cost decreases over the useful life of the asset as depletion expense is recognized. In addition, ARCs are included in the ceiling test calculation for valuing the full cost pool. The fair value of the Company’s asset retirement obligation liability is calculated at the point of inception by taking into account (i) the cost of abandoning oil and gas wells, which is based on the Company’s and/or industry’s historical experience for similar work, or estimates from independent third-parties; (ii) the economic lives of its properties, which are based on estimates from reserve engineers; (iii) the inflation rate; and (iv) the credit adjusted risk-free rate, which takes into account the Company’s credit risk and the time value of money. Given the unobservable nature of the inputs, the initial measurement of the asset retirement obligation liability is deemed to use Level 3 inputs. As of June 30, 2015, the Company had an ARO balance of $204,000 and has accreted $5,000 and $9,000 for the three and six months ended June 30, 2015, respectively. During the three and six months ended June 30, 2014, the Company accreted $24,000 and $44,000, respectively. Revenue Recognition The Company derives revenue primarily from the sale of produced natural gas and crude oil. The Company reports revenue as the gross amount received before taking into account production taxes and transportation costs, which are reported as separate expenses and are included in oil and gas production expense in the accompanying consolidated statements of operations. Revenue is recorded in the month the Company’s production is delivered to the purchaser, but payment is generally received between 30 and 90 days after the date of production. No revenue is recognized unless it is determined that title to the product has transferred to the purchaser. At the end of each month, the Company estimates the amount of production delivered to the purchaser and the price the Company will receive. The Company uses its knowledge of its properties, its historical performance, existing contracts, NYMEX and local spot market prices, quality and transportation differentials, and other factors as the basis for these estimates. Impairment of Long-lived Assets The Company accounts for long-lived assets (other than oil and gas properties) at cost. Other long-lived assets consist principally of property and equipment and identifiable intangible assets with finite useful lives (subject to amortization, depletion, and depreciation). The Company may impair these assets whenever events or changes in circumstances indicate that the carrying amount of such assets may not be fully recoverable. Recoverability is measured by comparing the carrying amount of an asset to the expected undiscounted future net cash flows generated by the asset. If it is determined that the asset may not be recoverable, and if the carrying amount of an asset exceeds its estimated fair value, an impairment charge is recognized to the extent of the difference. Net Loss per Common Share Earnings (losses) per share are computed based on the weighted average number of common shares outstanding during the period presented. Diluted earnings per share are computed using the weighted-average number of common shares outstanding plus the number of common shares that would be issued assuming exercise or conversion of all potentially dilutive common shares. Potentially dilutive securities, such as shares issuable upon the conversion of debt or preferred stock, and exercise of warrants and options, are excluded from the calculation when their effect would be anti-dilutive. As of June 30, 2015 and 2014 shares underlying options, warrants, preferred stock and Debentures have been excluded from the diluted share calculations as they were anti-dilutive as a result of net losses incurred. The Company had the following Common Stock equivalents at June 30, 2015 and 2014: June 30, June 30, Stock Options 6,150,000 5,100,000 Unvested Restricted Stock (employees/directors) 1,914,001 1,779,633 Series A Preferred Stock 3,112,033 3,112,033 Warrants 15,685,331 16,506,281 Convertible Debentures 3,423,233 3,423,233 30,284,598 29,921,180 Recently Issued Accounting Pronouncements In April 2015, the FASB issued Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements – Going Concern In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers

Oil and Gas Properties & Oil an

Oil and Gas Properties & Oil and Gas Properties Acquisitions and Divestitures	6 Months Ended
	Jun. 30, 2015
Oil and Gas Properties & Oil and Gas Properties Acquisitions and Divestitures [Abstract]
OIL AND GAS PROPERTIES & OIL AND GAS PROPERTIES ACQUISITIONS AND DIVESTITURES	NOTE 4 - OIL AND GAS PROPERTIES & OIL AND GAS PROPERTIES ACQUISITIONS AND DIVESTITURES During the three and six months ended June 30, 2015, the Company did not buy or sell any of its oil and gas properties. If commodity prices stay at current early 2015 levels or decline further, the Company may incur additional full cost ceiling impairments in future quarters. Because the ceiling calculation uses rolling 12-month average commodity prices, the effect of lower quarter-over-quarter prices in 2015 compared to 2014 is a lower ceiling value each quarter. This will result in ongoing impairments each quarter until prices stabilize or improve. Impairment charges would not affect cash flow from operating activities, but would adversely affect the Company’s net income and stockholders’ equity. As a result of this lower ceiling value, during the three and six months ended June 30, 2015, the Company recognized an impairment expense on its evaluated oil and gas properties of $505,000 and $5.97 million. No impairment was recognized in three and six months ended June 30, 2014. Depreciation, depletion and amortization (“DD&A”) expenses related to the proved properties were approximately $184,000 and $416,000 for three and six months ended June 30, 2015 as compared to $512,000 and $901,000 for the three and six months ended June 30, 2014, respectively. As of June 30, 2015 and December 31, 2014, the Company had $6.04 million of wells in progress for each period, respectively, as a result of two ownership disputes. Wells in progress are related to certain wells in the Company’s core development program within the Northern Wattenberg field. The Company has capitalized and accrued approximately $5.73 million of costs through June 30, 2015 associated with certain of these wells, which had previously been in dispute. This dispute related to our ownership in certain wells being reduced and or eliminated from a purported farm-out. The operator of the producing wells had claimed that we entered into a farm-out which would have reduced our ownership in the wells. On July 8, 2015, as discussed below, the Company entered into a Settlement Agreement with the operator. During the six months ended June 30, 2015, there were no additional accrued costs associated with these wells. During 2014, the Company transferred $516,000 from wells-in progress to developed oil and natural gas properties for one of its other wells in Northern Wattenberg, when that well became producing and economic. The amount transferred to producing properties represents 12.5% of the total 25% interest owned by the Company. The remaining 12.5% ownership in the well is currently being accrued at $491,000 for the authorization for expenditure to drill the wells, since the remaining ownership is being disputed by the mineral owners. The Company purchased the rights from both royalty owners which claimed ownership of the mineral rights. The Company has secured its 12.5% ownership by paying both owners $100,000 (for a total of $200,000). The payment was recorded as an asset to obtain the right to the minerals. By securing the interest with both interest owners, the Company’s interest will remain at 25%. The mineral owners are disputing the validity of an overriding royalty interest and, as a result, the operator of the well is currently holding revenues from the Company until the dispute is resolved. The Company believes the well is near payout and this should be resolved in the near future. The Company is currently accruing the remaining 12.5% authorization of expenditure and deferring the revenue in a suspense receivable account. The Company received notification that the dispute between the royalty owners has been settled. As a result, the Company is working with the operator to receive payment of its interest. As of June 30, 2014 and December 31, 2104, the Company had $404,000 and $378,000, respectively, recorded as suspense receivable. During the six months ended June 30, 2015, the Company executed five joint operating agreements to participate as a non-operator in the drilling of five horizontal wells. The Company has an average of 2.78% working interest in each of these wells which are being drilled by reputable companies.

Derivatives

Derivatives	6 Months Ended
	Jun. 30, 2015
Derivatives [Abstract]
DERIVATIVES	NOTE 5 - DERIVATIVES The Company periodically enters into various commodity derivative financial instruments intended to hedge against exposure to market fluctuations of oil prices. As of June 30, 2015 and December 31, 2014, the Company did not have any commodity derivative instruments. Through January 31, 2014, the Company maintained an active commodity swap for 100 barrels of oil per day at a price of $99.25 per barrel. The Company recorded a realized loss on oil price hedges of approximately $11,000 for the six months ended June 30, 2014. The Company did not have a hedge agreement for the three months ended June 30, 2014. Realized gains and losses are recorded as individual swaps mature and settle. These gains and losses are recorded as income or expenses in the periods during which applicable contracts settle. Swaps which are unsettled as of a balance sheet date are carried at fair value, either as an asset or liability. Unrealized gains and losses result from mark-to-market changes in the fair value of these derivatives between balance sheet dates.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	6 Months Ended
	Jun. 30, 2015
Fair Value of Financial Instruments [Abstract]
FAIR VALUE OF FINANCIAL INSTRUMENTS	NOTE 6 - FAIR VALUE OF FINANCIAL INSTRUMENTS The Company measures fair value of its financial assets on a three-tier value hierarchy, which prioritizes the inputs, used in the valuation methodologies in measuring fair value: ● Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 - Other inputs that are directly or indirectly observable in the marketplace. ● Level 3 - Unobservable inputs which are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company’s interest rate term loan and Debentures are measured using Level 3 inputs. Executive Compensation In September 2013, the Company announced the appointment of Abraham Mirman as its new president. In connection with Mr. Mirman’s appointment, the Company entered into an employment agreement with Mr. Mirman (the “Mirman Agreement”). The Mirman Agreement provides for an incentive bonus package that, depending upon the relative performance of the Company’s Common Stock compared to the performance of stocks of certain peer group companies as measured from Mr. Mirman’s initial date of employment through December 31, 2014, may result in a cash bonus payment to Mr. Mirman of up to 3.0 times his base salary. The incentive bonus is recorded as a liability and valued at each reporting period. The Company engaged a valuation firm (“VFIRM”) to complete a valuation of this incentive bonus. As of December 31, 2014, the Company recorded a liability of $40,000 for accrued compensation. As previously announced, on March 30, 2015, the Company entered into an amended and restated employment agreement (the “CEO Agreement”) with Mr. Mirman. The CEO Agreement also provides for Mr. Mirman to receive a cash incentive bonus if certain production thresholds are achieved by the Company. The Company recorded Mr. Mirman’s new incentive bonus liability, valued by VFIRM, at $270,000 at June 30, 2015. As of June 30,2015, the Company has recorded four months of liability of $90,000. On March 6, 2015, the Company announced the appointment of Kevin Nanke as its new Executive Vice President and Chief Financial Officer. Mr. Nanke will also receive a cash incentive bonus if certain production thresholds are achieved by the Company and a performance bonus of $100,000 if the Company achieves certain goals set forth in the employment agreement. The Company recorded Mr. Nanke’s new incentive bonus liability, valued by VFIRM, at $216,000 at June 30, 2015. As of June 30, 2015, the Company has recorded four months of liability of $72,000. As previously announced, in March 2015, the Company entered into an employment agreement with Ariella Fuchs for services to be performed as General Counsel to the Company. Ms. Fuchs will also receive a cash incentive bonus if certain production thresholds are achieved by the Company. The Company recorded Ms. Fuchs’ new incentive bonus liability, valued by VFIRM, at $104,000 at June 30, 2015. The three executive compensations agreements had a change in fair value for the three and six months ended June 30, 2015 of $173,000 and $231,000, respectively. The fair value of executive compensation is recorded as an accrued expense. Consulting Agreement with Bristol Capital-Warrant Anti-Dilution Feature On September 2, 2014, the Company entered into a Consulting Agreement (the “Consulting Agreement”) with Bristol Capital, LLC (“Bristol”), pursuant to which the Company issued to Bristol a warrant to purchase up to 1,000,000 shares of Common Stock at an exercise price of $2.00 per share (or, in the alternative, 1,000,000 options, but in no case both). The agreement has an anti-dilution feature that will automatically reduce the exercise price if the Company enters into another consulting agreement pursuant to which warrants are issued with a lower exercise price. On December 31, 2014, the Company revalued the warrants/option using the following variables: (i) 1,000,000 total warrants/options issued (as stated above, the Company will only issue a total of 1,000,000 shares of Common Stock under the option or the warrant, but no more than 1,000,000 shares in the aggregate); (ii) stock price of $0.72; (iii) exercise price of $2.00; (iv) expected life of 4.67 years; (v) volatility of 96.78%; (vi) risk free rate of 1.10% for a total value of $394,000, which adjusted the change in fair value valuation of the derivative by $571,000. On June 30, 2015, the Company revalued the warrants/options using the following variables: (i) 1,000,000 total warrants/options issued (as stated above, the Company will only issue a total of 1,000,000 shares of Common Stock under the option or the warrant, but no more than 1,000,000 shares in the aggregate); (ii) stock price of $0.99; (iii) exercise price of $2.00; (iv) expected life of 4.20 years; (v) volatility of 100%; risk free rate of 1.4% for a total value of $588,000, which adjusted the change in fair value valuation of the derivative by $188,000 and $194,000 for the three and six months ended June 30, 2015, respectively. The warrants/options increased in liability value from the initial valuation which resulted in additional expense. Heartland Credit Agreement - Warrant Anti-Dilution Feature On January 8, 2015, the Company entered into the Credit Agreement which provides for a three-year senior secured term loan in an initial aggregate principal amount of $3.0 million, which principal amount may be increased to a maximum principal amount of $50.0 million at the request of the Company, subject to certain conditions, and pursuant to an accordion advance provision in the Credit Agreement. Heartland is entitled to receive 75,000 warrants for every $1.0 million advance at an exercise price equal to 115% of the 10-day volume weighted average price (“VWAP”) prior to closing of each advance. The Company issued 225,000 warrants (the “Initial Warrants”) at an exercise price of $2.50 with the initial advance. The Initial Warrants have an anti-dilution feature that will automatically reduce the exercise price if the Company enters into another agreement pursuant to which warrants are issued with a lower exercise price. The Company is carrying the Initial Warrants, valued as of January 8, 2015, as a long-term derivative liability and will revalue the instrument periodically. On June 30, 2015, the Company revalued the warrants using the following variables: (i) 225,000 warrants issued; (ii) stock price of $0.99; (iii) exercise price of $ 2.50; (iv) expected life of 4.50 years; (v) volatility of 100%; (vi) risk free rate of 1.5% for a total value of $128,000, which adjusted the change in fair value valuation of the derivative by $29,000 and $72,000 for the three and six months ended June 30, 2015, respectively. On January 8, 2015: (i) 225,000 warrants issued; (ii) stock price of $0.72; (iii) exercise price of $2.50; (iv) expected life of 5.0 years; (v) volatility of 97.1%; (vi) risk free rate of 1.50% for a total value of $56,000, which was recorded as a debt discount and amortized over the life of the loan. Convertible Debentures Conversion Derivative Liability As of June 30, 2015, the Company had $6.85 million in remaining Debentures, which are convertible at any time at the holders’ option into shares of Common Stock at $2.00 per share, or 3,423,233 underlying conversion shares. The debentures have elements of a derivative due to the potential for certain adjustments, including both the conversion option and the price protection embedded in the Debentures. The conversion option allows the Debenture holders to convert their Debentures to the underlying Common Stock at the conversion price of $2.00 per share. Subject to certain adjustments, including the requirement to reset the conversion for any subsequent offering at a lower price per share amount. The Company values this conversion liability at each reporting period using a Monte Carlo pricing model. At June 30, 2015 and December 31, 2014, the Company valued the conversion feature associated with the Debentures at $1.52 million and $1.25 million, respectively. The Company used the following inputs to calculate the valuation of the derivative as of June 30, 2015: (i) volatility of 100%; (ii) conversion price of $2.00; (iii) stock price of $0.99; and (iv) present value of conversion feature of $0.02 per convertible share and as of December 31, 2014: (i) volatility of 70%; (ii) conversion price of $2.00; (iii) stock price of $0.72; and (iv) present value of conversion feature of $0.47 per convertible share. The change in fair value valuation of the derivative was $162,000 and $274,000 for the three and six months ended June 30, 2015, respectively. The following table provides a summary of the fair values of assets and liabilities measured at fair value: June 30, 2015: Level 1 Level 2 Level 3 Total Liability Executive employment agreements $ - $ - $ (231,000 ) $ (231,000 ) Warrant liabilities - - (716,000 ) (716,000 ) Convertible debenture conversion derivative liability - - (1,523,000 ) (1,523,000 ) Total liability, at fair value $ - $ - $ (2,470,000 ) $ (2,470,000 ) December 31, 2014: Level 1 Level 2 Level 3 Total Liability Executive employment agreement $ - $ - $ (40,000 ) $ (40,000 ) Warrant liabilities - - (394,000 ) (394,000 ) Convertible debenture conversion derivative liability - - (1,249,000 ) (1,249,000 ) Total liability, at fair value $ - $ - $ (1,683,000 ) $ (1,683,000 ) The following table provides a summary of changes in fair value of the Company’s Level 3 financial assets and liabilities as of June 30, 2015: Conversion derivative liability Bristol/ Incentive bonus Total Balance at January 1, 2015 $ 1,249,000 $ 394,000 $ 40,000 $ 1,683,000 Additional liability - 56,000 149,000 205,000 Change in fair value of liability 274,000 266,000 42,000 582,000 Balance at June 30, 2015 $ 1,523,000 $ 716,000 $ 231,000 $ 2,470,000 The Company did not have any transfers of assets or liabilities between Level 1, Level 2 or Level 3 of the fair value measurement hierarchy during the three and six months ended June 30, 2015 and 2014.

Loan Agreements

Loan Agreements	6 Months Ended
	Jun. 30, 2015
Loan Agreements [Abstract]
LOAN AGREEMENTS	NOTE 7 - LOAN AGREEMENTS As of Heartland Term Loan (due January 8, 2018) $ 2,750,000 Unamortized debt discount (47,000 ) Heartland Term Loan, net 2,703,000 Less: amount due within one year (500,000 ) Heartland Term Loan due after one year $ 2,203,000 8% Convertible Debentures, net (due 2018; 8% weighted average interest rate) $ 6,846,000 Heartland Bank On January 8, 2015, Lilis Energy, Inc. (the “Company”) entered into a credit agreement, as amended (the “Credit Agreement”) with Heartland, as administrative agent, and the financial institutions from time to time signatory thereto (each individually, a “Lender,” and any and all such financial institutions collectively as the “Lenders”). The Credit Agreement provides for a three-year senior secured term loan in an initial aggregate principal amount of $3,000,000, which principal amount may be increased to a maximum principal amount of $50,000,000 at the request of the Company pursuant to an accordion advance provision in the Credit Agreement subject to certain conditions, including the discretion of the lender (the “Term Loan”). Funds borrowed under the Credit Agreement may be used by the Company to (i) purchase oil and gas assets, (ii) fund certain Lender-approved development projects, (iii) fund a debt service reserve account, (iv) pay all costs and expenses arising in connection with the negotiation and execution of the Credit Agreement, and (v) fund the Company’s general working capital needs. The Term Loan bears interest at a rate calculated based upon the Company’s leverage ratio and the “prime rate” then in effect. In connection with its entry into the Credit Agreement, the Company also paid a nonrefundable commitment fee in the amount of $75,000, and agreed to issue to the Lenders 75,000 5-year warrants for every $1 million funded. An initial warrant to purchase up to 225,000 shares of the Company’s common stock at $2.50 per share was issued in connection with closing. As of January 8, 2015, the Company valued the 225,000 warrants at $56,000, which was accounted for as debt discount and amortized over the life of the debt. The Company accreted $5,000 and $9,000 of debt discount for the three and six months ended June 30, 2015, respectively. The warrants are valued every quarter due to their derivative characteristics. See Note 6—Fair Value of Financial Instruments for valuation and inputs. The Company has the right to prepay the Term Loan, in whole or in part, subject to certain conditions. If the Company exercises its right to prepay under the Credit Agreement prior to January 8, 2016, it will be assessed a prepayment premium in an amount equal to 3% of the amount of such prepayment. If the Company exercises its right to prepay under the Credit Agreement after January 8, 2016, such prepayment shall be without premium or penalty. The Credit Agreement contains certain customary representations and warranties and affirmative and negative covenants. The Credit Agreement also contains financial covenants with respect to the Company’s (i) debt to EBITDAX ratio and (ii) debt coverage ratio. In addition, in certain situations, the Credit Agreement requires mandatory prepayments of the Term Loans, including in the event of certain non-ordinary course asset sales, the incurrence of certain debt, and the Company’s receipt of proceeds in connection with insurance claims. As of June 30, 2015, the Company was not in compliance with the financial covenant relating to the total debt to EBITDAX ratio required to be maintained by the Company and measured as of that date pursuant to the Credit Agreement. Additionally, the Company did not make the required principal payment due on July 1, 2015. On August 6, 2015, Heartland applied cash from the Company’s Debt Service Reserve Account (as defined in the Credit Agreement) towards the overdue principal payment amount of $125,000 with applicable interest in the amount of $30,000 for a total aggregate payment of $155,000. The Company has reported this non-compliance to Heartland and received a waiver on the covenant violations. 8% Convertible Debentures In numerous separate private placement transactions between February 2011 and October 2013, the Company issued an aggregate of approximately $15.6 million of Debentures, secured by mortgages on several of its properties. On January 31, 2014, the Company entered into a Debenture Conversion Agreement (the “Conversion Agreement”) with all of the holders of the Debentures. Under the terms of the Conversion Agreement, the balance of the Debentures may be converted to Common Stock on the terms provided in the Conversion Agreement (including the terms related to the Warrants) at the election of the holder, subject to receipt of shareholder approval as required by NASDAQ continued listing requirements. The Company intends to present proposals to approve the conversion of the remaining outstanding Debentures at its 2015 annual meeting of shareholders, which it expects to hold sometime in the fourth quarter. As of June 30, 2015 and December 31, 2014, the Company had $6.85 million and $6.84 million, net, remaining Debentures, respectively, which are convertible at any time at the holders’ option into shares of Common Stock at a conversion price of $2.00 per share, subject to certain standard adjustments. As of June 30, 2015, the Company is in compliance with both the Credit Agreement and the 8% Convertible Debenture covenants, except as described above. Interest Expense Interest expense for the three and six months ended June 30, 2015 was $553,000 and $775,000, respectively, as compared to the three and six months ended June 30, 2014 of $2.14 million and $3.35 million, respectively. The non-cash interest expense during the three and six months ended June 30, 2015 was approximately $425,000 and $597,000, respectively, as compared to $1.28 million and $2.82 million for the three and six months ended June 30, 2014. The non-cash interest expenses consisted of non-cash interest expense and amortization of the deferred financing costs, accretion of the Debentures payable discount, and Debentures interest paid in common stock.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2015
Commitments and Contingencies [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 8 - COMMITMENTS AND CONTINGENCIES Environmental and Governmental Regulation At June 30, 2015, there were no known environmental or regulatory matters which were reasonably expected to result in a material liability to the Company. Many aspects of the oil and gas industry are extensively regulated by federal, state, and local governments in all areas in which the Company has operations. Regulations govern such things as drilling permits, environmental protection and air emissions/pollution control, spacing of wells, the unitization and pooling of properties, reports concerning operations, land use, and various other matters including taxation. Oil and gas industry legislation and administrative regulations are periodically changed for a variety of political, economic, and other reasons. As of June 30, 2015 the Company had not been fined or cited for any violations of governmental regulations that would have a material adverse effect upon the financial condition of the Company. Legal Proceedings The Company may from time to time be involved in various legal actions arising in the normal course of business. In the opinion of management, the Company’s liability, if any, in these pending actions would not have a material adverse effect on the financial position of the Company. The Company’s general and administrative expenses would include amounts incurred to resolve claims made against the Company. Parker v. Tracinda Corporation In re Roger A. Parker: Tracinda Corp. v. Recovery Energy, Inc. and Roger A. Parker Lilis Energy, Inc. v. Great Western Operating Company LLC, On July 7, 2015, as previously reported, the Company entered into a Settlement Agreement (the “Settlement Agreement”) with the Operator. The Settlement Agreement provides that upon Lilis’ payment to the Operator, net of the revenues owed to Lilis based on Lilis’ respective working interests in the subject wells of (i) the balance of its share of the costs and expenses of drilling, completion and operating costs of the subject wells, (ii) interest due on that amount and (iii) a penalty fee of $250,000. Lilis will have its full rights restored in the subject wells and return to having all rights and obligations under the JOA. This includes the right to participate in any future proposed wells at Lilis’ full interest under the JOA as if Lilis had participated and paid its proportionate share of costs of the subject wells prior to the notices of default sent to the Company by the Operator. Pursuant to the JOA, Lilis will regain an approximately 50% working interest in each of two Wattenberg horizontal wells (1 Niobrara and 1 Codell), an approximately 33% working interest in a third well (Niobrara), and an approximately 50% working interest in the remaining leasehold. The Company believes there is no other litigation pending that could have, individually or in the aggregate, a material adverse effect on its results of operations or financial condition.

Related Party Transactions

Related Party Transactions	6 Months Ended
	Jun. 30, 2015
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 9 - RELATED PARTY TRANSACTIONS G. Tyler Runnels The Company has participated in several transactions with TR Winston, of which G. Tyler Runnels, currently a member of the Company’s board of directors, is chairman and majority owner. Mr. Runnels also beneficially holds more than 5% of the Company’s Common Stock, including the holdings of TR Winston and his personal holdings, and has personally participated in certain transactions with the Company. On June 6, 2014, TR Winston executed a commitment to purchase or affect the purchase by third parties of an additional $15 million in Series A 8% Convertible Preferred Stock, to be consummated within 90 days thereof. The agreement was subsequently extended and expired on February 22, 2015. On February 25, 2015, the Company and TR Winston agreed in principal to a replacement commitment, pursuant to which TR Winston has agreed to purchase or affect the purchase by third parties of an additional $7.5 million in Series A 8% Convertible Preferred Stock, to be consummated no later than February 23, 2016, with all other terms substantially the same as those of the original commitment. This has not yet occurred. Ronald D. Ormand On March 20, 2014, the Company entered into an Engagement Agreement (the “Engagement Agreement”) with MLV & Co. LLC (“MLV”), pursuant to which MLV will act as the Company’s exclusive financial advisor. Ronald D. Ormand, currently a member of the Company’s board of directors as of February 2015, is the Managing Director and Head of the Energy Investment Banking Group at MLV. The Engagement Agreement provides for a fee of $25,000 to be paid monthly to MLV, subject to certain adjustments and other specific fee arrangements in connection with the nature of financial services being provided. The Company expensed $75,000 and $175,000 for the three and six months ended June 30, 2015, respectively, and expensed a total of $50,000 and $150,000 for the three and six months ended June 30, 2014, respectively. On May 27, 2015, MLV agreed to take $150,000 of its accrued fees in the Company’s Common Stock and was issued 75,000 shares in lieu of payment. The closing share price on May 27, 2015 was $1.56. General Merrill McPeak During the three months ended June 30, 2015, the Company received $250,000 from General McPeak as a short-term funding source (the “Short-Term Agreement”). The Short-Term Agreement carries a 12% interest and is not secured by any assets of the Company. The Short-Term Agreement generated minimal interest. The amount will be repaid within one year. General McPeak is currently a member of the Company’s board of directors. The Short-Term Agreement is recorded as a short-term loan.

Shareholders' Equity

Shareholders' Equity	6 Months Ended
	Jun. 30, 2015
Shareholders' Equity [Abstract]
SHAREHOLDERS' EQUITY	NOTE 10 - SHAREHOLDERS’ EQUITY During the three and six months ended June 30, 2015, the Company granted 350,000 shares and 634,189 shares of restricted Common Stock to employees and board members, respectively. The 634,189 shares of restricted Common Stock were reduced by forfeitures of 100,000 shares of restricted Common Stock, as a result of resignations by former employees and directors. As such, the total shares of Common Stock granted during the six months ended June 30, 2015 was 534,189, net of the forfeiture adjustment of unvested shares. During the three and six months ended June 30, 2015, the Company expensed $1.82 million and $2.64 million, respectively. During three and six months ended June 30, 2014, the Company expensed $8.4 million and $36.0 million, respectively. Series A 8% Convertible Preferred Stock On May 30, 2014, the Company consummated a private placement of 7,500 shares of Series A 8% Convertible Preferred Stock (the “Series A Preferred Stock”), together with warrants to purchase up to 1,556,017 shares of Common Stock, at an exercise price of $2.89 per share, for aggregate gross proceeds of $7.50 million. The Series A Preferred Stock bears an 8% dividend per annum, payable quarterly. The Series A Preferred Stock is convertible into 3,112,033 shares of Common Stock at a conversion price of $2.41 per share, and has a liquidation preference to any junior securities. As of June 30, 2015, the Company has accrued a cumulative dividend of $300,000 on the Series A Preferred Stock. Additionally, the Company is subject to an 18% late fee on the outstanding dividend amount owed until the balance is paid. Conditionally Redeemable 6% Preferred Stock In August 2014, the Company designated 2,000 shares of its authorized preferred stock as Conditionally Redeemable 6% Preferred Stock (“Redeemable Preferred”). All 2,000 shares of Redeemable Preferred were issued pursuant to the execution of the settlement agreement with Hexagon, LLC (“Hexagon”) in September 2014. The Redeemable Preferred has the same par value and stated value characteristics as the Series A Preferred Stock, except the Redeemable Preferred is not convertible into Common Stock or any other securities of the Company. Except as otherwise required by law, holders of the Redeemable Preferred are not entitled to voting rights. The Redeemable Preferred Stock bears a 6% dividend per annum, payable quarterly, and is redeemable at face value (plus any accrued and unpaid dividends) at any time at the Company’s option, or at the Holders option upon the Company’s achievement of certain production and reserve thresholds. These thresholds include the Company’s annualized gross production average for 90 consecutive days at 2,500 BOE per day or higher or the Company’s PV-10 value of its producing developed properties filed with the Securities and Exchange Commission exceeds $50 million. On June 30, 2015 and December 31, 2014, the Company revalued the Conditionally Redeemable 6% Preferred Stock using the Monte Carlo pricing for a total value of $1.57 million, which adjusted the change in fair value valuation of the derivative down by $120,000 for the six months ended June 30, 2015. On December 31, 2014, the Conditionally Redeemable Preferred Stock was valued at approximately $1.69 million. As of June 30, 2015, the Company has accrued a cumulative dividend of $60,000 on the Redeemable Preferred. Consulting Agreements In the ordinary course of business, the Company enters into services agreements for various services including but not limited to strategic planning; management and business operations, introductions to further its business goals, advice and services related to the Company’s growth initiatives, public relations, investment banking and any other consulting or advisory services including the one entered into with Bristol, discussed above. Often times, these agreements provide for an equity compensation component which has been paid in Common Stock, stock options and warrants or a combination thereof. During the three and six months ended June 30, 2015, the Company issued a total of 300,000 and 600,000 warrants that were paid to consultants, respectively, as discussed below. Warrants Below is a summary of warrant activity for the six months ended June 30, 2015: Warrants Weighted- Average Exercise Price Outstanding at January 1, 2015 17,007,065 3.59 Warrants issued to Heartland Bank 225,000 2.50 Warrants issued to consultants 600,000 2.25 Exercised, forfeited, or expired (2,146,734 ) 6.10 Outstanding at June 30, 2015 15,685,331 $ 3.18 The aggregate intrinsic value associated with outstanding warrants was zero at June 30, 2015 as the strike price of all warrants exceeded the market price for Common Stock, based on the Company’s closing Common Stock price of $0.99 on June 30, 2015. The weighted average remaining contract life as of June 30, 2015 was 3.49 years. During the three and six months ended June 30, 2015 and 2014, the Company issued warrants to purchase Common Stock to consultants for professional services. The warrants were valued using a Black Sholes model and the Company expensed approximately $220,000 and 425,000 for the three and six months ended June 30, 2015, respectively. During the three and six months ended June 30, 2014, the Company expensed $35,000 and $643,000, respectively, representing the fair value of warrants issued to consultants for services rendered.

Share Based and Other Compensat

Share Based and Other Compensation	6 Months Ended
	Jun. 30, 2015
Share Based and Other Compensation [Abstract]
SHARE BASED AND OTHER COMPENSATION	NOTE 11 - SHARE BASED AND OTHER COMPENSATION Share-Based Compensation In September 2012, the Company adopted the 2012 Equity Incentive Plan (the “EIP”). The EIP was amended by the stockholders on June 27, 2013 to increase the number of shares of Common Stock available for grant under the EIP from 900,000 shares to 1,800,000 shares and again on November 13, 2013 to increase the number of shares of Common Stock available for grant under the EIP from 1,800,000 shares to 6,800,000 shares and to increase the number of shares of Common Stock eligible for grant under the EIP in a single year to a single participant from 1,000,000 shares to 3,000,000 shares. Each member of the board of directors and the management team has been periodically awarded stock options and/or restricted stock grants and may be awarded additional grants under the terms of the EIP in the future. The value of employee services received in exchange for an award of equity instruments is based on the grant-date fair value of the award, recognized over the period during which an employee is required to provide services in exchange for such award. During the six months ended June 30, 2015, the Company granted 634,189 shares of restricted Common Stock and 4,800,000 stock options, to employees, directors and consultants. Also during the three months ended June 30, 2015, certain of the Company’s employees, directors and consultants forfeited 100,000 shares of restricted Common Stock and 2,233,333 stock options previously issued in connection with various terminations. As a result, as of June 30, 2015, the Company had 1,914,001 restricted shares and 6,150,000 options to purchase common shares outstanding to employees and directors. Options issued to employees vest in equal installments over specified time periods during the service period or upon achievement of certain performance based operating thresholds. The Company requires that employees and directors pay the tax on equity grants in order to issue the shares and there is currently no cashless exercise option. Therefore, as of June 30, 2015, 1,914,001 shares have been granted, but are not issued. Compensation Costs Three Months Ended June 30, 2015** Three Months Ended As of June 30, 2014 Stock Options Restricted Stock Total Stock Options Restricted Stock Total Stock-based compensation expensed* $ 1,168,000 $ 283,000 $ 1,451,000 $ 530,000 $ 120,000 $ 650,000 Six Months Ended June 30, 2015** Six Months Ended As of June 30, 2014 (Dollar amounts in thousands) Stock Options Restricted Stock Total Stock Options Restricted Stock Total Stock-based compensation expensed* $ 1,723,000 $ 341,000 $ 2,064,000 $ 754,000 $ 190,000 $ 944,000 * Only includes directors and employees for which the options vest over time instead of based upon performance criteria for which the performance criteria has not been met as of June 30, 2015. ** As of June 30, 2015, the Company has unamortized stock-based compensation costs for stock options of $2.36 million and $528,000 for restricted stock. The Company has a weighted average amortization period remaining for stock options of 7.77 years and 1.41 years for restricted stock. Restricted Stock A summary of restricted stock grant activity for the six months ended June 30, 2015 is presented below: Number of Shares Weighted Average Grant Date Price Outstanding at January 1, 2015 1,630,667 2.44 Granted 634,188 .97 Vested/issued (250,854 ) 1.12 Forfeited (100,000 ) 2.45 Outstanding at June 30, 2015 1,914,001 2.20 As of June 30, 2015, total unrecognized compensation costs related to 411,667 unvested restricted shares of Common Stock issued to directors and employees was approximately $581,079, which is expected to be recognized over a weighted-average remaining service period of 1.41 years. During the six months ended June 30, 2015 and 2014, the Company granted restricted stock for professional services. The restricted stock granted was valued at the fair value at the date of grant and vested over the contract life. During the three and six months ended June 30, 2015 the Company expensed $150,000 and $207,000, respectively, relating to the contracts. During the three and six months ended June 30, 2014, the Company expensed $190,000 and $285,000, respectively. Board of Directors On April 16, 2015, the Board adopted amended terms to the Company’s independent director compensation agreements and established an amended non-employee director compensation program pursuant to the EIP. The Company’s non-employee director compensation program is comprised of the following components: ● Initial Grant: Each non-employee director receives 100,000 shares of Common Stock, which vest in three equal installments over a three year period, payable on the date of the director’s appointment anniversary (subject to the continued service of the director and certain accelerated vesting provisions); ● Annual Stock Award: Each non-employee director will receive an annual stock award equal to $60,000 divided by the most recent per share closing price of the Common Stock on the national securities exchange on which the Common Stock is traded prior to the date of each annual grant, issued on the director’s appointment anniversary, and subject to certain accelerated vesting provisions; ● Annual Cash Retainer: Each non-employee director will receive an annual cash retainer fee of $60,000, paid quarterly, which at the election of the director is payable in cash or stock (calculated by dividing the value of cash compensation (or portion thereof) by the most recent per share closing price of the Common Stock on the national securities exchange on which the Common Stock is traded prior to the date of the grant; and ● Option Award: Each non-employee director will receive a grant of options to purchase 250,000 shares of Common Stock, which vest immediately and options to purchase 200,000 shares of Common Stock hat vest in equal installments over a three year period; and ● Committee Fees: On a quarterly basis, beginning at the end of the first full quarter following the appointment of the non-employee director to Chairman of the Board, Chairman of the Audit Committee or Chairman of the Compensation Committee, the director will receive $12,500, $6,250 and $6,250, respectively, in cash compensation. During the three and six months ended June 30, 2015, the Company expensed $977,000 and $1.20 million, respectively. The expense consisted of $977,000 and $1.15 million in non-cash compensation for the three and six months ended June 30, 2015. On April 20, 2015, the Company valued the 200,000 stock options issued to three of the non-employee directors using the following variables: (i) 200,000 options issued per director (600,000 options); (ii) stock price of $1.65; (iii) exercise price of $ 1.65; (iv) expected life of 7 years; (v) volatility of 99.44%; (vi) risk free rate of 1.65% for a total value of $271,000 for each grant (total of $813,000 for all three directors) which the amount is amortized over the vesting period. On April 20, 2015, the Company valued the 250,000 stock options issued to the three non-employee directors using the following variables: (i) 250,000 options issued for per director (750,000 options); (ii) stock price of $1.65; (iii) exercise price of $ 1.65; (iv) expected life of 5 years; (v) volatility of 99.44%; (vi) risk free rate of 1.65% for a total value of $306,000 for each grant (total of $918,000 for all three directors) which amount is expensed immediately. Stock Options A summary of stock options activity for the six months ended June 30, 2015 is presented below: Stock Options Outstanding and Exercisable Number Weighted Number Weighted Outstanding at January 1, 2015 3,583,333 $ 2.16 1,383,333 3.52 Granted 4,800,000 $ 1.26 2,666,667 9.64 Exercised - - - - Forfeited or cancelled (2,233,333 ) $ (2.45 ) (233,333 ) (1.84 ) Outstanding at June 30, 2015 6,150,000 $ 1.35 2,666,667 7.04 As of June 30, 2015, total unrecognized compensation costs relating to the outstanding options was $2.35 million, which is expected to be recognized over the remaining vesting period of approximately 2.28 years. The average life of the options is three years with an intrinsic value of $60,000 as of June 30, 2015. During the six months ended June 30, 2015 and 2014, the Company issued stock options to purchase Common Stock to certain of its officers and directors. The options are valued using a Black Scholes model and amortized over the life of the option. During the three months ended June 30, 2015 and 2014 the Company amortized $1.17 million and $537,000, respectively and during the six months ended June 30, 2015 and 2014, the Company amortized $1.72 million and $762,000, respectively, relating to options outstanding. As of June 30, 2015, 3,483,333 options were exercisable and 2,666,667 options have yet to vest in accordance with employee and board of director compensation agreements.

Summary of Significant Accoun18

Summary of Significant Accounting Policies and Estimates (Policies)	6 Months Ended
	Jun. 30, 2015
Summary of Significant Accounting Policies and Estimates [Abstract]
Basis of Presentation	Basis of Presentation The condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial statements and with Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission. Accordingly, the financial statements do not contain all information and footnotes required by U.S. GAAP for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of June 30, 2015 and the results of operations and cash flows for the periods presented. The results of operations for the three and six months ended June 30, 2015 are not necessarily indicative of the operating results for the full fiscal year for any future period. These condensed financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The Company’s accounting policies are described in the Notes to Financial Statements in its Annual Report on Form 10-K for the year ended December 31, 2014, and updated, as necessary, in this Quarterly Report on Form 10-Q.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires the Company to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates. Management evaluates estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic and commodity price environment. Although actual results may differ from these estimates under different assumptions or conditions, the Company believes that its estimates are reasonable. The most significant financial estimates are associated with the Company’s estimated volumes of proved oil and natural gas reserves, asset retirement obligations, assessments of impairment imbedded in the carrying value of undeveloped acreage and undeveloped properties, fair value of financial instruments, including derivative liabilities, depreciation and accretion, income taxes and contingencies.
Oil and Gas Producing Activities	Oil and Gas Producing Activities The Company follows the full cost method of accounting for oil and gas operations whereby all costs related to the exploration, non-production related development and acquisition of oil and natural gas reserves are capitalized. Such costs include land acquisition costs, geological and geophysical expenses, carrying charges on non-producing properties, costs of drilling, developing and completing productive wells and/or plugging and abandoning non-productive wells, and any other costs directly related to acquisition and exploration activities. Proceeds from property sales are generally applied as a credit against capitalized exploration and development costs, with no gain or loss recognized, unless such a sale would significantly alter the relationship between capitalized costs and the proved reserves attributable to these costs. A significant alteration would typically involve a sale of 25% or more of proved reserves. The Company accounts for its unproven long-lived assets in accordance with Accounting Standards Codification (“ASC”) Topic 360-10-05, Accounting for the Impairment or Disposal of Long-Lived Assets Depletion of exploration and development costs and depreciation of wells and tangible production assets is computed using the units-of-production method based upon estimated proved oil and gas reserves. Costs included in the depletion base to be amortized include (a) all proved capitalized costs including capitalized asset retirement costs net of estimated salvage values, less accumulated depletion, (b) estimated future development costs to be incurred in developing proved reserves; and (c) estimated decommissioning and abandonment/restoration costs, net of estimated salvage values, that are not otherwise included in capitalized costs. The costs of undeveloped acreage are withheld from the depletion base until it is determined whether or not proved reserves can be assigned to the properties. When proved reserves are assigned to such properties or one or more specific properties are deemed to be impaired, the cost of such properties or the amount of the impairment is added to the full cost pool which is subject to depletion calculations. Under the full cost method of accounting, capitalized oil and gas property costs less accumulated depletion and net of deferred income taxes may not exceed an amount equal to the sum of the present value, discounted at 10%, of estimated future net revenues from proved oil and gas reserves and the cost of unproved properties not subject to amortization (without regard to estimates of fair value), or estimated fair value, if lower, of unproved properties that are not subject to amortization. Should capitalized costs exceed this ceiling, an impairment expense is recognized. During the three and six months ended June 30, 2015, the Company recorded a $505,000 and a $5.967 million impairment, respectively. No impairment was recorded in 2014. The present value of estimated future net cash flows was computed by applying a flat oil price to forecast revenues from estimated future production of proved oil and gas reserves as of period-end, less estimated future expenditures to be incurred in developing and producing the proved reserves (assuming the continuation of existing economic conditions), less any applicable future taxes.
Wells in Progress	Wells in Progress Wells in progress connotes wells that are currently in the process of being drilled or completed or otherwise under evaluation as to their potential to produce oil and gas reserves in commercial quantities. Such wells continue to be classified as wells in progress and withheld from the depletion calculation and the ceiling test until such time as either proved reserves can be assigned, or the wells are otherwise abandoned. Upon either the assignment of proved reserves or abandonment, the costs for these wells are then transferred to the full cost pool and become subject to both depletion and the ceiling test calculations in accordance with full cost accounting under Rule 4-10 of Regulation S-X of the Securities Exchange Act of 1934, as amended.
Accrued Expense	Accrued Expense Accrued liabilities are probable future sacrifices of economic benefits arising from present obligations of a particular entity to transfer assets or provide service to other entities in the future as a result of past transactions or events. Below is the break-out of the accrued expense account as of June 30, 2015 and December 31, 2014. June 30, December 31, Fair-value of executive compensation $ 231,109 $ 40,000 Accrued convertible debenture interest 533,264 3,043 Board of director fees 49,272 - Accrued professional fees 249,000 78,000 Production taxes 488,000 504,000 Other payables 608,321 623,952 2,158,966 1,248,995
Asset Retirement Obligation	Asset Retirement Obligations The Company's activities are subject to various laws and regulations, including legal and contractual obligations to reclaim, remediate, or otherwise restore properties at the time the asset is permanently removed from service. Calculation of an asset retirement obligation ("ARO") requires estimates about several future events, including the life of the asset, the costs to remove the asset from service, and inflation factors. The ARO is initially estimated based upon discounted cash flows over the life of the asset and is accreted to full value over time using the Company's credit adjusted risk-free interest rate. Estimates are periodically reviewed and adjusted to reflect changes. The present value of a liability for the ARO is initially recorded when it is incurred if a reasonable estimate of fair value can be made. This is typically done when a well is completed or an asset is placed in service. When the ARO is initially recorded, the Company capitalizes the cost (the asset retirement cost or "ARC") by increasing the carrying value of the related asset. ARCs related to wells are capitalized to the full cost pool and are subject to depletion. Over time, the liability increases for the change in its present value (accretion of ARO), while the net capitalized cost decreases over the useful life of the asset as depletion expense is recognized. In addition, ARCs are included in the ceiling test calculation for valuing the full cost pool. The fair value of the Company’s asset retirement obligation liability is calculated at the point of inception by taking into account (i) the cost of abandoning oil and gas wells, which is based on the Company’s and/or industry’s historical experience for similar work, or estimates from independent third-parties; (ii) the economic lives of its properties, which are based on estimates from reserve engineers; (iii) the inflation rate; and (iv) the credit adjusted risk-free rate, which takes into account the Company’s credit risk and the time value of money. Given the unobservable nature of the inputs, the initial measurement of the asset retirement obligation liability is deemed to use Level 3 inputs. As of June 30, 2015, the Company had an ARO balance of $204,000 and has accreted $5,000 and $9,000 for the three and six months ended June 30, 2015, respectively. During the three and six months ended June 30, 2014, the Company accreted $24,000 and $44,000, respectively.
Revenue Recognition	Revenue Recognition The Company derives revenue primarily from the sale of produced natural gas and crude oil. The Company reports revenue as the gross amount received before taking into account production taxes and transportation costs, which are reported as separate expenses and are included in oil and gas production expense in the accompanying consolidated statements of operations. Revenue is recorded in the month the Company’s production is delivered to the purchaser, but payment is generally received between 30 and 90 days after the date of production. No revenue is recognized unless it is determined that title to the product has transferred to the purchaser. At the end of each month, the Company estimates the amount of production delivered to the purchaser and the price the Company will receive. The Company uses its knowledge of its properties, its historical performance, existing contracts, NYMEX and local spot market prices, quality and transportation differentials, and other factors as the basis for these estimates.
Impairment of Long-lived Assets	Impairment of Long-lived Assets The Company accounts for long-lived assets (other than oil and gas properties) at cost. Other long-lived assets consist principally of property and equipment and identifiable intangible assets with finite useful lives (subject to amortization, depletion, and depreciation). The Company may impair these assets whenever events or changes in circumstances indicate that the carrying amount of such assets may not be fully recoverable. Recoverability is measured by comparing the carrying amount of an asset to the expected undiscounted future net cash flows generated by the asset. If it is determined that the asset may not be recoverable, and if the carrying amount of an asset exceeds its estimated fair value, an impairment charge is recognized to the extent of the difference.
Net Loss per Common Share	Net Loss per Common Share Earnings (losses) per share are computed based on the weighted average number of common shares outstanding during the period presented. Diluted earnings per share are computed using the weighted-average number of common shares outstanding plus the number of common shares that would be issued assuming exercise or conversion of all potentially dilutive common shares. Potentially dilutive securities, such as shares issuable upon the conversion of debt or preferred stock, and exercise of warrants and options, are excluded from the calculation when their effect would be anti-dilutive. As of June 30, 2015 and 2014 shares underlying options, warrants, preferred stock and Debentures have been excluded from the diluted share calculations as they were anti-dilutive as a result of net losses incurred. The Company had the following Common Stock equivalents at June 30, 2015 and 2014: June 30, June 30, Stock Options 6,150,000 5,100,000 Unvested Restricted Stock (employees/directors) 1,914,001 1,779,633 Series A Preferred Stock 3,112,033 3,112,033 Warrants 15,685,331 16,506,281 Convertible Debentures 3,423,233 3,423,233 30,284,598 29,921,180
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In April 2015, the FASB issued Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements – Going Concern In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers

Summary of Significant Accoun19

Summary of Significant Accounting Policies and Estimates (Tables)	6 Months Ended
	Jun. 30, 2015
Summary of Significant Accounting Policies and Estimates [Abstract]
Schedule of accrued expense	June 30, December 31, Fair-value of executive compensation $ 231,109 $ 40,000 Accrued convertible debenture interest 533,264 3,043 Board of director fees 49,272 - Accrued professional fees 249,000 78,000 Production taxes 488,000 504,000 Other payables 608,321 623,952 2,158,966 1,248,995
Schedule of common stock equivalents	June 30, June 30, Stock Options 6,150,000 5,100,000 Unvested Restricted Stock (employees/directors) 1,914,001 1,779,633 Series A Preferred Stock 3,112,033 3,112,033 Warrants 15,685,331 16,506,281 Convertible Debentures 3,423,233 3,423,233 30,284,598 29,921,180

Fair Value of Financial Instr20

Fair Value of Financial Instruments (Tables)	6 Months Ended
	Jun. 30, 2015
Fair Value of Financial Instruments [Abstract]
Summary of fair value of assets and liabilities measured at fair value	Level 1 Level 2 Level 3 Total Liability Executive employment agreements $ - $ - $ (231,000 ) $ (231,000 ) Warrant liabilities - - (716,000 ) (716,000 ) Convertible debenture conversion derivative liability - - (1,523,000 ) (1,523,000 ) Total liability, at fair value $ - $ - $ (2,470,000 ) $ (2,470,000 ) Level 1 Level 2 Level 3 Total Liability Executive employment agreement $ - $ - $ (40.000 ) $ (40.000 ) Warrant liabilities - - (394.000 ) (394.000 ) Convertible debenture conversion derivative liability - - (1,249.000 ) (1,249.000 ) Total liability, at fair value $ - $ - $ (1,683.000 ) $ (1,683.000 )
Summary of changes in fair value of Level 3 financial assets and liabilities	Conversion derivative liability Bristol/ Incentive bonus Total Balance at January 1, 2015 $ 1,249.000 $ 394,000 $ 40,000 $ 1,683,000 Additional liability - 56,000 149,000 205,000 Change in fair value of liability 274.000 266,000 42,000 582,000 Balance at June 30, 2015 $ 1,523.000 $ 716,000 $ 231,000 $ 2,470,000

Loan Agreements (Tables)

Loan Agreements (Tables)	6 Months Ended
	Jun. 30, 2015
Loan Agreements [Abstract]
Schedule of debt	As of Heartland Term Loan (due January 8, 2018) $ 2,750,000 Unamortized debt discount (47,000 ) Heartland Term Loan, net 2,703,000 Less: amount due within one year (500,000 ) Heartland Term Loan due after one year $ 2,203,000 8% Convertible Debentures, net (due 2018; 8% weighted average interest rate) $ 6,846,000

Shareholders' Equity (Tables)

Shareholders' Equity (Tables)	6 Months Ended
	Jun. 30, 2015
Shareholders' Equity [Abstract]
Summary of warrant activity	Warrants Weighted- Average Exercise Price Outstanding at January 1, 2015 17,007,065 3.59 Warrants issued to Heartland Bank 225,000 2.50 Warrants issued to consultants 600,000 2.25 Exercised, forfeited, or expired (2,146,734 ) 6.10 Outstanding at June 30, 2015 15,685,331 $ 3.18

Share Based and Other Compens23

Share Based and Other Compensation (Tables)	6 Months Ended
	Jun. 30, 2015
Share Based and Other Compensation [Abstract]
Summary of compensation costs activity	Three Months Ended June 30, 2015** Three Months Ended As of June 30, 2014 Stock Options Restricted Stock Total Stock Options Restricted Stock Total Stock-based compensation expensed* $ 1,168,000 $ 283,000 $ 1,451,000 $ 530,000 $ 120,000 $ 650,000 Six Months Ended June 30, 2015** Six Months Ended As of June 30, 2014 (Dollar amounts in thousands) Stock Options Restricted Stock Total Stock Options Restricted Stock Total Stock-based compensation expensed* $ 1,723,000 $ 341,000 $ 2,064,000 $ 754,000 $ 190,000 $ 944,000 * Only includes directors and employees for which the options vest over time instead of based upon performance criteria for which the performance criteria has not been met as of June 30, 2015. ** As of June 30, 2015, the Company has unamortized stock-based compensation costs for stock options of $2.36 million and $528,000 for restricted stock. The Company has a weighted average amortization period remaining for stock options of 7.77 years and 1.41 years for restricted stock.
Summary of restricted stock grant activity	Number of Shares Weighted Average Grant Date Price Outstanding at January 1, 2015 1,630,667 2.44 Granted 634,188 .97 Vested (250,854 ) 1.12 Forfeited (100,000 ) 2.45 Outstanding at June 30, 2015 1,914,001 2.20
Summary of stock options activity	Stock Options Outstanding and Exercisable Number Weighted Number Weighted Outstanding at January 1, 2015 3,583,333 $ 2.16 1,383,333 3.52 Granted 4,800,000 $ 1.26 2,666,667 9.64 Exercised - - - - Forfeited or cancelled (2,233,333 ) $ (2.45 ) (233,333 ) (1.84 ) Outstanding at June 30, 2015 6,150,000 $ 1.35 2,666,667 7.04

Organization (Details)

Organization (Details)	Jun. 30, 2015a
Organization (Textual)
Area of land for crude oil and natural gas (In acres)	22,500

Liquidity (Details)

Liquidity (Details)	Jun. 09, 2015USD ($)a	Jun. 06, 2014USD ($)	Apr. 30, 2015USD ($)	Jun. 30, 2015USD ($)aBoe	Aug. 17, 2015USD ($)	Jan. 08, 2015USD ($)
Liquidity [Textual]
Amount Due				$ 500,000
8% Senior Secured Convertible Debentures [Member]
Liquidity [Textual]
Amount Due				$ 6,850,000
Number of barrels | Boe				43
Tr Winston [Member]
Liquidity [Textual]
Debt interest rate		8.00%
Purchase commitment, description		On June 6, 2014, T.R. Winston & Company, LLC ("TR Winston") executed a commitment to purchase or affect the purchase by third parties of an additional $15.0 million in Series A 8% Convertible Preferred Stock, to be consummated within 90 days thereof. The agreement was subsequently extended and expired on February 22, 2015. On February 25, 2015, the Company and TR Winston agreed in principal to a replacement commitment, pursuant to which TR Winston has agreed to purchase or affect the purchase by third parties of an additional $7.5 million in Series A 8% Convertible Preferred Stock, to be consummated no later than February 23, 2016, with all other terms substantially the same as those of the original commitment.
Purchase of additional preferred stock		$ 15,000,000
Maturity period of purchase transaction		90 days
Agreement maturity date		Feb. 22, 2015
Heartland Bank [Member]
Liquidity [Textual]
Working Capital Deficit				$ 8,500,000
Cash				208,000
Debenture outstanding				$ 2,750,000
Debt interest rate				8.00%
Credit Agreement [Member]
Liquidity [Textual]
Cash				$ 155,000
Debt instrument principal amount				125,000	$ 2,750,000	$ 3,000,000
Increase in principal amount				$ 30,000		$ 50,000,000
Asset Purchase Agreement [Member]
Liquidity [Textual]
Cost of drilling	$ 3,200,000		$ 4,800,000
Purchase commitment, description	The Company and Swan entered into an amendment to the APA (the "First Amendment") and agreed to acquire an additional 375 net acres from previously granted right of first refusal acreage, bringing the total undeveloped acreage being acquired to 1,015 net acres in the core area of the Wattenberg Field targeting the Niobrara and Codell formations. The additional acreage includes authorization for expenditures ("AFE") in place for 11 new wells with an average working interest of 4.48% and a total drilling commitment of $3.2 million.		The Company entered into an Asset Purchase Agreement (the "APA") with an unaffiliated private seller to acquire non-operated leasehold working interests including interests in 53 producing wells and a 640 gross (499 net) acre block of undeveloped leasehold in the core area of the Wattenberg Field in Weld County, Colorado.
Working interest	4.48%			8.00%
Acquired Undeveloped Acres | a	1,015			640

Summary of Significant Accoun26

Summary of Significant Accounting Policies and Estimates (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Summary of Significant Accounting Policies and Estimates [Abstract]
Fair-value of executive compensation	$ 231,109	$ 40,000
Accrued convertible debenture interest	533,264	$ 3,043
Board of director fees	49,272
Accrued professional fees	249,000	$ 78,000
Production taxes	488,000	504,000
Other payables	608,321	623,952
Accrued Liabilities, Current, Total	$ 2,158,966	$ 1,248,995

Summary of Significant Accoun27

Summary of Significant Accounting Policies and Estimates (Details 1) - shares	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total anti-dilutive shares	30,284,598	29,921,180
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total anti-dilutive shares	6,150,000	5,100,000
Unvested Restricted Stock (employees/directors) [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total anti-dilutive shares	1,914,001	1,779,633
Series A Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total anti-dilutive shares	3,112,033	3,112,033
Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total anti-dilutive shares	15,685,331	16,506,281
Convertible Debentures [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total anti-dilutive shares	3,423,233	3,423,233

Summary of Significant Accoun28

Summary of Significant Accounting Policies and Estimates (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Summary of Significant Accounting Policies and Estimate (Textual)
Percentage of discounted estimated future net revenues			10.00%
Impairment of Oil and Gas Properties	$ 504,897		$ 5,966,909
Percentage of sale of proved reserves			25% or more.
Asset retirement obligation	203,939		$ 203,939		$ 200,063
Accretion expense	$ 5,000	$ 24,000	$ 9,000	$ 44,000

Oil and Gas Properties & Oil 29

Oil and Gas Properties & Oil and Gas Properties Acquisitions and Divestitures (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	May. 27, 2015	Dec. 31, 2014
Oil and Gas Properties & Oil and Gas Properties Acquisitions and Divestitures (Textual)
Impairment Expense	$ 5,500,000		$ 5,970,000
Depreciation, depletion and amortization for proved properties	184,000	$ 512,000	416,000	$ 901,000
Wells in progress	6,040,000		6,040,000			$ 6,040,000
Accrued costs from wells in progress	$ 5,730,000		5,730,000
Costs incurred development costs			$ 516,000
Wells in progress description			The amount transferred to producing properties represents 12.5% of the total 25% interest owned by the Company. The remaining 12.5% ownership in the well is currently being accrued at $491,000 for the authorization for expenditure to drill the wells, since the remaining ownership is being disputed by the mineral owners. The Company purchased the rights from both royalty owners which claimed ownership of the mineral rights. The Company has secured its 12.5% ownership by paying both owners $100,000 (for a total of $200,000). The payment was recorded as an asset to obtain the right to the minerals. By securing the interest with both interest owners, the Company’s interest will remain at 25%.
Interest owned by company	2.75%		2.75%			12.50%
Remaining ownership interest			25.00%
Accrued liabilities					$ 150,000	$ 491,000
Suspense receivable	$ 404,000		$ 404,000			$ 378,000

Derivatives (Details Textual)

Derivatives (Details Textual)	6 Months Ended
	Jun. 30, 2015USD ($)USD_mmbtuMWh	Jun. 30, 2014USD ($)
Financial Instruments and Derivatives (Textual)
Realized gain on settlement of commodity swaps
Realized loss on oil price		$ 11,000
Through January 31, 2014 [Member]
Financial Instruments and Derivatives (Textual)
Quantity of commodity swap oil per day, barrels | MWh	100
Commodity swap strike price, per barrel | USD_mmbtu	99.25

Fair Value of Financial Instr31

Fair Value of Financial Instruments (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Liability
Executive employment agreement	$ (231,000)	$ (40)
Warrant liabilities	(716,000)	(394)
Convertible debenture conversion derivative liability	(1,523,000)	(1,249)
Total liability, at fair value	$ (2,470,000)	$ (1,683)
Level 1 [Member]
Liability
Executive employment agreement
Warrant liabilities
Convertible debenture conversion derivative liability
Total liability, at fair value
Level 2 [Member]
Liability
Executive employment agreement
Warrant liabilities
Convertible debenture conversion derivative liability
Total liability, at fair value
Level 3 [Member]
Liability
Executive employment agreement	$ (231,000)	$ (40)
Warrant liabilities	(716,000)	(394)
Convertible debenture conversion derivative liability	(1,523,000)	(1,249)
Total liability, at fair value	$ (2,470,000)	$ (1,683)

Fair Value of Financial Instr32

Fair Value of Financial Instruments (Details 1)	6 Months Ended
	Jun. 30, 2015USD ($)
Summary of changes in fair value of Level 3 financial assets and liabilities
Balance at January 1, 2015	$ 1,683,000
Additional liability	205,000
Change in fair value of liability	582,000
Balance at March 31, 2015	2,470,000
Conversion derivative liability [Member]
Summary of changes in fair value of Level 3 financial assets and liabilities
Balance at January 1, 2015	$ 1,249
Additional liability
Change in fair value of liability	$ 274
Balance at March 31, 2015	1,523
Bristol warrant liability [Member]
Summary of changes in fair value of Level 3 financial assets and liabilities
Balance at January 1, 2015	394,000
Additional liability	56,000
Change in fair value of liability	266,000
Balance at March 31, 2015	716,000
Incentive bonus [Member]
Summary of changes in fair value of Level 3 financial assets and liabilities
Balance at January 1, 2015	40,000
Additional liability	149,000
Change in fair value of liability	42,000
Balance at March 31, 2015	$ 231,000

Fair Value of Financial Instr33

Fair Value of Financial Instruments (Details Textual) - USD ($)	May. 27, 2015	Jan. 08, 2015	Sep. 02, 2014	Jun. 30, 2015	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014
Fair Value of Financial Instruments (Textual)
Exercise price of warrant			$ 2
Share price				$ 0.99	$ 0.99	$ 0.72
Exercise price		$ 2.50		$ 2	$ 2	$ 2
Expected life					4 years 2 months 12 days
Volatility rate					100.00%	70.00%
Risk free rate					1.40%
Warrants issued		225,000
Accrued compensation				$ 60,000	$ 60,000
Change in fair value				173,000	$ 231,000
Warrants to purchase common stock			1,000,000
Warrants/options issued					1,000,000	1,000,000
Total value of options/warrants		$ 56,000			$ 588,000	$ 394,000
Change in fair value valuation of the derivative				188,000	188,000	571,000	$ 194,000
Convertible debentures conversion shares	75,000
Liability				9,770,696	9,770,696	$ 8,138,875
Warrant [Member]
Fair Value of Financial Instruments (Textual)
Share price						$ 0.72
Expected life						4 years 8 months 1 day
Volatility rate						96.78%
Risk free rate						1.10%
Warrants/options issued						1,000,000
Convertible Debt [Member]
Fair Value of Financial Instruments (Textual)
Beneficial conversion feature					1,520,000	$ 1,250,000
Share price						$ 0.72
Volatility rate						70.00%
Change in fair value				$ 162,000	$ 274,000
Convertible debentures conversion shares					3,423,233
Conversion price				$ 2	$ 2	$ 2
Convertible debentures conversion shares, value					$ 6,850,000
Present value of conversion feature, Description					Present value of conversion feature of $0.47 per convertible share.
Heartland Credit Agreement [Member]
Fair Value of Financial Instruments (Textual)
Exercise price of warrant		$ 2.50
Share price				0.99	$ 0.99
Exercise price		$ 2.5		$ 2.50	$ 2.50
Expected life					4 years 6 months
Risk free rate		1.50%			1.50%
Warrants issued		75,000
Warrants to purchase common stock		225,000
Warrants/options issued		1,000,000			225,000
Total value of options/warrants					$ 128,000
Change in fair value valuation of the derivative				$ 29,000	29,000
Secured term loan		$ 3,000,000
Maximum principal amount		$ 50,000,000
Description of exercise price		115% of the 10-day volume weighted average price (“VWAP”) prior to closing of each advance.
Debt discount		$ 56,000
Abraham Mirman [Member]
Fair Value of Financial Instruments (Textual)
Description of employment agreement						cash bonus payment to Mr. Mirman of up to 3.0 times his base salary.
Accrued compensation						$ 40,000
Incentive bonuses liability				207,000	207,000
Change in fair value valuation of the derivative				270,000	270,000
Liability				90,000	90,000
Kevin Nanke [Member]
Fair Value of Financial Instruments (Textual)
Incentive bonuses liability				216,000	216,000
Performance Fees					100,000
Liability				72,000	72,000
Ariella Fuchs [Member]
Fair Value of Financial Instruments (Textual)
Liability				$ 69,000	$ 69,000

Loan Agreements (Details)

Loan Agreements (Details)	Jun. 30, 2015USD ($)
Heartland Term Loan (due January 8, 2018) [Member]
Debt Instrument [Line Items]
Total	$ 2,750,000
Unamortized debt discount	(47,000)
Total debt, net of discount	2,703,000
Less: amount due within one year	(500,000)
Heartland Term Loan due after one year	2,203,000
8% Convertible Debentures [Member]
Debt Instrument [Line Items]
Total	$ 6,846,000

Loan Agreements (Details Textua

Loan Agreements (Details Textual) - USD ($)	Jan. 08, 2015	Sep. 02, 2014	Oct. 31, 2013	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014	Aug. 17, 2015
Loan Agreements (Textual)
Interest expense				$ 553,522	$ 2,135,078	$ 775,132	$ 3,346,550
Preferred stock par value				$ 0.0001		$ 0.0001		$ 0.0001
Stock price				$ 0.99		$ 0.99		$ 0.72
Warrants exercise price, per share		$ 2
Volatility rate						100.00%		70.00%
Inducement expense							6,661,275
Warrants issued	225,000
Warrants to purchase common stock		1,000,000
Non cash interest expense				$ 425,000	$ 1,280,000	$ 597,000	$ 2,820,000
8% Convertible Debentures [Member]
Loan Agreements (Textual)
Interest rate on debentures				8.00%		8.00%
Debentures issued			$ 15,600,000
Conversion price per share				$ 2		$ 2		$ 2
Conversion of debt, Amount						$ 6,850,000		$ 6,840,000
Heartland Credit Agreement [Member]
Loan Agreements (Textual)
Maximum principal amount	$ 50,000,000
Stock price				$ 0.99		$ 0.99
Warrants exercise price, per share	$ 2.50
Secured term loan	$ 3,000,000
Warrants issued	75,000
Warrants to purchase common stock	225,000
Nonrefundable commitment fee	$ 75,000
Debt discount	56,000
Accretion of debt discount				$ 5,000		$ 9,000
Proceeds from lines of credit	$ 1,000,000
Term of warrants	5 years
Credit Agreement [Member]
Loan Agreements (Textual)
Maximum principal amount	$ 3,000,000			125,000		125,000			$ 2,750,000
Increase in principal amount	$ 50,000,000			$ 30,000		$ 30,000

Commitments and Contingencies (

Commitments and Contingencies (Details)	Apr. 10, 2015USD ($)	Jan. 09, 2015USD ($)	Jun. 30, 2015	May. 31, 2015Well
Commitments and Contingencies (Textual)
Claim for breach of contract	$ 625,572.10	$ 6,981,302.60
Settlement Agreement			(i) the balance of its share of the costs and expenses of drilling, completion and operating costs of the subject wells, (ii) interest due on that amount and (iii) a penalty fee of $250,000. Lilis will have its full rights restored in the subject wells and return to having all rights and obligations under the JOA. This includes the right to participate in any future proposed wells at Lilis' full interest under the JOA as if Lilis had participated and paid its proportionate share of costs of the subject wells prior to the notices of default sent to the Company by the Operator. Pursuant to the JOA, Lilis will regain an approximately 50% working interest in each of two Wattenberg horizontal wells (1 Niobrara and 1 Codell), an approximately 33% working interest in a third well (Niobrara), and an approximately 50% working interest in the remaining leasehold.
Number of economically producing wells | Well				3

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($)	May. 27, 2015	Jun. 06, 2014	Mar. 20, 2014	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Apr. 20, 2015	Dec. 31, 2014
Related Party Transactions (Textual)
Related party expense				$ 75,000	$ 50,000	$ 175,000	$ 150,000
Accrued fees	$ 150,000								$ 491,000
Debt conversion, converted instrument, shares issued	75,000
Share Price				$ 0.99		$ 0.99			$ 0.72
TR Winston [Member]
Related Party Transactions (Textual)
Ownership interest in common stock				5.00%		5.00%
Additional preferred stock purchase by third parties value		$ 15,000,000
Maturity period of purchase transaction		90 days
Debt interest rate		8.00%
Proceeds from preferred stock		$ 7,500,000
Ronald D. Ormand [Member]
Related Party Transactions (Textual)
Management fee			$ 25,000
Share Price	$ 1.56							$ 1.65
General McPeak
Related Party Transactions (Textual)
Cash received from related party				$ 250,000		$ 250,000
Interest rate				12.00%
Share Price								$ 1.65

Shareholders' Equity (Details)

Shareholders' Equity (Details) - 6 months ended Jun. 30, 2015 - Warrant [Member] - $ / shares	Total
Summary of warrant activity
Outstanding Beginning	17,007,065
Exercised, forfeited, or expired	(2,146,734)
Outstanding Ending	15,685,331
Weighted Average Exercise Price, Outstanding Beginning	$ 3.59
Weighted Average Exercise Price, Exercised, forfeited, or expired	6.10
Weighted Average Exercise Price, Outstanding Ending	$ 3.18
Heartland Bank [Member]
Summary of warrant activity
Outstanding Beginning	17,007,065
Warrants issued	225,000
Outstanding Ending	15,685,331
Weighted Average Exercise Price, Issued	2.50
Consultants [Member]
Summary of warrant activity
Warrants issued	600,000
Weighted Average Exercise Price, Issued	2.25

Shareholders' Equity (Details T

Shareholders' Equity (Details Textual) - USD ($)	1 Months Ended		3 Months Ended		6 Months Ended
	Aug. 31, 2014	May. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014	Sep. 02, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted Common Stock to employees and board members			$ 350,000		$ 634,189
Common Stock granted			100,000
Forfeiture adjustment share					534,189
Company expenses on during period			$ 1,820,000	$ 8,400,000	$ 2,640,000	$ 36,000,000
Series A Preferred Stock, shares issued			7,500		7,500		7,500
Warrants exercise price, per share								$ 2
Preferred Stock, Shares Authorized			10,000,000		10,000,000		10,000,000
Fair value of warrants					$ 266,212
Warrants issued, shares			300,000		600,000
Series A Preferred stock, par value			$ 0.0001		$ 0.0001		$ 0.0001
Share price			$ 0.99		$ 0.99		$ 0.72
Weighted average remaining contract life					3 years 5 months 27 days
Warrants expenses			$ 220,000	$ 35,000	$ 425,000	$ 643,000
Series A 8% Convertible Preferred Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Series A Preferred Stock, shares issued		7,500
Debentures interest rate, Percentage		8.00%
Purchase of common stock warrant		1,556,017
Warrants exercise price, per share		$ 2.89
Gross proceeds from preferred stock		$ 7,500,000
Percentage on dividends payable		8.00%			18.00%
Convertible common stock		3,112,033
Conversion price		$ 2.41
Cumulative dividend			300,000		$ 300,000
Conditionally Redeemable 6% Preferred Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage on dividends payable	6.00%
Cumulative dividend			60,000		$ 60,000
Preferred Stock, Shares Authorized	2,000
Stock issued during period, Shares	2,000
Convertible preferred stock, Description					These thresholds include, the Company's annualized gross production average for 90 consecutive days at 2,500 BOE per day or higher or the Company's PV-10 value of its producing developed properties filed with the Securities and Exchange Commission exceeds $50 million.
Fair value of warrants					$ 120,000
Outstanding redeemable preferred stock value			$ 1,690,000		$ 1,690,000		$ 1,570,000

Share Based and Other Compens40

Share Based and Other Compensation (Details) - USD ($)		3 Months Ended			6 Months Ended
		Jun. 30, 2015	[1]	Jun. 30, 2014	Jun. 30, 2015	[1]	Jun. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expensed	[2]	$ 1,451,000		$ 650,000	$ 2,064,000		$ 944,000
Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expensed	[2]	1,168,000		530,000	1,723,000		754,000
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expensed	[2]	$ 283,000		$ 120,000	$ 341,000		$ 190,000
[1]	As of June 30, 2015, the Company has unamortized stock-based compensation costs for stock options of $2.36 million and $528,000 for restricted stock. The Company has a weighted average amortization period remaining for stock options of 7.77 years and 1.41 years for restricted stock.
[2]	Only includes directors and employees for which the options vest over time instead of based upon performance criteria for which the performance criteria has not been met as of June 30, 2015.

Share Based and Other Compens41

Share Based and Other Compensation (Details 1) - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Summary of restricted stock grant activity
Granted	1,000,000	1,000,000
Restricted Stock [Member]
Summary of restricted stock grant activity
Outstanding Beginning	1,630,667
Granted	634,189
Vested/issued	(250,854)
Forfeited	(100,000)
Outstanding Ending	1,914,001	1,630,667
Weighted Average Grant Date Price
Weighted Average Exercise Price, Outstanding Beginning	$ 2.44	$ 2.3
Granted	0.97
Vested/issued	1.12
Forfeited	2.45
Weighted Average Exercise Price, Outstanding Ending	$ 2.20	$ 2.44

Share Based and Other Compens42

Share Based and Other Compensation (Details 2) - 6 months ended Jun. 30, 2015 - Stock Option [Member] - $ / shares	Total
Number of Options
Outstanding Beginning	3,583,333
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	4,800,000
Exercised
Forfeited	(2,233,333)
Outstanding Ending	6,150,000
Weighte Average Exercise Price
Weighted Average Exercise Price, Outstanding Beginning	$ 2.16
Granted	$ 1.26
Exercised
Forfeited	$ (2.45)
Weighted Average Exercise Price, Outstanding Ending	$ 1.35
Stock Options Outstanding and Exercisable Number of Options Vested/ Exercisable
Outstanding	1,383,333
Granted	2,666,667
Exercised
Forfeited or cancelled	(233,333)
Outstanding	2,666,667
Stock Options Outstanding and Exercisable Weighted Average Remaining Contractual Life (Years)
Outstanding	3 years 6 months 7 days
Granted	9 years 7 months 21 days
Forfeited or cancelled	1 year 10 months 2 days
Outstanding	7 years 15 days

Share Based and Other Compens43

Share Based and Other Compensation (Details Textual) - USD ($)	Apr. 16, 2015	Jan. 08, 2015	Sep. 02, 2014	Aug. 01, 2014	May. 31, 2014	Apr. 30, 2014	Apr. 20, 2015	Oct. 31, 2013	May. 31, 2013	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014	May. 27, 2015	Dec. 31, 2013	Nov. 13, 2013	Jun. 27, 2013
Share Based and Other Compensation (Textual)
Grant of restricted shares to employees, former chief financial officer during the period												1,000,000		1,000,000
Unrecognized non cash compensation expense										$ 581,079		$ 581,079
Unrecognized non cash compensation, shares												411,667
Recognized over a weighted-average remaining service period												3 years 5 months 27 days
Share price										$ 0.99		$ 0.99		$ 0.72
Risk free rate												1.40%
Volatility rate												100.00%		70.00%
Total fair value			$ 965,000						$ 260,000					$ 394,000
Total value of options/warrants		$ 56,000										$ 588,000		$ 394,000
Remaining shares issued												1,426,917
Amortized relating to contracts										$ 150,000	$ 190,000	$ 207,000	$ 285,000
Annual stock award										$ 60,000		60,000
Retainer fee												$ 60,000
Stock option vested award												250,000
Stock option vested award, Installments												200,000
Share-based Compensation												$ 2,638,110	$ 1,177,039
Maximum [Member]
Share Based and Other Compensation (Textual)
Increase number of common shares available for grant under the EIP for single participant										3,000,000		3,000,000
Minimum [Member]
Share Based and Other Compensation (Textual)
Increase number of common shares available for grant under the EIP for single participant										1,000,000		1,000,000
Subsequent Event [Member]
Share Based and Other Compensation (Textual)
Annual stock award	$ 60,000
Retainer fee	$ 60,000
Stock option vested award	250,000
Stock option vested award, Installments	200,000
W. Phillip Marcum
Share Based and Other Compensation (Textual)
Unvested option														200,000
Unvested option value														$ 70,000
Vested option reissued, Value														$ 420,000
Vested option reissued, Shares														200,000
Share price																$ 3.50
Strike price														$ 1.60
Volatility rate														65.00%
Total fair value														$ 420,000
Mr. Mirman [Member]
Share Based and Other Compensation (Textual)
Annual stock award														$ 40,000
Mr. Mirman [Member] | Share Price One [Member]
Share Based and Other Compensation (Textual)
Share price																7.50
Mr. Mirman [Member] | Share Price Two [Member]
Share Based and Other Compensation (Textual)
Share price																10
Mr. Mirman [Member] | Share Price Three [Member]
Share Based and Other Compensation (Textual)
Share price																$ 12.50
Independent Directors One [Member]
Share Based and Other Compensation (Textual)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross								200,000
Independent Directors Two [Member]
Share Based and Other Compensation (Textual)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross								200,000
Board of Directors Chairman [Member]
Share Based and Other Compensation (Textual)
Unrecognized non cash compensation, shares							200,000
Share price							$ 1.65
Risk free rate							1.65%
Volatility rate							99.44%
Exercise price							$ 1.65
Share-based compensation arrangement outstanding							7 years
Total value of options/warrants							$ 271,000
Committee fees												$ 12,500
Stock option plan expense										$ 977,000		1,150,000
Share-based Compensation										$ 977,000		1,200,000
Board of Directors Chairman [Member] | Subsequent Event [Member]
Share Based and Other Compensation (Textual)
Committee fees	$ 12,500
Chairman of Audit Committee [Member]
Share Based and Other Compensation (Textual)
Committee fees												6,250
Chairman of Audit Committee [Member] | Subsequent Event [Member]
Share Based and Other Compensation (Textual)
Committee fees	6,250
Director [Member]
Share Based and Other Compensation (Textual)
Unrecognized non cash compensation, shares							250,000
Share price							$ 1.65								$ 1.56
Risk free rate							1.65%
Volatility rate							99.44%
Total fair value							$ 306,000
Share-based compensation arrangement outstanding							5 years
Committee fees												$ 6,250
Director [Member] | Subsequent Event [Member]
Share Based and Other Compensation (Textual)
Committee fees	$ 6,250
Separation Agreement [Member] | A .Bradley Gabbard [Member]
Share Based and Other Compensation (Textual)
Unvested option forfeited, Shares					200,000
Unvested option forfeited, Value					$ 70,000
Unvested common stock, Shares					52,084
Unvested common stock, Value					$ 59,000
Separation Agreement [Member] | W. Phillip Marcum
Share Based and Other Compensation (Textual)
Payroll gross amount						$ 220,000
Accrued salaries						$ 150,000
Restricted common stock and stock options forfeited						93,750
Separation Agreement [Member] | Robert A. Bell [Member]
Share Based and Other Compensation (Textual)
Stock issued during period, Shares				33,333
Stock issued during period, Value				$ 100,000
Equity Incentive Plan [Member] | Maximum [Member]
Share Based and Other Compensation (Textual)
Increase number of common shares available for grant under the EIP																	6,800,000	1,800,000
Equity Incentive Plan [Member] | Minimum [Member]
Share Based and Other Compensation (Textual)
Increase number of common shares available for grant under the EIP																	1,800,000	900,000
Restricted Stock [Member]
Share Based and Other Compensation (Textual)
Grant of restricted shares to employees, former chief financial officer during the period												634,189
Forfeited												(100,000)
Purchase common shares outstanding to employees and directors										1,914,001		1,914,001		1,630,667
Unrecognized non cash compensation expense										$ 2,360,000		$ 2,360,000
Stock Options [Member]
Share Based and Other Compensation (Textual)
Forfeited												(2,233,333)
Purchase common shares outstanding to employees and directors										6,150,000		6,150,000		3,583,333
Unrecognized non cash compensation expense										$ 528,000		$ 528,000
Recognized over a weighted-average remaining service period												2 years 5 months 19 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross												4,800,000
Share-based compensation arrangement outstanding												7 years 15 days