Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Oct. 30, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'Petron Energy II, Inc. | ' |
Entity Central Index Key | '0001467434 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' |
Is Entity a Voluntary Filer? | 'No | ' |
Is Entity's Reporting Status Current? | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 3,491,768,839 |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2014 | ' |
Consolidated_Balance_Sheets_Un
Consolidated Balance Sheets (Unaudited) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Current Assets | ' | ' |
Cash | $53,957 | $105 |
Accounts Receivable | 15,603 | 24,342 |
Total Current Assets | 69,560 | 24,447 |
Pipeline, net of accumulated depreciation of $371,340 and $320,452, respectively | 646,660 | 697,548 |
Producing Oil & Gas Properties, net of accumulated depletion of $917,795 and $837,759, respectively | 2,495,809 | 1,803,632 |
Other Depreciable Equipment, net of accumulated depreciation of $233,437 and $125,309, respectively | 524,601 | 609,732 |
Other Assets | 5,487 | 1,532 |
TOTAL ASSETS | 3,742,117 | 3,136,891 |
Current Liabilities | ' | ' |
Bank Overdraft | ' | 57,942 |
Accounts Payable--Trade | 592,674 | 1,282,779 |
Accounts Payable--Related Party | ' | 224,425 |
Accrued Liabilities | 190,610 | 219,649 |
Derivative Liability | 9,724,552 | 960,047 |
Notes Payable-- current | 2,439,030 | 1,432,731 |
Total Current Liabilities | 12,946,866 | 4,177,573 |
Asset Retirement Obligation | 344,790 | 220,347 |
Common Stock Issuance Liability | 543,896 | 946,551 |
TOTAL LIABILITIES | 13,835,552 | 5,344,471 |
STOCKHOLDERS' EQUITY | ' | ' |
Series A, $0.001 par value, 1,000 shares designated, issued and outstanding | 1 | 1 |
Series B, $0.001 par value, 5,910,000 shares designated, 544,440 and 947,498 shares issued and outstanding, respectively | 544 | 947 |
Common Stock, $0.00001 par value, 5,000,000,000 shares authorized; 914,622,402 and 884,172 issued and outstanding, respectively | 9,146 | 9 |
Additional Paid-in Capital | 30,634,421 | 21,913,781 |
Accumulated Deficit | -40,737,547 | -24,122,318 |
Total Stockholders' Deficit | -10,093,435 | -2,207,580 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $3,742,117 | $3,136,891 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Accumulated depreciation of Pipeline | $371,340 | $320,452 |
Accumulated depletion of Producing Oil and Gas Properties | 917,795 | 837,759 |
Other Depreciable Equipment, net of accumulated depreciation | $233,437 | $125,309 |
Series B Preferred stock, par value | $0.00 | $0.00 |
Series B Preferred stock, authorized | 5,910,000 | 5,910,000 |
Series B Preferred stock, issued | 544,440 | 947,498 |
Series B Preferred stock, outstanding | 544,440 | 947,498 |
Series A Preferred stock, par value | $0.00 | $0.00 |
Series A Preferred stock, authorized | 1,000 | 1,000 |
Series A Preferred stock, issued | 1,000 | 1,000 |
Series A Preferred stock, outstanding | 1,000 | 1,000 |
Common stock, par value | $0.00 | $0.00 |
Common stock, authorized | 5,000,000,000 | 5,000,000,000 |
Common stock, issued | 914,622,402 | 884,172 |
Common stock, outstanding | 914,622,402 | 884,172 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Revenues | ' | ' | ' | ' |
Oil & Gas Sales | $62,402 | $76,403 | $173,929 | $204,037 |
Costs and Expenses | ' | ' | ' | ' |
Cost of Revenue | 158,252 | 133,753 | 480,188 | 475,750 |
Depletion and Depreciation | 87,221 | 108,904 | 239,016 | 233,149 |
Derivative Expense | 9,148,620 | 42,052 | 13,608,647 | 283,352 |
General and Administrative | 565,254 | 138,497 | 1,996,057 | 1,120,675 |
Interest Expense | 147,082 | 122,118 | 465,250 | 266,666 |
Total Expenses | 10,106,429 | 545,324 | 16,789,158 | 2,379,592 |
Loss from Operations Before Income Taxes | -10,044,027 | -468,921 | -16,615,229 | -2,175,555 |
Income Taxes | ' | ' | ' | ' |
Net Loss | ($10,044,027) | ($468,921) | ($16,615,229) | ($2,175,555) |
Loss per share--basic and diluted | ($0.03) | ($2.16) | ($0.14) | ($18) |
Weighted average number of shares--basic and diluted | 292,130,121 | 216,950 | 119,313,372 | 120,880 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders Equity (Unaudited) (USD $) | Series A Preferred Stock | Series B Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning balance, Amount at Dec. 31, 2012 | $1 | $5,910 | $1,198 | $14,649,439 | ($19,821,223) | ($5,164,675) |
Beginning balance, Shares at Dec. 31, 2012 | 1,000 | 5,910,000 | 11,976,942 | ' | ' | ' |
Reverse Stock Split, Shares | ' | ' | -11,952,988 | ' | ' | ' |
Reverse Stock Split, Amount | ' | ' | -1,198 | 1,198 | ' | ' |
Beginning balance (restated), Shares | 1,000 | 5,910,000 | 23,954 | ' | ' | ' |
Beginning balance (restated), Amount | 1 | 5,910 | ' | 14,650,637 | -19,821,223 | -5,164,675 |
Common Stock Sales, Shares | ' | ' | 82,283 | ' | ' | ' |
Common Stock Sales, Amount | ' | ' | 1 | 525,149 | ' | 525,150 |
Common stock and warrants issued for services, Shares | ' | ' | 16,844 | ' | ' | ' |
Common stock and warrants issued for services, Amount | ' | ' | ' | 137,075 | ' | 137,075 |
Common stock issued in lawsuit settlement, Shares | ' | ' | 5,901 | ' | ' | ' |
Common stock issued in lawsuit settlement, Amount | ' | ' | ' | 138,000 | ' | 138,000 |
Common stock issued for loan fees, Shares | ' | ' | 6,667 | ' | ' | ' |
Common stock issued for loan fees, Amount | ' | ' | ' | 160,300 | ' | 160,300 |
Conversion of notes payable, Shares | ' | ' | 463,216 | ' | ' | ' |
Conversion of notes payable, Amount | ' | ' | 5 | 586,771 | ' | 586,776 |
Derivative Liability Reclassification | ' | ' | ' | 731,266 | ' | 731,266 |
Conversion of preferred stock, Shares | ' | -4,962,502 | 285,307 | ' | ' | ' |
Conversion of preferred stock, Amount | ' | -4,963 | 3 | 4,962,499 | ' | 4,957,539 |
Imputed interest on shareholder notes | ' | ' | ' | 22,084 | ' | 22,084 |
Net Income (loss) | ' | ' | ' | ' | -4,301,095 | -4,301,095 |
Ending balance, Amount at Dec. 31, 2013 | 1 | 947 | 9 | 21,913,781 | -24,122,318 | -2,207,580 |
Ending balance, Shares at Dec. 31, 2013 | 1,000 | 947,498 | 884,172 | ' | ' | ' |
Common Stock Issued for Services, Shares | ' | ' | 3,462,042 | ' | ' | ' |
Common Stock Issued for Services, Amount | ' | ' | 35 | 252,565 | ' | 252,600 |
Common Stock Sales, Shares | ' | ' | 714,850 | ' | ' | ' |
Common Stock Sales, Amount | ' | ' | 7 | 383,403 | ' | 383,410 |
Issuance Related to Equity Purchase Line, Shares | ' | ' | 600,000 | ' | ' | ' |
Issuance Related to Equity Purchase Line, Amount | ' | ' | 6 | 119,114 | ' | 119,120 |
Conversion of notes payable, Shares | ' | ' | 907,640,141 | ' | ' | ' |
Conversion of notes payable, Amount | ' | ' | 9,076 | 2,714,265 | ' | 2,723,341 |
Derivative Liability Reclassification | ' | ' | ' | 4,844,162 | ' | 4,844,162 |
Conversion of preferred stock, Shares | ' | -403,058 | 1,321,197 | ' | ' | ' |
Conversion of preferred stock, Amount | ' | -403 | 13 | 402,987 | ' | 402,597 |
Imputed interest on shareholder notes | ' | ' | ' | 4,144 | ' | 4,144 |
Net Income (loss) | ' | ' | ' | ' | -16,615,229 | -16,615,229 |
Ending balance, Amount at Sep. 30, 2014 | $1 | $544 | $9,146 | $30,634,421 | ($40,737,547) | ($10,093,435) |
Ending balance, Shares at Sep. 30, 2014 | 1,000 | 544,440 | 914,622,402 | ' | ' | ' |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes In Cash Flows (Unaudited) (USD $) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
OPERATING ACTIVITIES | ' | ' | ' |
Net Loss | ($16,615,229) | ($2,175,555) | ($4,301,095) |
Adjustments to reconcile net loss to cash used by operating activities: | ' | ' | ' |
Depletion, depreciation, and amortization | 239,016 | 233,149 | ' |
Accretion of asset retirement obligation | 12,442 | ' | ' |
Amortization of debt discount | 87,125 | 155,760 | ' |
Derivative expense | 13,608,647 | 283,352 | ' |
Imputed interest on shareholder loans | 4,144 | 22,891 | ' |
Penalty interest | ' | 45,249 | ' |
Common stock issued for services | 252,600 | 95,198 | ' |
Note payable issued for services | ' | 25,000 | ' |
Common stock issued for lawsuit settlement | ' | 138,000 | ' |
Change in other asset and liabilities: | ' | ' | ' |
Decrease/(Increase) in oil & gas receivables | 8,739 | -30,583 | ' |
(Increase)/Decrease in other assets | -3,955 | 3,259 | ' |
(Decrease)/Increase in accounts payable | -941,962 | 243,715 | ' |
Increase in accrued liabilities | 1,830 | 173,626 | ' |
Decrease in accrued liabilities | ' | -3,900 | ' |
Cash used in operating activities | -3,346,603 | -790,839 | ' |
INVESTING ACTIVITIES | ' | ' | ' |
Investment in oil & gas properties | -565,318 | -267,326 | ' |
Proceeds from the sale of equipment | 24,500 | ' | ' |
Pipeline investment | ' | -121,000 | ' |
Accounts payable dedicated for asset purchases | ' | 619,000 | ' |
Purchase of other equipment | -55,996 | -610,016 | ' |
Cash used in investing activities | -596,814 | -379,342 | ' |
FINANCING ACTIVITIES | ' | ' | ' |
Bank overdraft | -57,942 | 61,737 | ' |
Proceeds from sales of common stock | 383,410 | 505,150 | ' |
Proceeds from equity line | 119,120 | ' | ' |
Proceeds from notes payable | 4,567,024 | 674,630 | ' |
Repayments on notes payable | -1,095,530 | ' | ' |
Increase in deposit to lender | 81,187 | ' | ' |
Loan fees | ' | -79,825 | ' |
Cash from financing activities | 3,997,269 | 1,161,692 | ' |
Decrease in cash | 53,852 | -8,489 | ' |
Cash at beginning of period | 105 | 17,089 | 17,089 |
Cash at end of period | 53,957 | 8,600 | 105 |
Non-Cash Investing and Financing Activities: | ' | ' | ' |
Oil & gas properties | 231,359 | -185,622 | ' |
Notes Payable | -2,224,133 | -221,336 | ' |
Accrued liabilities | -64,403 | -4,220 | ' |
Common Stock | 1,526,838 | 107,436 | ' |
Preferred Stock | -403 | -4,521 | ' |
Additional Paid-in Capital | 5,221,928 | 4,996,628 | ' |
Derivative liability | -4,010,872 | -197,426 | ' |
Common stock issuance liability | -402,597 | -4,416,261 | ' |
Asset retirement obligation | -231,359 | 185,622 | ' |
Other assets | -46,358 | ' | ' |
Loan fees | ' | ($260,300) | ' |
Incorporation_and_Nature_of_Op
Incorporation and Nature of Operations | 9 Months Ended |
Sep. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Incorporation and Nature of Operations | ' |
1. INCORPORATION AND NATURE OF OPERATIONS | |
Petron Energy II, Inc. (“Petron” or the “Company”) was formerly known as Petron Energy Special Corp. and was incorporated in June 2007 under the laws of the State of Texas; and, on April 2011, was reincorporated in the state of Nevada. Pursuant to a Plan of Merger, the parent company, Petron Energy Special Corp. was merged into its wholly owned subsidiary, Petron Energy II, Inc. The surviving entity was Petron Energy II, Inc. The effective date of the Plan of Merger was January 3, 2012. | |
The Company is engaged primarily in the acquisition, development, production, exploration for and the sale of oil, gas and gas liquids in the United States. As of September 30, 2014 the Company is operating in the states of Texas and Oklahoma. In addition, the Company operates two gas gathering systems located in Tulsa, Wagoner, Rogers and Mayes counties of Oklahoma. The pipeline consists of approximately 132 miles of steel and poly pipe, a gas processing plant and other ancillary equipment. The Company sells its oil and gas products primarily to a domestic pipeline and two other oil companies. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | |
Sep. 30, 2014 | ||
Accounting Policies [Abstract] | ' | |
Summary of Significant Accounting Policies | ' | |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Basis of presentation | ||
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries: | ||
Subsidiary Name | Organization Date | |
Petron Energy II Pipeline, Inc. | 1-Apr-08 | |
Petron Energy II Well Service, Inc. | 1-Jul-08 | |
The interim consolidated financial statements as of September 30, 2014 and 2013 have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, these consolidated financial statements do not include all of the disclosures required by generally accepted accounting principles for complete financial statements. These interim unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2013. In the opinion of management, the interim unaudited consolidated financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim periods presented. | ||
The consolidated statements of operations reflect the results of operations of the Company for the three month and nine month periods ended September 30, 2014 and 2013. Operating results for the nine month period ended September 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. | ||
Going concern uncertainty | ||
These financial statements have been prepared in accordance with accounting principles generally accepted in the United States applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has incurred a net loss of $16,615,229 for the nine month period ended September 30, 2014 (2013 - $2,175,555) and at September 30, 2014 had an accumulated deficit of $40,737,547 (2013 – $21,996,778). While the Company has recognized revenues from operations, the revenues generated are not sufficient to sustain operations. The Company does not have sufficient funds to acquire new business assets or maintain its existing operations at this time. Management’s plan is to raise equity and/or debt financing as required but there is no certainty that such financing will be available or that it will be available at acceptable terms. The outcome of these matters cannot be predicted at this time. | ||
These financial statements do not include any adjustments to reflect the future effects on the recoverability and classification of assets or the amounts and classification of liabilities that might result from the outcome of this uncertainty. |
Capital_Structure
Capital Structure | 9 Months Ended |
Sep. 30, 2014 | |
Equity [Abstract] | ' |
Capital Structure | ' |
3. CAPITAL STRUCTURE | |
On July 3, 2014, the Company effectuated a reverse stock split of its common shares whereby every five hundred (500) pre-split shares of common stock were exchanged for one (1) post-split share of the Company’s common stock. All shares of common stock in the financial statements have been adjusted to reflect this reverse stock split. | |
On July 14, 2014 the Company amended its Articles of Incorporation to reduce the number of authorized shares of common stock from 25,000,000,000 to 2,000,000,000. |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
4. SUBSEQUENT EVENTS | |
On October 3, 2014 the Company amended its Articles of Incorporation to increase the number of authorized shares of common stock from 2,000,000,000 to 5,000,000,000. | |
The Company has applied for a reverse stock split of its common shares whereby every one thousand five hundred (1,500) pre-split shares of common stock were exchanged for one (1) post-split share of the Company’s common stock. As of the date of this report, final approval has not been received. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | |
Sep. 30, 2014 | ||
Accounting Policies [Abstract] | ' | |
Basis of Presentation | ' | |
Basis of presentation | ||
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries: | ||
Subsidiary Name | Organization Date | |
Petron Energy II Pipeline, Inc. | 1-Apr-08 | |
Petron Energy II Well Service, Inc. | 1-Jul-08 | |
The interim consolidated financial statements as of September 30, 2014 and 2013 have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, these consolidated financial statements do not include all of the disclosures required by generally accepted accounting principles for complete financial statements. These interim unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2013. In the opinion of management, the interim unaudited consolidated financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim periods presented. | ||
The consolidated statements of operations reflect the results of operations of the Company for the three month and nine month periods ended September 30, 2014 and 2013. Operating results for the nine month period ended September 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. | ||
Going concern uncertainty | ' | |
Going concern uncertainty | ||
These financial statements have been prepared in accordance with accounting principles generally accepted in the United States applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has incurred a net loss of $16,615,229 for the nine month period ended September 30, 2014 (2013 - $2,175,555) and at September 30, 2014 had an accumulated deficit of $40,737,547 (2013 – $21,996,778). While the Company has recognized revenues from operations, the revenues generated are not sufficient to sustain operations. The Company does not have sufficient funds to acquire new business assets or maintain its existing operations at this time. Management’s plan is to raise equity and/or debt financing as required but there is no certainty that such financing will be available or that it will be available at acceptable terms. The outcome of these matters cannot be predicted at this time. | ||
These financial statements do not include any adjustments to reflect the future effects on the recoverability and classification of assets or the amounts and classification of liabilities that might result from the outcome of this uncertainty. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Accounting Policies [Abstract] | ' | ' | ' | ' | ' |
Net loss | ($10,044,027) | ($468,921) | ($16,615,229) | ($2,175,555) | ($4,301,095) |
Accumulated deficit | ($40,737,547) | ($21,966,778) | ($40,737,547) | ($21,966,778) | ($24,122,318) |
Capital_Structure_Details_Narr
Capital Structure (Details Narrative) | 1 Months Ended | ||
Jul. 31, 2014 | Oct. 03, 2014 | Jul. 14, 2014 | |
Equity [Abstract] | ' | ' | ' |
Reverse stock split | '500:1 | ' | ' |
Common stock authorized, pre amendment | ' | 2,000,000,000 | 25,000,000,000 |
Common stock authorized, post amendment | ' | 5,000,000,000 | 2,000,000,000 |
Subsequent_Events_Details_Narr
Subsequent Events (Details Narrative) | Oct. 03, 2014 | Jul. 14, 2014 |
Subsequent Events [Abstract] | ' | ' |
Common stock authorized, pre amendment | 2,000,000,000 | 25,000,000,000 |
Common stock authorized, post amendment | 5,000,000,000 | 2,000,000,000 |