Citadel Exploration (COIL) 10-Q 19 Aug 14 2014 Q2 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	6 Months Ended
	Jun. 30, 2014	Aug. 14, 2014
Document And Entity Information	'	'
Entity Registrant Name	'Citadel Exploration, Inc.	'
Entity Central Index Key	'0001482075	'
Document Type	'10-Q	'
Document Period End Date	30-Jun-14	'
Amendment Flag	'false	'
Current Fiscal Year End Date	'--12-31	'
Is Entity a Well-known Seasoned Issuer?	'Yes	'
Is Entity a Voluntary Filer?	'Yes	'
Is Entity's Reporting Status Current?	'No	'
Entity Filer Category	'Smaller Reporting Company	'
Entity Common Stock, Shares Outstanding	'	30,914,000
Document Fiscal Period Focus	'Q2	'
Document Fiscal Year Focus	'2014	'

Balance_Sheets_Unaudited

Balance Sheets (Unaudited) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Current assets:	'	'
Cash	$25,631	$402,649
Other receivable	22,507	40,660
Prepaid expenses	83,669	41,589
Product inventory	4,881	4,881
Total current assets	136,688	489,779
Deposits	4,900	4,000
Restricted cash	70,000	45,000
Oil and gas properties	1,914,437	1,373,363
Fixed asset, net	33,599	12,633
Total assets	2,159,624	1,924,775
Current liabilities:	'	'
Accounts payable and accrued liabilities	479,124	435,332
Accrued interest payable	'	8,316
Notes payable, net	487,450	314,134
Total current liabilities	966,574	757,782
Asset retirement obligation	48,923	31,407
Total liabilities	1,015,497	789,189
Stockholders' equity :	'	'
Common stock, $0.001 par value, 100,000,000 shares authorized, 29,714,000 and 28,949,823 shares issued and oustandingas of June 30, 2014 and December 31, 2013, respectively	29,714	28,950
Additional paid-in capital	4,206,452	3,332,982
Deficit accumulated during development stage	-3,092,039	-2,226,346
Total stockholders' equity	1,144,127	1,135,586
Total liabilities and stockholders' equity	$2,159,624	$1,924,775

Balance_Sheets_Parenthetical

Balance Sheets (Parenthetical) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]	'	'
Common stock, par value	$0.00	$0.00
Common stock Share Authorized	100,000,000	100,000,000
Common stock Share Issued	29,714,000	28,949,823
Common stock Share OutStanding	29,714,000	28,949,823

Statements_of_Operations_Unaud

Statements of Operations (Unaudited) (USD $)	3 Months Ended		6 Months Ended		92 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014
Income Statement [Abstract]	'	'	'	'	'
Revenue	$19	'	$19	'	$9,242
Operating expenses:	'	'	'	'	'
Lease operating expense	1,369	'	29,251	'	114,586
Geological & geophysical	296	'	2,396	'	8,700
General and administrative	82,860	74,758	179,332	130,041	741,368
Depreciation, amortization and accretion	4,060	2,079	7,307	4,158	19,688
Professional fees	42,613	55,296	95,052	205,655	853,880
Executive compensation	391,992	121,633	511,475	219,132	1,217,659
Gain on sale of interest in oil & gas properties	'	'	'	'	-267,856
Gain on settlement of accounts payable	'	'	'	'	-6,161
Total operating expenses	523,190	253,766	824,813	558,986	2,681,864
Other expenses:	'	'	'	'	'
Gain other	'	'	8,316	'	8,316
Gain - note payable settlemet	'	'	33,545	'	33,545
Interest expense	-88,088	-1,422	-91,255	-113,591	-460,746
Total other expenses	-88,088	-1,422	-49,394	-113,591	-418,885
Net loss before provision for income taxes	-611,259	-255,188	-874,188	-672,577	-3,091,506
Provision for income taxes	-8,494	'	-8,495	'	534
Net loss	($602,765)	($255,188)	($865,693)	($672,577)	($2,861,091)
Weighted average number of common shares outstanding - basic	27,484,783	25,813,834	27,484,783	25,813,834	'
Net loss per share - basic	($0.02)	($0.01)	($0.03)	($0.03)	'

Statements_of_Cash_Flows_Unaud

Statements of Cash Flows (Unaudited) (USD $)	6 Months Ended		92 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES	'	'	'
Net loss	($865,693)	($672,577)	($2,861,091)
Adjustments to reconcile net lossto net cash used in operating activities:	'	'	'
Depreciation, amortization and accretion	7,307	4,158	19,688
Amortization of prepaid stock compensation	'	'	80,000
Amortization of debt discount	76,821	84,517	387,901
Non cash interest expense	'	22,500	22,500
Gain on sale of interest in oil & gas properties	'	'	-267,856
Gain on settlement of accounts payable	'	'	-6,161
Gain other	-8,316	'	-8,316
Gain on settlement of note payable	-33,545	'	'
Stock based compensation expense	339,492	74,997	374,984
Shares issued for consulting	110,775	116,000	275,205
Changes in operating assets and liabilities:	'	'	'
(Increase) decrease in other receivable	18,153	-34,576	-22,507
Decrease (increase) in prepaid expenses	31,751	-61,879	55,338
Decrease (increase) in product inventory	'	'	-4,881
Increase in deposits	-900	-3,150	-4,900
Increase in accounts payable and accrued payables	51,291	58,978	522,335
Increase in accrued interest payable	'	-6,508	8,316
Net cash used in operating activities	-272,864	-417,540	-1,429,445
CASH FLOWS FROM INVESTING ACTIVITIES	'	'	'
Purchase of oil and gas properties	-523,558	-752,831	-1,947,724
Proceeds from sale of interest in oil & gas properties	'	'	350,000
Website	'	'	-1,375
Purchase of fixed assets	-28,273	'	-51,845
Restricted cash	-25,000	'	-70,000
Net cash provided by (used in) investing activities	-576,831	-752,831	-1,720,944
CASH FLOWS FROM FINANCING ACTIVITIES	'	'	'
Member contributions	'	'	105,523
Member distribution	'	'	10,000
Proceeds from sale of common stock, net of costs	-654	1,410,711	2,035,771
Proceeds from note payable	500,000	'	1,318,274
Repayments for notes payable	-26,669	-46,170	-293,548
Net cash provided by financing activities	472,677	1,364,541	3,176,020
NET CHANGE IN CASH	-377,018	194,170	25,631
CASH AT BEGINNING OF YEAR	402,649	112,580	'
CASH AT END OF PERIOD	25,631	306,750	25,631
SUPPLEMENTAL INFORMATION:	'	'	'
Interest paid	-1,568	'	-4,768
Income taxes paid	'	'	-3,200
NON-CASH INVESTING AND FINANCING ACTIVITIES:	'	'	'
Liabilities assumed with the acquisition of Citadel Exploration, LLC	'	'	29,265
Shares issued for prepaid stock compensation	'	'	80,000
Financing of insurance	70,268	52,190	150,137
Forgiveness of debt due to related party	'	'	50,953
Issuance of common stock for settlement of note payable and accrued interest	307,501	310,298	617,799
Asset retirement obligation	$17,408	'	$17,408

SUMMARY_OF_SIGNIFICANT_ACCOUNT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2014
Accounting Policies [Abstract]	'
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	'
	Basis of presentation
	The interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.
	These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2013 and notes thereto included in the Company’s 10-K annual report and all amendments. The Company follows the same accounting policies in the preparation of interim reports.
	Results of operations for the interim period are not indicative of annual results.
	Principles of consolidation
	The consolidated financial statements include the accounts of Citadel Exploration, Inc. and Citadel Exploration, LLC.  All significant intercompany balances and transactions have been eliminated. Citadel Exploration, Inc. and Citadel Exploration, LLC will be collectively referred herein to as the “Company”.
	Nature of operations
	Currently, the Company is focused on the acquisition and development of oil and gas resources in California.  The Company has not yet found oil and gas resources in commercially exploitable quantities and is engaged in exploring land in an effort to discover them.  The Company has been in the exploration stage since its formation and has not realized revenues from its planned principal operations.
	Use of estimates
	The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.
	Fair value of financial instruments
	The carrying value of the Company’s financial instruments, including cash, due to shareholders/related parties and accounts and other payables approximate their fair values due to the immediate or short-term maturity of these instruments. It is management’s opinion that the Company is not exposed to significant interest, price or credit risks arising from these financial instruments.
	Cash and cash equivalents
	The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.
	Earnings per share
	The Company follows ASC Topic 260 to account for the earnings per share. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.
	Recent pronouncements
	The Company has evaluated the recent accounting pronouncements through June 2014 and believes that none of them will have a material effect on the Company’s financial statements.

GOING_CONCERN

GOING CONCERN	6 Months Ended
	Jun. 30, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]	'
GOING CONCERN	'
	The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. As noted above, the Company is in the exploration stage and, accordingly, has not yet generated revenues from operations. Since its inception, the Company has been engaged substantially in financing activities and developing its business plan and incurring startup costs and expenses. As a result, the Company incurred accumulated net losses from Inception (November 6, 2006) through the period ended June 30, 2014 of $3,092,040. In addition, the Company’s development activities since inception have been financially sustained through debt and equity financing.
	The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty

OIL_AND_GAS_PROPERTIES

OIL AND GAS PROPERTIES	6 Months Ended
	Jun. 30, 2014
Extractive Industries [Abstract]	'
OIL AND GAS PROPERTIES	'
	The costs capitalized in oil and gas properties as of June 30, 2014 and December 31, 2013 are as follows:
		2014		2013
	Exploration	$      1,914,437		$     1,373,363
	The following table reflects the net changes in capitalized exploratory well costs that have been capitalized for a period of one year or less since completion of drilling as of June 30, 2014:
		2014                           2013
	Beginning balance at January 1,	$	1,373,363                  159,833
	Additions to capitalized exploratory well costs pending the determination of proved reserves		523,557                   752,831
	Asset retirement obligation		17,517                             0
	Ending balance at June 30,	$	1,914,437         $       912,664
	Project Indian
	On January 31, 2009, the Company entered into an oil, gas and mineral lease in San Benito County, California with an unrelated third party for the right to develop and operate the leased premises for an initial term of three years. The lease will continue as long as the Company continues actual drilling operations and continued development. The Company is obligated to pay royalties to the unrelated third party on oil and gas from all wells on the leased premises, and the royalty is a total of 20% of the market value. On February 1, 2012, the Company renegotiated this oil, gas and mineral lease for an additional minimum term of two years. The terms of the renegotiated lease are substantially the same as the original lease disclosed above. On February 1, 2013, the Company paid the final amount due to the mineral owner for this lease
	On February 22, 2012, the Company sold 40% of its interest in the property disclosed above in exchange for $350,000 to its joint venture partner. The Company recorded a gain on the sale of the partial interest totaling $267,856. Drilling commenced on this property in January 2014. Indian #1-15 was drilled and cased with Citadel paying 100% of the costs.
	On May 5, 2014 the Company received its steam injection permit from DOGGR, and expects steam injection to begin in the month of May.
	On July 11, 2014 the Company announced it had ended its joint venture with Sojitz Energy Ventures at Project Indian. As part of the agreement, Citadel now owns 100% of the working interest at Project Indian.
	On August 13, 2014 the Company announced that it had completed a successful steam cycle on the Indian #1-15. The cycle consisted of injected approximately 3,600 barrels of steam. The Company then allowed the well to soak for approximately 7 days. The well was then turned onto production. After recovering approximately 50% of the injected steam volume, the well began to produce oil. Oil production has gradually increased and produced in a range of 3-7 barrels per day. The oil produced has been tested and is 11.6 degrees API in nature, with lower viscosity than traditional heavy oil. This lower viscosity indicates that the oil is mobile at room temperature, which we believe improves the economics of this oil field.
	Per ASC 932, these wells qualify as exploratory wells and review of the capitalized costs incurred to prove up reserves must to be evaluated in the period of one year after the completion of the drilling date.
	Yowlumne
	In May 2013, the Company entered into a one year lease for approximately 3,000 acres from AERA Energy, LLC. This acreage has been mapped using a combination of both 2D and 3D seismic, and is in close proximity to the Yowlumne oil field in Kern County, California. The Company is obligated to pay royalties to AERA Energy, LLC on oil and gas from all wells on the leased premises, and the royalty is a total of 20% of the market value. In August of 2013, the Company entered into an agreement to sell 75% of the interest in the Yowlumne lease, recouping approximately 85% of its cost, while retaining a 25% interest in the lease and operatorship. Additionally, as part of this transaction, the Company retained 100% interest in the Yowlumne #2 well, which was originally drilled in 2007. After performing a workover job on this well, it has produced approximately 120 barrels of oil which were sold in December 2013. As of year-end 2013, the well had produced approximately 50 barrels of oil which were stored in a tank and valued at net realizable value on the balance sheet as product inventory. On July 11, 2014 the Company announced that it had ended its joint venture with Sojitz Energy Ventures at Yowlumne. As part of that agreement, Citadel now owns 80% of the working interest at Yowlumne and remains operator.

RESTRICTED_CASH

RESTRICTED CASH	6 Months Ended
	Jun. 30, 2014
Cash and Cash Equivalents [Abstract]	'
RESTRICTED CASH	'
	Restricted cash consist of 3 Bonds totaling $70,000. The Bonds are required in the normal course of business in the oil and gas industry. The first two bonds totaling $45,000 were purchased in November 2008, with the third bond for $25,000 being purchased in May 2014, and was required to move forward with work on the Indian Oil Development Project.

NOTES_PAYABLE

NOTES PAYABLE	6 Months Ended
	Jun. 30, 2014
Debt Disclosure [Abstract]	'
NOTES PAYABLE	'
	Notes payable consists of the following at:
		June 30,	31-Dec-13
		2014
	Three notes payable to individuals, 10% interest, due January 1, 2014	$                    -	$          300,000
	Three notes payable to an entity for the financing of insurance premiums, unsecured; 14% interest, due December 2013; 14% interest, due February 2014; 11% interest, due August 2014	57,733	14,134
	Two notes payable to individuals, 10% interest, due September 30, 2014	500,000	-
	Debt discount for 500,000 warrants issued with notes payable	-70,238	-
		$         487,450	$       314,134
	Interest expense for the quarter ended June 30, 2014 was $91,256. Of that amount, $1,444 relates to notes payable and insurance financing, $76,821 is amortization of debt discount, and $12,991 relates to interest accrued on the bridge loans. Interest expense for the quarter ended June 30, 2013 was $113,591.
	In March 2014, the Company closed on a $500,000 bridge loan from two individuals. These notes have a 180 day term and bear interest of 10%. Additionally the investors received 500,000 warrants to purchase the Company’s stock at $1.00 per share for a term of two years.

STOCKHOLDERS_EQUITY

STOCKHOLDERS' EQUITY	6 Months Ended
	Jun. 30, 2014
Equity [Abstract]	'
STOCKHOLDERS' EQUITY	'
	The Company is authorized to issue 100,000,000 shares of its $0.001 par value common stock.
	In January 2014, the Company issued 205,085 shares of common stock for services rendered and prepaid expenses with a value of $114,338. Also in January 2014, the Company issued 1,477,275 shares of common stock at a price of $0.55 per share. This included the conversion of $300,000 in previously issued bridge loans plus accrued interest and new equity capital of $500,000. These shares were approved by the Company's board during the previous year, and as such were shown as issued and outstanding as of December 31, 2013.
	On August 7, 2014 the Company issued 400,000 shares of common stock at a price for $0.34 for legal, accounting and investor relation services.

STOCK_OPTION_PLAN

STOCK OPTION PLAN	6 Months Ended
	Jun. 30, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]	'
STOCK OPTION PLAN	'
	On September 1, 2012, the Board of Directors of the Company ratified, approved, and adopted a Stock Option Plan for the Company allowing for the grant of up to 10,000,000 shares of common stock or stock options to acquire common shares. In the event an optionee ceases to be employed by or to provide services to the Company for reasons other than cause, any Stock Option that is vested and held by such optionee may be exercisable within up to thirty days after the effective date that his position ceases. No Stock Option granted under the Stock Option Plan is transferable. Any Stock Option held by an optionee at the time of his death may be exercised by his estate within six months of his death or such longer period as the Board of Directors may determine.
	As approved by the Board of Directors, on September 4, 2012, the Company granted 4,000,000 stock options to two officers of the Company at $0.20 per share for terms of seven years. Of the total stock options, 1,000,000 vested immediately and the remaining vest equally over the next 3 years at the anniversary date of the employment agreements. The total fair value of these options at the date of grant was estimated to be $599,974 and was determined using the Black-Scholes option pricing model with an expected life of 7 years, a risk free interest rate of 1.01%, a dividend yield of 0% and expected volatility of 254%. During six months ended June 30, 2014, $74,997 was recorded as a stock based compensation expense.
	On June 18, 2014, the Company’s Board of Directors approved additional stock option grants. The Company has granted 800,000 stock options at $0.55 for a term of seven years, to four of the five members of the Board of Directors. These stock options vest immediately. The total fair value of these options at the date of grant was estimated to be $264,495 and was determined using the Black-Scholes option pricing model with an expected life of 7 years, a risk free interest rate of .45%, a dividend yield of 0% and expected volatility of 236%. This total amount was expensed in June 2014.
	The following is a summary of the status of all of the Company’s stock options as of June 30, 2014 and changes during the period ended on that date:
		Number	Weighted-Average	Weighted-Average
		of Options	Exercise Price	Remaining Life (Years)
	Outstanding at January 1, 2013	4,000,000	$     0.20	5.68
	Granted on June 18, 2014	800,000	$     0.55	7
	Exercised	-	$     0.00	-
	Cancelled	-	$     0.00	-
	Outstanding at June 30, 2014	4,800,000	$     0.26	5.9
	Exercisable at June 30, 2014	1,800,000	$     0.37	5.64

SUBSEQUENT_EVENTS

SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2014
Subsequent Events [Abstract]	'
SUBSEQUENT EVENTS	'
	On July 11, 2014 the Company announced it had ended its joint venture with Sojitz Energy Ventures at Project Indian and Yowlumne. As part of the agreement, Citadel now owns 100% of the working interest at Project Indian and 80% of Yowlumne.
	In August of 2014, investors owning warrants for the company’s stock, converted early at a reduced price. The first tranche of warrants equaled 500,000 shares at $0.55, which were reduced to $0.34 resulting in the issuance of 500,000 common stock shares for $170,000 or $0.34 per share. The second tranche of warrants equaled 100,000 warrants at $1.00 per share. These warrants were exchanged for the issuance of 300,000 shares at $0.34 for $102,000 in cash.
	On August 7, 2014 investors owning warrants for the company’s stock, converted early at a reduced price. The first tranche of warrants equaled 500,000 shares at $0.55, which were reduced to $0.34 resulting in the issuance of 500,000 common stock shares for $170,000 or $0.34 per share. The second tranche of warrants equaled 100,000 warrants at $1.00 per share. These warrants were exchanged for the issuance of 300,000 shares at $0.34 for $102,000 in cash.
	On August 7, 2014 the Company issued 400,000 shares of common stock at a price for $0.34 for legal, accounting and investor relation services.
	On August 13, 2014 the Company announced that it had completed a successful steam cycle on the Indian #1-15. The cycle consisted of injected approximately 3,600 barrels of steam. The Company then allowed the well to soak for approximately 7 days. The well was then turned onto production. After recovering approximately 50% of the injected steam volume, the well began to produce oil. Oil production has gradually increased and produced in a range of 3-7 barrels per day. The oil produced has been tested and is 11.6 degrees API in nature, with lower viscosity than traditional heavy oil. This lower viscosity indicates that the oil is mobile at room temperature, which we believe improves the economics of this oil field.
	FORWARD-LOOKING STATEMENTS
	This Quarterly Report on Form 10-Q contains forward-looking statements and involves risks and uncertainties that could materially affect expected results of operations, liquidity, cash flows, and business prospects. These statements include, among other things, statements regarding:
		o	exploration risks such as drilling unsuccessful wells;
		o	our ability to operate profitably;
		o	our ability to efficiently and effectively finance our operations;
		o	inability to achieve future sales levels or other operating results;
		o	inability to raise additional financing for working capital;
		o	inability to efficiently manage our operations;
		o	inability to hire or retain sufficient qualified operating field personnel;
		o	the inability of management to effectively implement our strategies and business plans;
		o	the unavailability of funds for capital expenditures and/or general working capital;
		o	deterioration in general or regional economic conditions;
		o	the fact that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require management to make estimates about matters that are inherently uncertain;
		o	changes in U.S. GAAP or in the legal, regulatory and legislative environments in the markets in which we operate;
		o	adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;
	As well as other statements regarding our future operations, financial condition and prospects, and business strategies. These forward-looking statements are subject to certain risks and uncertainties that could cause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Quarterly Report on Form 10-Q, and in particular, the risks discussed under the heading “Risk Factors” in Part II, Item 1A and those discussed in other documents we file with the Securities and Exchange Commission. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
	References in the following discussion and throughout this quarterly report to “we”, “our”, “us”, “Citadel”, “the Company”, and similar terms refer to Citadel Exploration, Inc. and its subsidiary, unless otherwise expressly stated or the context otherwise requires.
	AVAILABLE INFORMATION
	We file annual, quarterly and other reports and other information with the SEC. You can read these SEC filings and reports over the Internet at the SEC's website at www.sec.gov or on our website at www.citadelexploration.com. You can also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, NE, Washington, DC 20549 on official business days between the hours of 10:00 am and 3:00 pm. Please call the SEC at (800) SEC-0330 for further information on the operations of the public reference facilities. We will provide a copy of our annual report to security holders, including audited financial statements, at no charge upon receipt to of a written request to us at Citadel Exploration, Inc., 417 31st Street, Unit A, Newport Beach, California 92663.

SUMMARY_OF_SIGNIFICANT_ACCOUNT1

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2014
Accounting Policies [Abstract]	'
Basis of presentation	'
	The interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.
	These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2013 and notes thereto included in the Company’s 10-K annual report and all amendments. The Company follows the same accounting policies in the preparation of interim reports.
	Results of operations for the interim period are not indicative of annual results.
Principles of consolidation	'
	The consolidated financial statements include the accounts of Citadel Exploration, Inc. and Citadel Exploration, LLC.  All significant intercompany balances and transactions have been eliminated. Citadel Exploration, Inc. and Citadel Exploration, LLC will be collectively referred herein to as the “Company”.
Nature of operations	'
	Currently, the Company is focused on the acquisition and development of oil and gas resources in California.  The Company has not yet found oil and gas resources in commercially exploitable quantities and is engaged in exploring land in an effort to discover them.  The Company has been in the exploration stage since its formation and has not realized revenues from its planned principal operations.
Use of estimates	'
	The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.
Fair value of financial instruments	'
	The carrying value of the Company’s financial instruments, including cash, due to shareholders/related parties and accounts and other payables approximate their fair values due to the immediate or short-term maturity of these instruments. It is management’s opinion that the Company is not exposed to significant interest, price or credit risks arising from these financial instruments
Cash and cash equivalents	'
	The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.
Earnings per share	'
	The Company follows ASC Topic 260 to account for the earnings per share. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.
Recent pronouncements	'
	The Company has evaluated the recent accounting pronouncements through June 2014 and believes that none of them will have a material effect on the Company’s financial statements.

OIL_AND_GAS_PROPERTIES_Tables

OIL AND GAS PROPERTIES (Tables)	6 Months Ended
	Jun. 30, 2014
Extractive Industries [Abstract]	'
Oil and Gas Properties	'
	The costs capitalized in oil and gas properties as of June 30, 2014 and December 31, 2013 are as follows:
		2014		2013
	Exploration	$      1,914,437		$     1,373,363
	The following table reflects the net changes in capitalized exploratory well costs that have been capitalized for a period of one year or less since completion of drilling as of June 30, 2014:
		2014                           2013
	Beginning balance at January 1,	$	1,373,363                  159,833
	Additions to capitalized exploratory well costs pending the determination of proved reserves		523,557                   752,831
	Asset retirement obligation		17,517                             0
	Ending balance at June 30,	$	1,914,437         $       912,664

NOTES_PAYABLE_Table

NOTES PAYABLE (Table)	6 Months Ended
	Jun. 30, 2014
Debt Disclosure [Abstract]	'
Notes payable	'
	Notes payable consists of the following at:
		June 30,	31-Dec-13
		2014
	Three notes payable to individuals, 10% interest, due January 1, 2014	$                    -	$          300,000
	Three notes payable to an entity for the financing of insurance premiums, unsecured; 14% interest, due December 2013; 14% interest, due February 2014; 11% interest, due August 2014	57,733	14,134
	Two notes payable to individuals, 10% interest, due September 30, 2014	500,000	-
	Debt discount for 500,000 warrants issued with notes payable	-70,238	-
		$         487,450	$       314,134

STOCK_OPTION_PLAN_Table

STOCK OPTION PLAN (Table)	6 Months Ended
	Jun. 30, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]	'
STOCK OPTION PLAN	'
	The following is a summary of the status of all of the Company’s stock options as of June 30, 2014 and changes during the period ended on that date:
		Number	Weighted-Average	Weighted-Average
		of Options	Exercise Price	Remaining Life (Years)
	Outstanding at January 1, 2013	4,000,000	$     0.20	5.68
	Granted on June 18, 2014	800,000	$     0.55	7
	Exercised	-	$     0.00	-
	Cancelled	-	$     0.00	-
	Outstanding at June 30, 2014	4,800,000	$     0.26	5.9
	Exercisable at June 30, 2014	1,800,000	$     0.37	5.64

WARRANTS_Table

WARRANTS (Table)	6 Months Ended
	Jun. 30, 2014
Product Warranties Disclosures [Abstract]	'
Stock warrants	'
	The following is a summary of the status of all of the Company’s stock warrants as of June 30, 2014 and changes during the period ended on that date: please update with above information.
		Number	Weighted-Average	Weighted-Average
		of Warrants	Exercise Price	Remaining Life (Years)
	Outstanding at January 1, 2014	800,000	$     0.72	0.86
	Granted	500,000	$     1.00	1.99
	Exercised	-	$     0.00	-
	Cancelled	-	$     0.00	-
	Outstanding at June 30, 2014	1,300,000	$     0.83	1.14
	Exercisable at June 30, 2014	800,000	$     0.72	0.61

NOTES_PAYABLE_Details_Narrativ

NOTES PAYABLE (Details Narrative) (USD $)	6 Months Ended		92 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014
Debt Disclosure [Abstract]	'	'	'
Interest expense	$91,256	$113,591	'
Relates to notes payable	1,444	'	'
Amortization of debt discount	76,821	84,517	387,901
Interest accrued	$12,991	'	'

STOCK_OPTION_PLAN_Details_Narr

STOCK OPTION PLAN (Details Narrative) (USD $)	6 Months Ended
	Jun. 30, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]	'
Stock based compensation expense	$74,997

WARRANTS_Details_Narrative

WARRANTS (Details Narrative) (USD $)	6 Months Ended
	Jun. 30, 2014
Product Warranties Disclosures [Abstract]	'
Amortization of debt discount included interst expenses	$2,450

NOTES_PAYABLE_Details

NOTES PAYABLE (Details) (USD $)	6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
NOTES PAYABLE	'	'
Three notes payable to individuals, 10% interest, due January 1, 2014	'	$300,000
Three notes payable to an entity for the financing of insurance premiums, unsecured; 14% interest, due December 2013; 14% interest, due February 2014; 11% interest, due August 2014	57,733	14,134
Two notes payable to individuals, 10% interest, due September 30, 2014	500,000	'
Debt discount for 500,000 warrants issued with notes payable	-70,238	'
Total	$487,450	$314,134

OIL_AND_GAS_PROPERTIES_Details

OIL AND GAS PROPERTIES (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Extractive Industries [Abstract]	'	'
Exploration	$1,914,437	$1,373,363

OIL_AND_GAS_PROPERTIES_Details1

OIL AND GAS PROPERTIES (Details1) (USD $)	Jun. 30, 2014	Jun. 30, 2013
Extractive Industries [Abstract]	'	'
Beginning balance at January 1, 2014	$1,373,363	$159,833
Additions to capitalized exploratory well costs pending the determination of proved reserves	523,557	752,831
Asset retirement obligation	17,517	0
Ending balance at June 30,2014	$1,914,437	$912,664

STOCK_OPTION_PLAN_Details

STOCK OPTION PLAN (Details) (USD $)	6 Months Ended
	Jun. 30, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]	'
Opening Outstanding at January 1, 2013	4,000,000
Number of Options Granted on June 18, 2014	800,000
Number of Options Exercised	'
Number of Options Cancelled	'
Closing Outstanding at June 30, 2014	4,800,000
Opening Outstanding at January 1, 2013	$0.20
Weighted-Average Exercise Price Granted on June 18, 2014	$0.55
Weighted-Average Exercise Price Exercised	$0
Weighted-Average Exercise Price Cancelled	$0
Weighted-Average Exercise Price Outstanding at June 30, 2014	$0.26
Weighted-Average Exercise Price Exercisable at June 30, 2014	$0.37
Weighted-Average Remaining Life Outstanding at January 1, 2013	'5 years 8 months 5 days
Weighted-Average Remaining Life Granted on June 18, 2014	'7 years
Weighted-Average Remaining Life Outstanding at June 30, 2014	'5 years 10 months 24 days
Weighted-Average Remaining Lifec Exercisable at June 30, 2014	'5 years 7 months 21 days

WARRANTS_Details

WARRANTS (Details) (USD $)	6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Number of Options Granted on June 18, 2014	800,000	'
Number of Options Exercised	'	'
Number of Options Cancelled	'	'
Closing Outstanding at June 30, 2014	4,800,000	4,000,000
Weighted-Average Exercise Price Granted on June 18, 2014	$0.55	'
Weighted-Average Exercise Price Exercised	$0	'
Weighted-Average Exercise Price Cancelled	$0	'
Weighted-Average Exercise Price Outstanding at June 30, 2014	$0.26	$0.20
Weighted-Average Exercise Price Exercisable at June 30, 2014	$0.37	'
Weighted-Average Remaining Life Outstanding at January 1, 2013	'5 years 8 months 5 days	'
Weighted-Average Remaining Life Granted on June 18, 2014	'7 years	'
Weighted-Average Remaining Life Outstanding at June 30, 2014	'5 years 10 months 24 days	'
Weighted-Average Remaining Lifec Exercisable at June 30, 2014	'5 years 7 months 21 days	'
Warrant [Member]	'	'
Opening Outstanding at January 1, 2014	800,000	'
Number of Options Granted on June 18, 2014	500,000	'
Number of Options Exercised	'	'
Number of Options Cancelled	'	'
Closing Outstanding at June 30, 2014	1,300,000	'
Number of Options Exercisable at June 30, 2014	800,000	'
Opening Outstanding at January 1, 2014	$0.72	'
Weighted-Average Exercise Price Granted on June 18, 2014	$1	'
Weighted-Average Exercise Price Exercised	$0	'
Weighted-Average Exercise Price Cancelled	$0	'
Weighted-Average Exercise Price Outstanding at June 30, 2014	$0.83	'
Weighted-Average Exercise Price Exercisable at June 30, 2014	$0.72	'
Weighted-Average Remaining Life Outstanding at January 1, 2013	'10 months 10 days	'
Weighted-Average Remaining Life Granted on June 18, 2014	'1 year 11 months 27 days	'
Weighted-Average Remaining Life Outstanding at June 30, 2014	'1 year 1 month 21 days	'
Weighted-Average Remaining Lifec Exercisable at June 30, 2014	'7 months 10 days	'