Citadel Exploration (COIL) 10-Q 21 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	May 21, 2018
Document And Entity Information
Entity Registrant Name	Citadel Exploration, Inc.
Entity Central Index Key	1,482,075
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
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		45,000,000
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,018

CONSOLIDATED BALANCE SHEETS (Un

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Current assets:
Cash	$ 251,271	$ 772,103
Other receivable	98,960	16,540
Prepaid expenses	5,296	29,280
Product inventory	20,107	20,107
Total current assets	375,634	838,030
Deposits	10,100	10,100
Restricted cash	200,000	200,000
Oil and gas properties, successful efforts basis
Proved, net	5,898,620	5,018,086
Unproved	1,170,000	1,170,000
Equipment, net	77,879	82,969
Total assets	7,732,233	7,319,185
Current liabilities:
Accounts payable and accrued payables	1,995,694	2,220,938
Accrued interest payable	240,377	459,416
Drilling obligation, net of discount of $105,000 and $126,000 as of March 31, 2018 and December 31, 2017 respectively	721,000	700,000
Notes payable, net	1,659,010	579,951
Total current liabilities	4,616,081	3,960,305
Asset retirement obligation	239,849	224,380
Production payment liability	300,000	300,000
Total liabilities	5,155,930	4,484,685
Stockholders' equity:
Common stock, $0.001 par value, 300,000,000 shares authorized, 45,000,000 and 44,449,742 shares issued and outstanding as of March 31, 2018 and December 31, 2017 respectively	45,000	44,450
Series A Preferred stock, $20.00 par value, 500,000 shares authorized, 395,615 and 394,365 shares issued and outstanding as of March 31, 2018 and December 31, 2017 respectively	7,912,300	7,887,300
Additional paid-in capital	5,959,407	5,691,239
Accumulated deficit	(11,340,404)	(10,788,489)
Total stockholders' equity	2,576,303	2,834,500
Total liabilities and stockholders' equity	$ 7,732,233	$ 7,319,185

CONSOLIDATED BALANCE SHEETS (U3

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, issued	45,000,000	44,449,742
Common stock, outstanding	45,000,000	44,449,742
Preferred stock, par value	$ 20	$ 20
Preferred stock, shares authorized	500,000	500,000
Preferred stock, issued	395,615	394,365
Preferred stock, outstanding	395,615	394,365

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Income Statement [Abstract]
Revenue	$ 212,554	$ 36,925
Operating expenses:
Lease operating expense	285,796	48,681
General and administrative	73,126	65,282
Depreciation, depletion and amortization	133,426	8,097
Professional fees	80,645	63,148
Executive compensation	180,000	154,590
Total operating expenses	752,993	339,798
Other expenses:
Interest expense	11,476	25,332
Total other expenses	(11,476)	(25,332)
Loss before provision for income taxes	(551,915)	(328,205)
Provision for income taxes		(112)
Net loss	(551,915)	(328,093)
Series A preferred stock dividends	(194,789)
Net loss available to common stockholders	$ (746,704)	$ (328,093)
Weighted average number of common shares - outstanding - basic and diluted	44,718,759	39,087,342
Net loss per share - basic and diluted	$ (0.02)	$ (0.01)

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
OPERATING ACTIVITIES
Net loss	$ (551,915)	$ (328,093)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, amortization and accretion	133,426	8,097
Stock based preferred stock interest expense		406,800
Stock based compensation expense	90,051
Changes in operating assets and liabilities:
Increase/(Decrease) in other receivable	(82,420)	(703)
Decrease (increase) in prepaid expenses	23,984	10,199
Increase (decrease) in accrued interest payable	10,349	(382,208)
Increase in accounts payable and accrued payables	(131,492)	115,666
Net cash used in operating activities	(508,017)	(170,242)
INVESTING ACTIVITIES
Exploration and development of oil and gas properties	(1,039,413)	(172,307)
Purchase of equipment		(2,215)
Cash received from disposal of O&G asset	100,215
Asset retirement obligation		12,264
Net cash used in investing activities	(939,198)	(162,258)
FINANCING ACTIVITIES
Proceeds from sale of preferred stock, net of costs	25,000	200,000
Proceeds from notes payable	920,612
Repayments of notes payable	(19,229)	(20,622)
Net cash provided by financing activities	926,383	179,378
Net increase in cash, cash equivalents, and restricted cash	(520,832)	(153,122)
Cash, cash equivalents, and restricted cash at beginning of year	772,103	433,793
Cash, cash equivalents, and restricted cash at end of the period	251,271	280,672
SUPPLEMENTAL INFORMATION:
Interest paid
Income taxes paid		(112)
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Shares issued to pay off bonus payable	20,000
Debt Discount from senior secured credit facility	158,667
Asset retirement obligation	12,128
O&G property purchased still in AP	26,248
Non-cash addition of senior loan facility for payment of San Benito litigation	100,000
Accrued interest payable rolled over to senior loan facility	229,388
Conversion from preferred stock issuable		6,514,600
Issuance for preferred stock for services		$ 92,700

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2018
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The interim consolidated 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 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 consolidated financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2017 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., Citadel Exploration, LLC and Citadel Kern Bluff, LLC, the Company’s wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. Citadel Exploration, Inc., Citadel Exploration, LLC and Citadel Kern Bluff, 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 properties in California. Impairment The Company evaluates the impairment of its proved oil and natural gas properties on a field-by-field basis whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The carrying values of proved properties are reduced to fair value when the expected undiscounted future cash flows are less than net book value. The fair values of proved properties are measured using valuation techniques consistent with the income approach, converting future cash flows to a single discounted amount. Significant inputs used to determine the fair values of proved properties include estimates of: (i) reserves; (ii) future operating and development costs; (iii) future commodity prices; and (iv) a market-based weighted average cost of capital rate. As of March 31,2018, management believes that no impairment indicators exist. Use of estimates The preparation of consolidated 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 consolidated 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. The Company had no cash equivalents as of March 31, 2018 and December 31, 2017. 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 ASC 606 and ASC 230 through March 31, 2018 and believes that none of them will have a material effect on the Company’s consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASI 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, “Revenue Recognition” and some cost guidance included in ASC Subtopic 05-35, “Revenue Recognition – Construction-Type and Production-Type Contracts.” The core principle of ASU 2014-09 is that revenue is recognized when the transfer of goods or services to customers occurs in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. ASU 2014-09 requires the disclosure of sufficient information to enable readdress of the Company’s financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. ASU 2014-09 also requires disclosure of information regarding significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 provides two methods to retrospective application. The first method would require the Company to apply ASU 2014-09 to each prior reporting period presented. The second method would require the Company to retrospectively apply ASU 2014-09 with the cumulative effect recognized at the date of initial application. ASU 2014-09 will be effective for the Company beginning in fiscal 2019 as a result of ASU 2015-14, “Revenue from Contracts with Customers (Topic 0): Deferral of the Effective Date,” which was issued by the FASB in August 2015 and extended to the original date by one year. Disaggregation of revenue The Company does not disaggregate revenue, as all revenue is generated from oil at one property located in California. Revenue for the three months ending March 31, 2018 and 2017 was $212,554 and $36,925. In November of 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230) Restricted Cash” (“ASU 2016-18). The update is effective for fiscal years beginning after December 15, 201, including interim reporting periods within those fiscal years. Early adoption is permitted. The purpose of Update NO. 2016-18 is to clarify guidance and presentation related to restricted cash in the statement of cash flows. The amendment requires beginning of period and end of period total amounts shown on the statement of cash flows to included cash and cash equivalents as well as restricted cash and restricted cash equivalents. The Company has evaluated the impact and timing of the adoption of ASU 2016-18 and has concluded it will not have a material impact on its consolidated financial statements.

GOING CONCERN

GOING CONCERN	3 Months Ended
	Mar. 31, 2018
Notes to Financial Statements
GOING CONCERN	NOTE 2 – GOING CONCERN The accompanying unaudited 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. 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 a net loss in the amount of $551,915 for the period ended March 31, 2018. In addition, the Company’s development activities since inception have been financially sustained through debt and equity financing. There can be no assurance that the Company will be successful to raise sufficient cash to operate over the 12 months immediately following the issuance of its financial reports. 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, BUILDIN

OIL AND GAS PROPERTIES, BUILDINGS AND EQUIPMENT	3 Months Ended
	Mar. 31, 2018
Extractive Industries [Abstract]
OIL AND GAS PROPERTIES, BUILDINGS AND EQUIPMENT	NOTE 3 – OIL AND GAS PROPERTIES Oil and natural gas properties, buildings and equipment consist of the following: March 31, 2018 (unaudited) December 31, 2017 Oil and Natural Gas: Proved properties $ 4,388,372 $ 3,468,306 Unproved properties 1,170,000 1,170,000 Facilities 2,297,724 2,244,716 7,860,596 6,883,022 Less oil property impairment (562,030) (562,030 ) Less accumulated depreciation, depletion, and amortization (225,446) (132,906 ) $ 7,068,620 $ 6,188,086 Total accumulated depreciation and depletion totaled $225,446 and $132,906, respectively, as of March 31, 2018 and December 31, 2017. For the period ending March 31, 2018 and March 31, 2017 total depreciation and depletion expense totaled $92,540 and $1,309, respectively.

RESTRICTED CASH

RESTRICTED CASH	3 Months Ended
	Mar. 31, 2018
Restricted Cash
RESTRICTED CASH	NOTE 4 – RESTRICTED CASH Restricted cash consists of one bond totaling $200,000 as of March 31, 2018. This bond was required in the normal course of business in the oil and gas industry. The bond totaling $200,000 was purchased in August 2015 following the acquisition of the Kern Bluff Oil Field. This was a blanket bond, which will cover 50 wells.

DEPOSITS

DEPOSITS	3 Months Ended
	Mar. 31, 2018
Notes to Financial Statements
DEPOSITS	NOTE 5 – DEPOSITS The Company had deposits at March 31, 2018 and December 31, 2017 totaling $10,100 for both years.

NOTES PAYABLE

NOTES PAYABLE	3 Months Ended
	Mar. 31, 2018
Notes to Financial Statements
NOTES PAYABLE	NOTE 6 – NOTES PAYABLE Notes payable consists of the following: March 31, 2018 (unaudited) December 31, 2017 Note payable to an entity for the financing of insurance premiums, unsecured; 7.75% interest, due March 2018 $ (1,327) $ 14,548 Debt Discount $ (151,713) - Senior Secured Facility Loan 10% interest; due March 31, 2019. 1,750,000 Chandler/Lloyd Trust-Notes Payable - 500,000 Note payable to an entity for the financing of a company vehicle, secured; 4.95% interest, due October 2022 30,606 32,351 Note payable to an entity for the financing of a company vehicle, secured; 4.95% interest, due November 2022 31,444 33,052 Total – Notes Payable $ 1,659,010 $ 579,951 In March of 2018, the Company closed on a $3,000,000 senior secured credit facility. The facility bears 10% interest and has a one-year term. For every two dollars drawn on the facility, the investor receives one five-year warrant to purchase common stock at a price of $0.10. The Company has drawn down $1,750,000 on the facility and issued 875,000 warrants. The warrants were valued using the relative fair value and the amount recorded as a debt discount amortized over the life of the line of credit using effective interest method. Future drawdowns are at the discretion of the lender. The senior secured facility is secured by a deed of trust on the Kern Bluff Oil Field. Proceeds from the first draw where used to retire the previous bridge loan and accrued interest. The balance was used for general corporate purposes, including the drilling of a well.

STOCKHOLDERS' EQUITY (DEFICIT)

STOCKHOLDERS' EQUITY (DEFICIT)	3 Months Ended
	Mar. 31, 2018
Notes to Financial Statements
STOCKHOLDERS' EQUITY (DEFICIT)	NOTE 7 – STOCKHOLDERS’ EQUITY (DEFICIT) The Company is authorized to issue 300,000,000 shares of its $0.001 par value common stock. The Company is authorized to issue 500,000 shares of Series A Convertible Participating Preferred Stock. In February of 2018, we sold an additional 1,250 shares of Series A Convertible Participating Preferred Stock for cash proceeds of $25,000. In February of 2018, we issued 550,262 shares of our common stock valued at $.20 to vendors for services in 2017, including accounting and oil field work.

STOCK OPTION PLAN

STOCK OPTION PLAN	3 Months Ended
	Mar. 31, 2018
Notes to Financial Statements
STOCK OPTION PLAN	NOTE 8 – STOCK OPTION PLAN The following is a summary of the status of all of the Company’s stock options as of March 31, 2018 and changes during the period ended on that date: Number of Options Weighted-Average Exercise Price Weighted-Average Remaining Life (Years) Outstanding as of December 31, 2017 9,500,000 $ 0.20 3.26 Granted — $ 0.00 — Exercised — $ 0.00 — Cancelled — $ 0.00 — Outstanding as of March 31, 2018 9,500,000 $ 0.20 3.01 Exercisable at March 31, 2018 9,500,000 $ 0.20 3.01

WARRANTS

WARRANTS	3 Months Ended
	Mar. 31, 2018
Notes to Financial Statements
WARRANTS	NOTE 9 – WARRANTS In March 2018, the Company closed on a $3,000,000 Senior Secured Credit Facility. The Company drew down $1,750,000 at close. As per the terms of the facility, the Company issued 875,000 warrants to the lender. The warrants were valued using the relative fair value and the amount recorded as a debt discount amortized over the life of the line of credit using effective interest method Number of Warrants Weighted-Average Exercise Price Weighted-Average Remaining Life (Years) Outstanding at December 31, 2017 $ 0.00 — Granted 875,000 $ 0.10 5.0 Exercised — $ 0.00 — Cancelled — $ 0.00 — Total Outstanding at March 31, 2018 875,000 $ 0.10 4.96 Exercisable at March 31, 2018 875,000 $ 0.10 4.96

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	3 Months Ended
	Mar. 31, 2018
Notes to Financial Statements
RELATED PARTY TRANSACTIONS	NOTE 10 – RELATED PARTY TRANSACTIONS During the period the Company purchased $108,092 of equipment from Grey Energy. Grey Energy is owned by one of the Company’s Board of Directors. As of the end of the period, the Company had a production payment liability of $300,000 outstanding to a related party.

DRILLING OBLIGATION

DRILLING OBLIGATION	3 Months Ended
	Mar. 31, 2018
Drilling Obligation
DRILLING OBLIGATION	NOTE 11 – DRILLING OBLIGATION The Company entered into a joint venture agreement with investors to drill two wells in the fourth quarter of 2017. The $700,000 liability has an 18% rate of return. The Company originally booked a debt discount of $126,000 and will be amortized over the next 18 months. During the period the company amortized $21,000 of the debt discount.

SUMMARY OF SIGNIFICANT ACCOUN17

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2018
Accounting Policies [Abstract]
Basis of presentation	Basis of presentation The interim consolidated 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 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 consolidated financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2017 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	Principles of consolidation The consolidated financial statements include the accounts of Citadel Exploration, Inc., Citadel Exploration, LLC and Citadel Kern Bluff, LLC, the Company’s wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. Citadel Exploration, Inc., Citadel Exploration, LLC and Citadel Kern Bluff, LLC will be collectively referred herein to as the “Company”.
Nature of operations	Nature of operations Currently, the Company is focused on the acquisition and development of oil and gas properties in California.
Impairment	Impairment The Company evaluates the impairment of its proved oil and natural gas properties on a field-by-field basis whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The carrying values of proved properties are reduced to fair value when the expected undiscounted future cash flows are less than net book value. The fair values of proved properties are measured using valuation techniques consistent with the income approach, converting future cash flows to a single discounted amount. Significant inputs used to determine the fair values of proved properties include estimates of: (i) reserves; (ii) future operating and development costs; (iii) future commodity prices; and (iv) a market-based weighted average cost of capital rate. As of March 31,2018, management believes that no impairment indicators exist.
Use of estimate	Use of estimates The preparation of consolidated 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 consolidated 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	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	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. The Company had no cash equivalents as of March 31, 2018 and December 31, 2017.
Earnings per share	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	Recent pronouncements The Company has evaluated the recent accounting pronouncements ASC 606 and ASC 230 through March 31, 2018 and believes that none of them will have a material effect on the Company’s consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASI 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, “Revenue Recognition” and some cost guidance included in ASC Subtopic 05-35, “Revenue Recognition – Construction-Type and Production-Type Contracts.” The core principle of ASU 2014-09 is that revenue is recognized when the transfer of goods or services to customers occurs in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. ASU 2014-09 requires the disclosure of sufficient information to enable readdress of the Company’s financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. ASU 2014-09 also requires disclosure of information regarding significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 provides two methods to retrospective application. The first method would require the Company to apply ASU 2014-09 to each prior reporting period presented. The second method would require the Company to retrospectively apply ASU 2014-09 with the cumulative effect recognized at the date of initial application. ASU 2014-09 will be effective for the Company beginning in fiscal 2019 as a result of ASU 2015-14, “Revenue from Contracts with Customers (Topic 0): Deferral of the Effective Date,” which was issued by the FASB in August 2015 and extended to the original date by one year. Disaggregation of revenue The Company does not disaggregate revenue, as all revenue is generated from oil at one property located in California. Revenue for the three months ending March 31, 2018 and 2017 was $212,554 and $36,925. In November of 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230) Restricted Cash” (“ASU 2016-18). The update is effective for fiscal years beginning after December 15, 201, including interim reporting periods within those fiscal years. Early adoption is permitted. The purpose of Update NO. 2016-18 is to clarify guidance and presentation related to restricted cash in the statement of cash flows. The amendment requires beginning of period and end of period total amounts shown on the statement of cash flows to included cash and cash equivalents as well as restricted cash and restricted cash equivalents. The Company has evaluated the impact and timing of the adoption of ASU 2016-18 and has concluded it will not have a material impact on its consolidated financial statements.

OIL AND GAS PROPERTIES, BUILD18

OIL AND GAS PROPERTIES, BUILDINGS AND EQUIPMENT (Tables)	3 Months Ended
	Mar. 31, 2018
Extractive Industries [Abstract]
Schedule of Oil and natural gas properties, buildings and equipment	Oil and natural gas properties, buildings and equipment consist of the following: March 31, 2018 (unaudited) December 31, 2017 Oil and Natural Gas: Proved properties $ 4,388,372 $ 3,468,306 Unproved properties 1,170,000 1,170,000 Facilities 2,297,724 2,244,716 7,860,596 6,883,022 Less oil property impairment (562,030) (562,030 ) Less accumulated depreciation, depletion, and amortization (225,446) (132,906 ) $ 7,068,620 $ 6,188,086

NOTES PAYABLE (Tables)

NOTES PAYABLE (Tables)	3 Months Ended
	Mar. 31, 2018
Notes to Financial Statements
Schedule of Notes Payable	Notes payable consists of the following: March 31, 2018 (unaudited) December 31, 2017 Note payable to an entity for the financing of insurance premiums, unsecured; 7.75% interest, due March 2018 $ (1,327) $ 14,548 Debt Discount $ (151,713) - Senior Secured Facility Loan 10% interest; due March 31, 2019. 1,750,000 Chandler/Lloyd Trust-Notes Payable - 500,000 Note payable to an entity for the financing of a company vehicle, secured; 4.95% interest, due October 2022 30,606 32,351 Note payable to an entity for the financing of a company vehicle, secured; 4.95% interest, due November 2022 31,444 33,052 Total – Notes Payable $ 1,659,010 $ 579,951

STOCK OPTION PLAN (Tables)

STOCK OPTION PLAN (Tables)	3 Months Ended
	Mar. 31, 2018
Notes to Financial Statements
Schedule of Company's stock options	The following is a summary of the status of all of the Company’s stock options as of March 31, 2018 and changes during the period ended on that date: Number of Options Weighted-Average Exercise Price Weighted-Average Remaining Life (Years) Outstanding as of December 31, 2017 9,500,000 $ 0.20 3.26 Granted — $ 0.00 — Exercised — $ 0.00 — Cancelled — $ 0.00 — Outstanding as of March 31, 2018 9,500,000 $ 0.20 3.01 Exercisable at March 31, 2018 9,500,000 $ 0.20 3.01

WARRANTS (Tables)

WARRANTS (Tables)	3 Months Ended
	Mar. 31, 2018
Notes to Financial Statements
Schedule of Warrants	Number of Warrants Weighted-Average Exercise Price Weighted-Average Remaining Life (Years) Outstanding at December 31, 2017 $ 0.00 — Granted 875,000 $ 0.10 5.0 Exercised — $ 0.00 — Cancelled — $ 0.00 — Total Outstanding at March 31, 2018 875,000 $ 0.10 4.96 Exercisable at March 31, 2018 875,000 $ 0.10 4.96

OIL AND GAS PROPERTIES, BUILD22

OIL AND GAS PROPERTIES, BUILDINGS AND EQUIPMENT (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Oil and Natural Gas:
Proved properties	$ 4,388,372	$ 3,468,306
Unproved properties	1,170,000	1,170,000
Facilities	2,297,724	2,244,716
Oil and Natural Gas Total	7,860,596	6,883,022
Less oil property impairment	(562,030)	(562,030)
Less accumulated depreciation, depletion, and amortization	(225,446)	(132,906)
Oil and Natural Gas, Net	$ 7,068,620	$ 6,188,086

NOTES PAYABLE (Details Narrativ

NOTES PAYABLE (Details Narrative) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Notes Payable Details Narrative
Note payable to an entity for the financing of insurance premiums, unsecured; 7.75% interest, due March 2018	$ (1,327)	$ 14,548
Debt Discount	(151,713)
Senior Secured Facility Loan 10% interest; due March 31, 2019.	1,750,000
Chandler/Lloyd Trust-Notes Payable		500,000
Note payable to an entity for the financing of a company vehicle, secured; 4.95% interest, due October 2022	30,606	32,351
Note payable to an entity for the financing of a company vehicle, secured; 4.95% interest, due November 2022	31,444	33,052
Notes payable	$ 1,659,010	$ 579,951

STOCK OPTION PLAN (Details)

STOCK OPTION PLAN (Details) - $ / shares	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Number of Options
Outstanding, Beginning	9,500,000
Granted
Exercised
Cancelled
Outstanding, Ending	9,500,000
Exercisable at March 31, 2018		9,500,000
Weighted-Average Exercise Price
Outstanding, Beginning	$ 0.20
Granted	0
Exercised	0
Cancelled	0
Outstanding, Ending	$ 0.20
Exercisable at March 31		$ 0.20
Weighted-Average Remaining Life (Years)
Outstanding, Beginning	3 years 3 months 4 days
Outstanding, Ending	3 years 4 days
Exercisable March 31	3 years 4 days

WARRANTS (Details)

WARRANTS (Details) - $ / shares	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Number of Options
Outstanding, Beginning	9,500,000
Granted
Exercised
Cancelled
Outstanding, Ending	9,500,000
Exercisable at March 31		9,500,000
Weighted-Average Exercise Price
Outstanding, Beginning	$ 0.20
Granted	0
Exercised	0
Cancelled	0
Outstanding, Ending	$ 0.20
Exercisable at March 31		$ 0.20
Weighted-Average Remaining Life (Years)
Outstanding, Beginning	3 years 3 months 4 days
Outstanding at March 31	3 years 4 days
Exercisable at March 31	3 years 4 days
Warrant [Member]
Number of Options
Outstanding, Beginning
Granted	875,000
Exercised
Cancelled
Outstanding, Ending	875,000
Exercisable at March 31	875,000
Weighted-Average Exercise Price
Outstanding, Beginning	$ 0
Granted	0.10
Exercised	0
Cancelled	0
Outstanding, Ending	0.10
Exercisable at March 31	$ 0.10	$ 0
Weighted-Average Remaining Life (Years)
Outstanding, Beginning
Grants	5 years
Outstanding at March 31	4 years 11 months 16 days
Exercisable at March 31	4 years 11 months 16 days