Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 23, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Brenham Oil & Gas Corp. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 128,031,064 | |
Amendment Flag | false | |
Entity Central Index Key | 1,501,720 | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Well-known Seasoned Issuer | No | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 6,600 | $ 6,051 |
Total assets | 6,600 | 6,051 |
Current liabilities: | ||
Accounts payable and accrued expenses | 23,768 | 23,518 |
Accounts payable – related parties | 684,900 | 651,750 |
Total current liabilities | 708,668 | 675,268 |
Long-term liabilities: | ||
Asset retirement obligations | 7,400 | 7,400 |
Total liabilities | $ 716,068 | $ 682,668 |
Commitments and contingencies | ||
Stockholders’ deficit: | ||
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, 0 shares issued and outstanding | $ 0 | $ 0 |
Common stock, $0.0001 par value, 200,000,000 shares authorized; 128,293,536 shares issued and outstanding | 12,830 | 12,830 |
Less: treasury stock, at cost; 262,472 shares | (4,728) | (4,728) |
Additional paid-in capital | 992,981 | 992,981 |
Accumulated deficit | (1,710,551) | (1,677,700) |
Total stockholders’ deficit | (709,468) | (676,617) |
Total liabilities and stockholders’ deficit | $ 6,600 | $ 6,051 |
CONSOLIDATED BALANCE SHEETS (U3
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parentheticals) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
Preferred stock par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 128,293,536 | 128,293,536 |
Common stock, shares outstanding | 128,293,536 | 128,293,536 |
Treasury stock, shares | 262,472 | 262,472 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Oil and gas revenues | $ 0 | $ 1,802 |
Costs and expenses: | ||
Lease operating expenses | 0 | 3,701 |
General and administrative | 32,851 | 39,549 |
Depletion and accretion | 0 | 1,310 |
Impairment of oil and gas property | 0 | 20,000 |
Total operating expenses | 32,851 | 64,560 |
Net loss | $ (32,851) | $ (62,758) |
Net loss per common share – basic and diluted (in Dollars per share) | $ 0 | $ 0 |
Weighted average number of common shares outstanding – basic and diluted (in Shares) | 128,293,536 | 128,293,269 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (32,851) | $ (62,758) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Depletion and accretion | 0 | 1,310 |
Impairment of oil and gas property | 0 | 20,000 |
Changes in operating assets and liabilities: | ||
Accounts payable and accrued expenses | 250 | 4,211 |
Net cash used in operating activities | (32,601) | (37,237) |
Cash flows from financing activities: | ||
Payments for acquisition of treasury stock | 0 | (86) |
Advances from related parties, net | 33,150 | 37,786 |
Net cash provided by financing activities | 33,150 | 37,700 |
Net increase in cash | 549 | 463 |
Cash and cash equivalents, beginning of period | 6,051 | 6,000 |
Cash and cash equivalents, end of period | 6,600 | 6,463 |
Supplemental disclosures: | ||
Interest paid | 0 | 0 |
Income taxes paid | 0 | 0 |
Non-cash investing and financing transactions: | ||
Change in estimate of asset retirement costs | $ 0 | $ 911 |
Note 1. Summary of Significant
Note 1. Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | Note 1. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited interim consolidated financial statements of Brenham Oil & Gas Corp. (“Brenham”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in Brenham’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2015. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the unaudited interim consolidated financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year as reported in the Form 10-K have been omitted. Organization, Ownership and Business Brenham Oil & Gas, Inc. was incorporated under the laws of the State of Texas in November 1997 and became a wholly-owned subsidiary of American International Industries, Inc. (“American”) in November 1997. On April 21, 2010, the Company was re-domiciled in Nevada as Brenham Oil & Gas Corp. (“Brenham”) and Brenham Oil & Gas, Inc. became a wholly-owned subsidiary of Brenham. American was issued 64,977,093 shares of common stock of Brenham in connection with the reorganization in exchange for all shares outstanding of Brenham Oil & Gas, Inc. The reorganization has been retroactively applied to the consolidated financial statements for all periods presented. Use of Estimates In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Going Concern The consolidated financial statements have been prepared on a going concern basis, which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company incurred a loss from operations during the three months ended March 31, 2016 and 2015, has financial commitments in excess of current capital resources, and expects to incur further losses in the future, thus raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management plans to obtain the necessary financing to meet its obligations during 2015. These financials do not include any adjustments relating to the recoverability and reclassification of recorded asset amounts, or amounts and classifications of liabilities that might result from this uncertainty. Cash and Cash Equivalents Brenham considers all short-term securities purchased with a maturity of three months or less to be cash equivalents. Accounts Receivable Accounts receivable consist primarily of receivables from oil and gas revenue, and are carried at the expected net realizable value. Oil & Gas Properties The Company follows the full cost method of accounting for its investments in oil and gas properties, whereby all costs incurred in connection with the acquisition, exploration for and development of petroleum and natural gas reserves, including unproductive wells, are capitalized. Such costs include lease acquisition, geological and geophysical activities, rentals on non-producing leases, drilling, completing and equipping of oil and gas wells and administrative costs directly attributable to those activities, and asset retirement costs. General and administrative costs related to production and general overhead are expensed as incurred. Disposition of oil properties are accounted for as a reduction of capitalized costs, with no gain or loss recognized unless such adjustment would significantly alter the relationship between capital costs and proved reserves of oil, in which case the gain or loss is recognized in the statement of operations. Future development, site restoration, dismantlement and abandonment costs, are estimated property by property, based upon current economic conditions and regulatory requirements, and are included in amortization of our oil and natural gas property costs. Depletion of capitalized oil properties and estimated future development costs, excluding unproved properties, are based on the unit-of-production method based on proved reserves. At the end of each quarter, the unamortized cost of oil and natural gas properties, net of related deferred income taxes, is limited to the sum of the estimated future after-tax net revenues from proved properties, after giving effect to cash flow hedge positions, discounted at 10%, and the lower of cost or fair value of unproved properties, adjusted for related income tax effects. This limitation is known as the “ceiling test,” and is based on SEC rules for the full cost oil and gas accounting method. There was no ceiling test write-down recorded during the three months ended March 31, 2016 and 2015. The Company assesses the carrying value of its unproved properties for impairment periodically. If the results of an assessment indicate that an unproved property is impaired (which was assessed in connection with the Company’s evaluation of goodwill impairment), then the carrying value of the unproved properties is added to the proved oil property costs to be amortized and subject to the ceiling test. The Company recorded an oil and gas impairment of $20,000 during the three months ended March 31, 2015. In 2015, the Company wrote off all of the Company’s properties as impairment expense in the amount of $200,153. Income Taxes Brenham is a taxable entity and recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to be in effect when the temporary differences reverse. The effect on the deferred tax assets and liabilities of a change in tax rates is recognized in income in the year that includes the enactment date of the rate change. A valuation allowance is used to reduce deferred tax assets to the amount that is more likely than not to be realized. Interest and penalties associated with income taxes are included in selling, general and administrative expense. Brenham has adopted ASC 740-10 “Accounting for Uncertainty in Income Taxes,” which prescribes a comprehensive model of how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return. ASC 740-10 states that a tax benefit from an uncertain position may be recognized if it is “more likely than not” that the position is sustainable, based upon its technical merits. The tax benefit of a qualifying position is the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. As of March 31, 2016, Brenham had not recorded any tax benefits from uncertain tax positions. Net Loss Per Common Share Net loss per common share is computed by dividing the net loss by the weighted average number of shares outstanding during a period. The weighted average number of shares was calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding. Basic and diluted net losses per share were the same, as there were no common stock equivalents outstanding. For the three months ended March 31, 2016 and 2015, 3,000,000 stock options were excluded from the computation of diluted net loss per share, as the inclusion of such stock options would be anti-dilutive. Subsequent Events Brenham has evaluated all transactions from March 31, 2016 through the financial statement issuance date for subsequent event disclosure consideration. Recent Accounting Pronouncements There were various accounting standards and interpretations issued recently, none of which are expected to have a material impact on the Company’s financial position, operations, or cash flows. |
Note 2. Accounts Payable _ Rela
Note 2. Accounts Payable – Related Parties | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Note 2. Accounts Payable – Related Parties Related party payables at March 31, 2016 consisted of $553,800 owed to American as advances to assist with Brenham’s operating expenses, and $131,100 owed to KDT for the acquisition of mineral rights for the Gillock Field. Related party payables at December 31, 2015 consisted of $520,650 owed to American as advances to assist with Brenham’s operating expenses, and $131,100 owed to KDT and Daniel Dror II Trust of 2012 for the acquisition of mineral rights for the Gillock Field. KDT is owned by an entity which is controlled by the brother of Daniel Dror, Brenham’s Chairman, Chief Executive Officer, and President. Daniel Dror II is the adult son of Daniel Dror, Brenham’s Chairman and Chief Executive Officer. The advances to Brenham are non-interest bearing and due on demand. |
Note 3. Merger Agreement
Note 3. Merger Agreement | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | Note 3. Merger Agreement On April 25, 2016, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Angola International Capital Ltd., a Bermuda corporation (“AIC”) pursuant to which a wholly-owned subsidiary of the Company will be merged and into AIC which will be the surviving entity and will become a subsidiary of the Company. Prior to closing, Brenham shall effect a recapitalization that consists of a 200-to-one reverse split of its 128,042,064 shares of issued and outstanding common stock. As the date of this report, parties are still negotiating the final terms. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation The accompanying unaudited interim consolidated financial statements of Brenham Oil & Gas Corp. (“Brenham”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in Brenham’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2015. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the unaudited interim consolidated financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year as reported in the Form 10-K have been omitted. |
Organization Ownership and Business, Policy [Text Block] | Organization, Ownership and Business Brenham Oil & Gas, Inc. was incorporated under the laws of the State of Texas in November 1997 and became a wholly-owned subsidiary of American International Industries, Inc. (“American”) in November 1997. On April 21, 2010, the Company was re-domiciled in Nevada as Brenham Oil & Gas Corp. (“Brenham”) and Brenham Oil & Gas, Inc. became a wholly-owned subsidiary of Brenham. American was issued 64,977,093 shares of common stock of Brenham in connection with the reorganization in exchange for all shares outstanding of Brenham Oil & Gas, Inc. The reorganization has been retroactively applied to the consolidated financial statements for all periods presented. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
Going Concern, Policy [Text Block] | Going Concern The consolidated financial statements have been prepared on a going concern basis, which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company incurred a loss from operations during the three months ended March 31, 2016 and 2015, has financial commitments in excess of current capital resources, and expects to incur further losses in the future, thus raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management plans to obtain the necessary financing to meet its obligations during 2015. These financials do not include any adjustments relating to the recoverability and reclassification of recorded asset amounts, or amounts and classifications of liabilities that might result from this uncertainty. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents Brenham considers all short-term securities purchased with a maturity of three months or less to be cash equivalents. |
Receivables, Policy [Policy Text Block] | Accounts Receivable Accounts receivable consist primarily of receivables from oil and gas revenue, and are carried at the expected net realizable value. |
Oil and Gas Properties Policy [Policy Text Block] | Oil & Gas Properties The Company follows the full cost method of accounting for its investments in oil and gas properties, whereby all costs incurred in connection with the acquisition, exploration for and development of petroleum and natural gas reserves, including unproductive wells, are capitalized. Such costs include lease acquisition, geological and geophysical activities, rentals on non-producing leases, drilling, completing and equipping of oil and gas wells and administrative costs directly attributable to those activities, and asset retirement costs. General and administrative costs related to production and general overhead are expensed as incurred. Disposition of oil properties are accounted for as a reduction of capitalized costs, with no gain or loss recognized unless such adjustment would significantly alter the relationship between capital costs and proved reserves of oil, in which case the gain or loss is recognized in the statement of operations. Future development, site restoration, dismantlement and abandonment costs, are estimated property by property, based upon current economic conditions and regulatory requirements, and are included in amortization of our oil and natural gas property costs. Depletion of capitalized oil properties and estimated future development costs, excluding unproved properties, are based on the unit-of-production method based on proved reserves. At the end of each quarter, the unamortized cost of oil and natural gas properties, net of related deferred income taxes, is limited to the sum of the estimated future after-tax net revenues from proved properties, after giving effect to cash flow hedge positions, discounted at 10%, and the lower of cost or fair value of unproved properties, adjusted for related income tax effects. This limitation is known as the “ceiling test,” and is based on SEC rules for the full cost oil and gas accounting method. There was no ceiling test write-down recorded during the three months ended March 31, 2016 and 2015. The Company assesses the carrying value of its unproved properties for impairment periodically. If the results of an assessment indicate that an unproved property is impaired (which was assessed in connection with the Company’s evaluation of goodwill impairment), then the carrying value of the unproved properties is added to the proved oil property costs to be amortized and subject to the ceiling test. The Company recorded an oil and gas impairment of $20,000 during the three months ended March 31, 2015. In 2015, the Company wrote off all of the Company’s properties as impairment expense in the amount of $200,153. |
Income Tax, Policy [Policy Text Block] | Income Taxes Brenham is a taxable entity and recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to be in effect when the temporary differences reverse. The effect on the deferred tax assets and liabilities of a change in tax rates is recognized in income in the year that includes the enactment date of the rate change. A valuation allowance is used to reduce deferred tax assets to the amount that is more likely than not to be realized. Interest and penalties associated with income taxes are included in selling, general and administrative expense. Brenham has adopted ASC 740-10 “Accounting for Uncertainty in Income Taxes,” which prescribes a comprehensive model of how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return. ASC 740-10 states that a tax benefit from an uncertain position may be recognized if it is “more likely than not” that the position is sustainable, based upon its technical merits. The tax benefit of a qualifying position is the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. As of March 31, 2016, Brenham had not recorded any tax benefits from uncertain tax positions. |
Earnings Per Share, Policy [Policy Text Block] | Net Loss Per Common Share Net loss per common share is computed by dividing the net loss by the weighted average number of shares outstanding during a period. The weighted average number of shares was calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding. Basic and diluted net losses per share were the same, as there were no common stock equivalents outstanding. For the three months ended March 31, 2016 and 2015, 3,000,000 stock options were excluded from the computation of diluted net loss per share, as the inclusion of such stock options would be anti-dilutive. |
Subsequent Events, Policy [Policy Text Block] | Subsequent Events Brenham has evaluated all transactions from March 31, 2016 through the financial statement issuance date for subsequent event disclosure consideration. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements There were various accounting standards and interpretations issued recently, none of which are expected to have a material impact on the Company’s financial position, operations, or cash flows. |
Note 1. Summary of Significan10
Note 1. Summary of Significant Accounting Policies (Details) - USD ($) | Apr. 21, 2010 | Mar. 31, 2016 | Mar. 31, 2015 |
Accounting Policies [Abstract] | |||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 64,977,093 | ||
Fair Value Inputs, Discount Rate | 10.00% | ||
Impairment of Oil and Gas Properties (in Dollars) | $ 0 | $ 20,000 | |
Unproved Oil and Gas Property, Successful Effort Method (in Dollars) | $ 200,153 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,000,000 | 3,000,000 |
Note 2. Accounts Payable _ Re11
Note 2. Accounts Payable – Related Parties (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Note 2. Accounts Payable – Related Parties (Details) [Line Items] | ||
Accounts Payable, Related Parties, Current | $ 684,900 | $ 651,750 |
Affiliated Entity [Member] | ||
Note 2. Accounts Payable – Related Parties (Details) [Line Items] | ||
Accounts Payable, Related Parties, Current | 553,800 | 520,650 |
Immediate Family Member of Management or Principal Owner [Member] | ||
Note 2. Accounts Payable – Related Parties (Details) [Line Items] | ||
Accounts Payable, Related Parties, Current | $ 131,100 | $ 131,100 |
Note 3. Merger Agreement (Detai
Note 3. Merger Agreement (Details) - shares | Apr. 25, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Note 3. Merger Agreement (Details) [Line Items] | |||
Common Stock, Shares, Issued | 128,293,536 | 128,293,536 | |
Subsequent Event [Member] | |||
Note 3. Merger Agreement (Details) [Line Items] | |||
Stockholders' Equity, Reverse Stock Split | 200-to-one | ||
Common Stock, Shares, Issued | 128,042,064 |