Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2015 | Jul. 09, 2015 | |
Document and Entity Information: | ||
Entity Registrant Name | Brenham Oil & Gas Corp. | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2015 | |
Amendment Flag | false | |
Entity Central Index Key | 1,501,720 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 128,041,564 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Mar. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 6,463 | $ 6,000 |
Total current assets | 6,463 | 6,000 |
Oil and gas properties, full cost method | ||
Costs Subject to amortization | 92,210 | 91,503 |
Costs not being amortized | 91,900 | 341,900 |
Accumulated depletion | (4,151) | (3,962) |
Total assets | 186,422 | 435,441 |
Current liabilities: | ||
Accounts payable and accrued expenses | 25,064 | 249,235 |
Accounts payable - related party | 543,481 | 505,695 |
Total current liabilities | 568,545 | 754,930 |
Long-term liabilities: | ||
Asset retirement obligations | 5,831 | 5,621 |
Total liabilities | $ 574,376 | $ 760,551 |
Stockholders' deficit: | ||
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, 0 shares issued and outstanding | ||
Common stock, $0.0001 par value, 200,000,000 shares authorized; 128,293,536 shares issued and outstanding | $ 12,830 | $ 12,830 |
Additional paid-in capital | (4,547) | 992,981 |
Accumulated deficit, during the exploration stage | 992,981 | (1,326,460) |
Less: treasury stock, at cost; 251,972 and 251,472 shares | (1,389,218) | (4,461) |
Total stockholders' deficit | (387,954) | (325,110) |
Total liabilities and stockholders' deficit | $ 186,422 | $ 435,441 |
CONSOLIDATED BALANCE SHEETS (U3
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 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 | $ 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, at cost | 251,972 | 251,472 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Income Statement [Abstract] | ||
Revenue | $ 1,802 | $ 10,421 |
Costs and expenses: | ||
Lease operating expenses | 3,701 | 10,616 |
General and administrative | 39,549 | 46,988 |
Depletion and accretion | 1,310 | $ 983 |
Impairment of oil and gas property | 20,000 | |
Total costs and expenses | 64,560 | $ 58,587 |
Net loss | $ (62,758) | $ (48,166) |
Net loss per share - basic and diluted | $ 0 | $ 0 |
Weighted average common shares outstanding - basic and diluted | 128,293,269 | 128,102,064 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Cash flows from operating activities: | ||
Net loss | $ (62,758) | $ (48,166) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Depletion and accretion | 1,310 | $ 983 |
Impairment of oil and gas property | $ 20,000 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | $ 2,437 | |
Accounts payable and accrued expenses | $ 4,211 | (19,822) |
Net cash used in operating activities | $ (37,237) | (64,568) |
Cash flows from investing activities: | ||
Payment of deposit for purchase of oil and gas property | (20,000) | |
Net cash used in investing activities | $ (20,000) | |
Cash flows from financing activities: | ||
Payments for acquisition of treasury stock | $ (86) | |
Advances from related parties | 37,786 | $ 84,582 |
Net cash provided by financing activities | 37,700 | 84,582 |
Net increase (decrease) in cash | 463 | 14 |
Cash and cash equivalents, beginning of period | 6,000 | 6,859 |
Cash and cash equivalents, end of period | 6,463 | $ 6,873 |
Non-cash investing and financing transactions: | ||
Capitalized asset retirement obligations | $ 911 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2015 | |
Disclosure Text Block [Abstract] | |
Summary of Significant Accounting Policies | 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 Brenhams Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2014. 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, 2015 and 2014, has financial commitments in excess of current capital resources, and expects to incur further losses in the future, thus raising substantial doubt about the Companys 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, 2015 and 2014. 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 Companys 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. As of March 31, 2015 and December 31, 2014, the Company has properties in the amount of $91,900 and $341,900, respectively, which are being excluded from amortization because they have not been evaluated to determine whether proved reserves are associated with those properties. Costs in excess of the present value of estimated future net revenues as discussed above are charged to impairment expense. 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, 2015, 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, 2015 and 2014, 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, 2015 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 Companys financial position, operations, or cash flows. |
Oil and Gas Properties
Oil and Gas Properties | 3 Months Ended |
Mar. 31, 2015 | |
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | |
Oil and Gas Properties | Note 2. Oil and Gas Properties Brenham uses the full cost method of accounting for oil and gas producing activities. Costs to acquire mineral interests in oil and gas properties, to drill and equip exploratory wells used to find proved reserves, and to drill and equip development wells, including directly related overhead costs and related asset retirement costs are capitalized. Properties not subject to amortization consist of exploration and development costs that are evaluated on a property-by-property basis. Amortization of these unproved property costs begins when the properties become proved, or their values become impaired and the corresponding costs are added to the capitalized costs subject to amortization. During the three months ended March 31, 2015 and 2014, depletion of oil and gas properties of $189 and $821, respectively, was recorded. Costs of oil and gas properties are amortized using the units of production method. Sales of oil and natural gas properties are accounted for as adjustments to the net full cost pool, and generally, no gain or loss is recognized. In applying the full cost method, Brenham performs an impairment test (ceiling test) at each reporting date, whereby the carrying value of oil and gas properties is compared to the estimated present value of its proved reserves discounted at a 10-percent interest rate of future net revenues, based on current economic and operating conditions at the end of the period, plus the cost of properties not being amortized, plus the lower of cost or fair market value of unproved properties included in costs being amortized, less the income tax effects related to book and tax basis differences of the properties. If capitalized costs exceed this limit, the excess is charged as an impairment expense. During the three months ended March 31, 2015 and 2014, the Company recorded $20,000 and $0 of impairment expense, respectively. Below are the components of the oil and gas properties balance: March 31, 2015 December 31, 2014 Royalty interest in 24 acres in Washington County, Texas (a) $ $ Royalty interest in 700 acres in the Permian Basin (b) 8,400 8,400 10% working interest in the Pierce Junction Field (c) 87,500 87,500 Lease of 394 acres in the Gillock Field (d) 83,500 83,500 Lease of 332 acres in Inez Prospet (e) 250,000 Capitalized asset retirement costs 4,710 4,003 Total oil and gas properties 184,110 433,403 Accumulated depletion (4,151 ) (3,962 ) Net capitalized costs $ 179,959 $ 429,441 a) Royalty interest in 24 acres in Washington County, Texas b) Royalty interest in 700 acres in the Permian Basin c) 10% working interest in the Pierce Junction Field d) Lease of 394 acres in the Gillock Field e) Lease of 332 acres in the Inez Prospect |
Accounts Payables - Related Par
Accounts Payables - Related Party | 3 Months Ended |
Mar. 31, 2015 | |
Accounts Payables - Related Party | |
Accounts Payables - Related Party | Note 3. Accounts Payable Related Parties Related party payables at March 31, 2015 consisted of $412,381 owed to American as advances to assist with Brenhams operating expenses, and $131,100 owed to KDT for the acquisition of mineral rights for the Gillock Field. Related party payables at December 31, 2014 consists of $374,595 owed to American as advances to assist with Brenhams 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, Brenhams Chairman, Chief Executive Officer, and President. Daniel Dror II is the adult son of Daniel Dror, Brenhams Chairman and Chief Executive Officer. The advances to Brenham are non-interest bearing and due on demand. |
Asset Retirement Obligations
Asset Retirement Obligations | 3 Months Ended |
Mar. 31, 2015 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | Note 4. Asset Retirement Obligations The Company estimates the present value of future costs of dismantlement and abandonment of its wells, facilities, and other tangible long-lived assets, recording them as liabilities in the period incurred. Asset retirement obligations are calculated using an expected present value technique. Salvage values are excluded from the estimation. When the liability is initially recorded, the entity increases the carrying amount of the related long-lived asset. Accretion of the liability is recognized each period, and the capitalized cost is amortized over the useful life of the related asset. Upon settlement of the liability, the Company incurs a gain or loss based upon the difference between the estimated and final liability amounts. The Company records gains or losses from settlements as adjustments to the full cost pool. Accretion expense was $1,121 and $162 during the three months ended March 31, 2015 and 2014, respectively. The following table represents the change in the Companys asset retirement obligations during the three months ended March 31, 2015: Amount Asset retirement obligations as of December 31, 2014 $ 5,621 Additions Current year revision to previous estimates (911 ) Accretion during the three months ended March 31, 2015 1,121 Asset retirement obligations as of March 31, 2015 $ 5,831 |
Equity
Equity | 3 Months Ended |
Mar. 31, 2015 | |
Equity [Abstract] | |
Equity | Note 5. Equity Stock Options On December 5, 2012, Brenham issued 3,000,000 stock options to Brenhams Vice President - Exploration, Mr. L. Rogers Hardy, with an exercise price of $0.035 per share, expiring in 3 years, valued at $104,974 and recorded as share-based compensation. Brenham estimated the fair value of each stock option at the grant date as $0.035 by using the Black-Scholes option-pricing model, with the following weighted-average assumptions used for grants in 2012: December 5, 2012 Dividend yield 0.0 % Expected volatility 423.12 % Risk free interest 0.75 % Expected lives 3 years A summary of the status of Brenhams stock options to employees during the three months ended March 31, 2015 is presented below: Shares Weighted Average Exercise Price Intrinsic Value Outstanding and exercisable as of December 31, 2014 3,000,000 $ 0.035 Granted $ Exercised N/A Canceled / Expired N/A Outstanding and exercisable as of March 31, 2015 3,000,000 $ 0.035 $ |
Summary of Significant Accoun11
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Policy Text Block [Abstract] | |
Basis of Presentation | 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 Brenhams Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2014. 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 | 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 | 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 | 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, 2015 and 2014, has financial commitments in excess of current capital resources, and expects to incur further losses in the future, thus raising substantial doubt about the Companys 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 | 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 Accounts receivable consist primarily of receivables from oil and gas revenue, and are carried at the expected net realizable value. |
Oil & Gas Properties - Unproved | 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, 2015 and 2014. 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 Companys 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. As of March 31, 2015 and December 31, 2014, the Company has properties in the amount of $91,900 and $341,900, respectively, which are being excluded from amortization because they have not been evaluated to determine whether proved reserves are associated with those properties. Costs in excess of the present value of estimated future net revenues as discussed above are charged to impairment expense. |
Income Taxes | 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, 2015, Brenham had not recorded any tax benefits from uncertain tax positions. |
Net Loss Per Common Share | 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, 2015 and 2014, 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 | Subsequent Events Brenham has evaluated all transactions from March 31, 2015 through the financial statement issuance date for subsequent event disclosure consideration. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements There were various accounting standards and interpretations issued recently, none of which are expected to have a material impact on the Companys financial position, operations, or cash flows. |
Oil and Gas Properties (Tables)
Oil and Gas Properties (Tables) | 3 Months Ended |
Mar. 31, 2015 | |
Oil And Gas Properties Tables | |
Components of oil and gas properties | Below are the components of the oil and gas properties balance: March 31, 2015 December 31, 2014 Royalty interest in 24 acres in Washington County, Texas (a) $ $ Royalty interest in 700 acres in the Permian Basin (b) 8,400 8,400 10% working interest in the Pierce Junction Field (c) 87,500 87,500 Lease of 394 acres in the Gillock Field (d) 83,500 83,500 Lease of 332 acres in Inez Prospet (e) 250,000 Capitalized asset retirement costs 4,710 4,003 Total oil and gas properties 184,110 433,403 Accumulated depletion (4,151 ) (3,962 ) Net capitalized costs $ 179,959 $ 429,441 a) Royalty interest in 24 acres in Washington County, Texas b) Royalty interest in 700 acres in the Permian Basin c) 10% working interest in the Pierce Junction Field d) Lease of 394 acres in the Gillock Field e) Lease of 332 acres in the Inez Prospect |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 3 Months Ended |
Mar. 31, 2015 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule of Asset Retirement Obligations | The following table represents the change in the Companys asset retirement obligations during the three months ended March 31, 2015: Amount Asset retirement obligations as of December 31, 2014 $ 5,621 Additions Current year revision to previous estimates (911 ) Accretion during the three months ended March 31, 2015 1,121 Asset retirement obligations as of March 31, 2015 $ 5,831 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2015 | |
Equity Tables | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The following weighted-average assumptions used for grants in 2012: December 5, 2012 Dividend yield 0.0 % Expected volatility 423.12 % Risk free interest 0.75 % Expected lives 3 years |
Schedule of Share-based compensation Stock Options Activity | A summary of the status of Brenhams stock options to employees during the three months ended March 31, 2015 is presented below: Shares Weighted Average Exercise Price Intrinsic Value Outstanding and exercisable as of December 31, 2014 3,000,000 $ 0.035 Granted $ Exercised N/A Canceled / Expired N/A Outstanding and exercisable as of March 31, 2015 3,000,000 $ 0.035 $ |
Oil and gas properties (Details
Oil and gas properties (Details) | Dec. 31, 2015USD ($)a | Mar. 31, 2015USD ($)a | Dec. 31, 2014USD ($)a | Apr. 10, 2014 | |
Oil and gas properties, costs subject to amortization | $ 92,210 | $ 91,503 | |||
Oil and gas properties, costs not subject to amortization | 91,900 | 341,900 | |||
Oil and Gas Properties | 184,110 | 433,403 | |||
Net Capitalized Costs | 179,959 | 429,441 | |||
Working interest | 100.00% | ||||
Premian Basin Project [Member] | |||||
Oil and gas properties, costs not subject to amortization | [1] | $ 8,400 | $ 8,400 | ||
Acres of land | a | 700 | 700 | |||
Gillock Field Project [Member] | |||||
Oil and gas properties, costs not subject to amortization | [2] | $ 83,500 | $ 83,500 | ||
Acres of land | a | 394 | 394 | |||
Inez Prospect Project [Member] | |||||
Oil and gas properties, costs not subject to amortization | [3] | $ 250,000 | |||
Acres of land | a | 332 | 332 | |||
Washington County Texas Project [Member] | |||||
Oil and gas properties, costs not subject to amortization | [4] | ||||
Acres of land | a | 24 | 24 | |||
Peirce Junction Field Oil and Gas Properties [Member] | |||||
Oil and gas properties, costs subject to amortization | [5] | $ 87,500 | $ 87,500 | ||
Capitalized asset retirement costs | 4,710 | 4,003 | |||
Accumulated Depletion | $ (4,151) | $ (3,962) | |||
Working interest | 10.00% | ||||
[1] | b) Royalty interest in 700 acres in the Permian Basin- On July 22, 2011, the Company entered into an Asset Purchase and Sale Agreement with Doug Pedrie, Davis Pedrie Associates, LLC and Energex Oil, Inc. ("Sellers"), pursuant to which the Company acquired 700 acres of unproved property located in the Permian Basin near Abilene, Texas. The agreement provided for the Sellers to complete all oil lease assignments by August 15, 2011. The purchase consideration for the acquisition is the issuance to Sellers of 2,000,000 restricted shares of Brenham common stock valued at $8,400, with an additional 2,000,000 restricted shares to be issued contingent upon realization of certain production targets in 2012. On March 8, 2012, this agreement was rescinded and replaced with an agreement that in consideration for the Brenham share issuance; Brenham has a 2.5% overriding royalty interest in all of the leases associated with this property and any properties acquired or renewed in the future within a ten-mile radius. In addition, the contingency to issue additional shares was removed. | ||||
[2] | d) Lease of 394 acres in the Gillock Field- Brenham leased 394 acres in Galveston County for the acquisition of 100% working interest in the Gillock Field from Kemah Development Texas, L.P. ("KDT") and Daniel Dror II Trust of 2012 for $300 per acre, or $131,100 (recorded as accounts payable - related parties in the consolidated balance sheet as of March 31, 2014 and December 31, 2013) and 200,000 shares of American restricted common stock. Brenham issued 3,326,316 shares of Brenham restricted common stock to American as payment in full for the 200,000 shares issued by American on Brenham's behalf. In 2002, KDT paid $1,175,000 for the original 437 acres and the mineral rights to 394 acres. However, KDT assigned no value to the mineral rights. Due to the related parties having no basis in the mineral rights, Brenham expensed the costs associated with the transaction, which totaled $447,100 and consisted of i) $316,000 of stock-based compensation calculated at the grant date fair value of the 3,326,316 shares of Brenham common stock issued to American (which equaled the grant date fair value of the common stock American issued to KDT and the Daniel Dror II Trust of 2012) and ii) the $131,100 related party payable. | ||||
[3] | e) Lease of 332 acres in the Inez Prospect - On January 8, 2014, the Company entered into a letter of intent with a third party to acquire a 332-acre oil and gas lease, the Inez Prospect, located in Victoria County, Texas, and the #1 Roberts Unit well-bore, and all the down-hole equipment and surface equipment associated therewith. On April 10, 2014, the Company and the third party entered into a prospect and lease acquisition agreement. Pursuant to the agreement, the Company has agreed to acquire 100% of the working interest for a total purchase price of $250,000, consisting of a $20,000 nonrefundable deposit, which was paid during the year ended December 31, 2014, and a payment of the remaining $230,000 prior to the beginning of any exploration which was recorded in accounts payable and accrued expenses at December 31, 2014. The Company elected not to complete the purchase of the Inez Prospect and wrote off the amounts recorded as of March 31, 2015. The Company recorded an impairment expense of $20,000 in connection with the write off of this property. | ||||
[4] | a) Royalty interest in 24 acres in Washington County, Texas- The Company has an oil and gas mineral royalty interest, covering a twenty-four acre tract of land located in Washington County, Texas, which is carried on the balance sheet at $0. The royalty interest is currently leased by Anadarko Petroleum Corporation for a term continuing until the covered minerals are no longer produced in paying quantities from the leased premises. Royalties on the minerals produced are currently incidental and paid to the Company as follows: (i) for oil and other liquid hydrocarbons, and (ii) for gas (including casing-head gas); the royalty is one-sixth of the net proceeds realized by Anadarko Petroleum Corporation on the sale thereof, less a proportionate part of ad valorem taxes and production, severance, or other excise taxes. In addition, the Company is entitled to shut-in royalties of $1 per acre of land for every ninety-day period within which one or more of the wells in leased premises, or lands pooled therewith, are capable of producing paying quantities, but such wells are either shut-in or production is not being sold. | ||||
[5] | c) 10% working interest in the Pierce Junction Field- On March 12, 2013, Brenham entered into an agreement with an effective date of January 1, 2013, to purchase a 10% working interest in the Pierce Junction Field for $50,000 cash and a $70,000 non-interest bearing note payable due on August 31, 2013. On May 30, 2013, the holder of this note payable accepted $37,500 as full payment and Brenham recorded $32,500 as a reduction in the value of the oil and gas property due to the decrease in the consideration given to acquire it. |
Oil and Gas Properties (Detai16
Oil and Gas Properties (Details Narrative) | Apr. 10, 2014USD ($) | Mar. 31, 2014USD ($)shares | May. 30, 2013USD ($) | Jan. 01, 2013USD ($) | Jul. 22, 2011shares | Mar. 31, 2015USD ($) | Mar. 31, 2014USD ($)$ / a | Dec. 31, 2002USD ($)a | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) |
Depletion of oil and gas | $ 189 | $ 821 | ||||||||
Restricted Shares | shares | 2,000,000 | |||||||||
Royalty interest | 2.50% | |||||||||
Payments to acquire working interest | $ 50,000 | |||||||||
Notes Payable | $ 37,500 | $ 70,000 | ||||||||
Notes Reduction | $ 32,500 | |||||||||
Working Interest | 100.00% | |||||||||
Payment to acquire land per acre | $ / a | 300 | |||||||||
Payments to acquire land | $ 250,000 | |||||||||
Impairment | $ 20,000 | |||||||||
Accounts Payable | $ 230,000 | |||||||||
KDT Affiliated Entity [Member] | ||||||||||
Working Interest | 100.00% | 100.00% | ||||||||
Accounts Payable - related party | $ 131,100 | $ 131,100 | $ 131,100 | |||||||
Payments to acquire land | $ 1,175,000 | |||||||||
Acres of land | a | 437 | |||||||||
American Restricted Common Stock [Member] | ||||||||||
Restricted Shares | shares | 200,000 | |||||||||
Brenham Restricted Common Stock [Member] | ||||||||||
Restricted Shares | shares | 3,226,316 | |||||||||
Payments to acquire land | $ 447,100 | |||||||||
Stock based payments for land | $ 316,000 |
Accounts Payables - Related P17
Accounts Payables - Related Party (Details Narrative) - USD ($) | Mar. 31, 2015 | Dec. 31, 2014 |
American Affiliated Entity [Member] | ||
Accounts Payable - related party | $ 412,381 | $ 374,595 |
Asset Retirement Obligations (D
Asset Retirement Obligations (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Asset Retirement Obligation Disclosure [Abstract] | ||
Accretion Expense | $ 1,121 | $ 162 |
Asset Retirement Obligations 19
Asset Retirement Obligations (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Asset Retirement Obligation Disclosure [Abstract] | |||
Asset retirement obligations | $ 5,831 | $ 5,621 | |
Current year revision to previous estimates | (911) | ||
Accretion Expense | $ 1,121 | $ 162 |
Equity (Details Narrative)
Equity (Details Narrative) | 3 Months Ended |
Mar. 31, 2015$ / shares | |
Equity Details Narrative | |
Options based compensation | $ 104,974 |
Equity (Details)
Equity (Details) - Mar. 31, 2015 - $ / shares | Total |
Equity Details | |
Outstanding options- beginning | 3,000,000 |
Outstanding options- ending | 3,000,000 |
Excercisable options - beginning | 3,000,000 |
Excercisable options- ending | 3,000,000 |
Weighted Average Exercise Price - beginning | $ 0.035 |
Weighted Average Exercise Price - ending | $ 0.035 |
Equity (Details 2)
Equity (Details 2) - 3 months ended Mar. 31, 2015 | Total |
Equity Details 2 | |
Dividend Yield | 0.00% |
Expected volatility | 423.12% |
Risk Free Interest Rate | 0.75% |
Expected lives | 3 years |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Details Narrative) - shares | Apr. 21, 2015 | Mar. 31, 2015 | Dec. 31, 2014 |
Summary Of Significant Accounting Policies Details Narrative | |||
Issued Common Stock | 64,977,093 | 128,293,536 | 128,293,536 |