Document_and_Entity_Informatio
Document and Entity Information (USD $) | 9 Months Ended | ||
Sep. 30, 2013 | Nov. 14, 2013 | Jun. 29, 2012 | |
Document and Entity Information: | ' | ' | ' |
Entity Registrant Name | 'Brenham Oil & Gas Corp. | ' | ' |
Document Type | '10-Q | ' | ' |
Document Period End Date | 30-Sep-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Entity Central Index Key | '0001501720 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 128,104,064 | ' |
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 | '2013 | ' | ' |
Document Fiscal Period Focus | 'Q3 | ' | ' |
Entity Public Float | ' | ' | $618,821 |
BRENHAM_OIL_GAS_CORP_Balance_S
BRENHAM OIL & GAS CORP. - Balance Sheet (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Current assets: | ' | ' |
Cash and cash equivalents | $6,411 | $6,679 |
Accounts receivable | 3,976 | ' |
Total current assets | 10,387 | 6,679 |
Oil & gas properties | 97,765 | 8,400 |
Total assets | 108,152 | 15,079 |
Current liabilities: | ' | ' |
Accounts payable | 12,189 | 11,714 |
Accounts payable - related party | 306,222 | 285,198 |
Total current liabilities | 318,411 | 296,912 |
Asset retirement obligation | 2,060 | ' |
Total liabilities | 320,471 | 296,912 |
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; 122,768,473 and 110,577,093 shares issued, 122,579,001 and 110,413,621 shares outstanding | 12,278 | 11,058 |
Additional paid-in capital | 893,533 | 211,582 |
Accumulated deficit, during the exploration stage | -1,115,534 | -502,761 |
Less treasury stock, at cost; 189,472 and 163,472 shares, respectively | -2,596 | -1,712 |
Total stockholders' deficit | -212,319 | -281,833 |
Total liabilities and stockholders' deficit | $108,152 | $15,079 |
BRENHAM_OIL_GAS_CORP_Statement
BRENHAM OIL & GAS CORP. Statement of Financial Position - Parenthetical (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Statement of Financial Position | ' | ' |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 122,768,473 | 110,577,093 |
Common stock, shares outstanding (in shares) | 122,579,001 | 110,413,621 |
Treasury stock, at cost (in shares) | 189,472 | 163,472 |
BRENHAM_OIL_GAS_CORP_CONSOLIDA
BRENHAM OIL & GAS CORP. - CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | 191 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ' | ' | ' | ' | ' |
Revenue | $11,186 | $127 | $27,908 | $538 | $139,798 |
Costs and expenses: | ' | ' | ' | ' | ' |
Lease operating expenses | 8,799 | 0 | 23,190 | 0 | 23,190 |
General and administrative | 76,553 | 48,618 | 617,296 | 125,706 | 1,237,118 |
Depletion and accretion | 28 | 0 | 195 | 0 | 195 |
Total operating expenses | 85,380 | 48,618 | 640,681 | 125,706 | 1,260,503 |
Operating loss | -74,194 | -48,491 | -612,773 | -125,168 | -1,120,705 |
Other income (expenses): | ' | ' | ' | ' | ' |
Interest income | 0 | 0 | 0 | 0 | 19,123 |
Interest expense | 0 | 0 | 0 | 0 | -1,150 |
Total other income | 0 | 0 | 0 | 0 | 17,973 |
Loss before income taxes | -74,194 | -48,491 | -612,773 | -125,168 | -1,102,732 |
Income tax expense | 0 | 0 | 0 | 0 | 12,802 |
Net loss | ($74,194) | ($48,491) | ($612,773) | ($125,168) | ($1,115,534) |
Net loss per share - basic and diluted | $0 | $0 | ($0.01) | $0 | $0 |
Weighted average common shares outstanding - basic and diluted | 122,597,642 | 110,414,012 | 118,404,092 | 110,384,683 | 0 |
BRENHAM_OIL_GAS_CORP_CONSOLIDA1
BRENHAM OIL & GAS CORP. - CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | 191 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | |
Cash flows from operating activities: | ' | ' | ' |
Net loss | ($612,773) | ($125,168) | ($1,115,534) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' | ' |
Depletion and accretion | 195 | 0 | 195 |
Stock-based compensation | 316,000 | 5,000 | 527,020 |
Changes in current assets and liabilities: | ' | ' | ' |
Increase decrease in Accounts receivable | -3,976 | 0 | -3,976 |
Increase decrease in Accounts receivable - related party | 131,100 | -697 | 131,100 |
Increase decrease in Accounts payable | 475 | -1,935 | 12,189 |
Net cash used in operating activities | -168,979 | -122,800 | -449,006 |
Cash flows from investing activities: | ' | ' | ' |
Payments for acquisition of oil & gas properties | -87,500 | 0 | -87,500 |
Net cash provided by investing activities | -87,500 | 0 | -87,500 |
Cash flows from financing activities: | ' | ' | ' |
Loans from related parties | 157,095 | 123,977 | 422,413 |
Payments for acquisition of treasury stock | -884 | -1,101 | -2,596 |
Proceeds from sale of common stock | 100,000 | 0 | 123,100 |
Net cash provided by financing activities | 256,211 | 122,876 | 542,917 |
Net increase (decrease) in cash | -268 | 76 | 6,411 |
Cash and cash equivalents, beginning of period | 6,679 | 6,426 | 0 |
Cash and cash equivalents, end of period | 6,411 | 6,502 | 6,411 |
Supplemental schedule of cash flow information: | ' | ' | ' |
Interest paid | 0 | 0 | 1,150 |
Taxes paid | 0 | 0 | 12,802 |
Non-cash transactions: | ' | ' | ' |
Issuance of stock for oil & gas properties | 0 | 0 | 8,400 |
Issuance of common stock to convert payable due to American International Industries, Inc. | 267,171 | 0 | 267,171 |
Capitalized asset retirement costs | $1,966 | $0 | $1,966 |
Note_1_Summary_of_Significant_
Note 1 - Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2013 | |
Notes | ' |
Note 1 - 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 Brenham's Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2012. 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. 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. | |
Brenham is an exploration stage company and will continue to be so until commencement of substantial production from its oil and gas operations. | |
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. Significant estimates generally include those with respect to the amount of oil and gas depletion and asset retirement obligation. | |
Reclassifications | |
Certain reclassifications have been made to amounts in prior periods to conform to the current period presentation. All reclassifications have been applied consistently to the periods presented. | |
Cash and Cash Equivalents | |
Brenham considers all short-term securities purchased with an original 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, Full Cost Method | |
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. | |
Under this method, all costs, including internal costs directly related to acquisition, exploration and development activities, are capitalized as oil and gas property costs. 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. Brenham assesses overall values of unproved properties, if any, on at least an annual basis or when there has been an indication that impairment in value may have occurred. Impairment of unproved properties is assessed based on management's intention with regard to future development of individually significant properties and the ability of Brenham to obtain funds to finance their programs. If the results of an assessment indicate that the properties are impaired, the amount of the impairment is added to the capitalized costs to be amortized. | |
Under this method, sales of oil and natural gas properties are accounted for as adjustments to the net full cost pool with no gain or loss recognized, unless the adjustment would significantly alter the relationship between capitalized costs and proved reserves. If it is determined that the relationship is significantly altered, the corresponding gain or loss will be recognized in the consolidated statements of operations. | |
Costs of oil and gas properties are amortized using the units of production method under this method. Amortization expense calculated per equivalent physical unit of production amounted to $0.35 per barrel of oil equivalent for the nine months ended September 30, 2013. | |
Ceiling Test | |
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 nine months ended September 30, 2013 and 2012, no impairment of oil and gas properties was recorded. | |
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 September 30, 2013, 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. | |
The Company currently does not have any dilutive financial instruments outstanding. | |
Subsequent Events | |
Brenham has evaluated all transactions from September 30, 2013, 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 a have a material impact on our financial position, operations or cash flows. | |
Note_2_Oil_and_Gas_Properties
Note 2. Oil and Gas Properties | 9 Months Ended | ||
Sep. 30, 2013 | |||
Notes | ' | ||
Note 2. 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 and nine months ended September 30, 2013, depletion of oil and gas properties of $23 and $101, 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 nine months ended September 30, 2013 and 2012, no impairment of oil and gas properties was recorded. | |||
Below are the components of Brenham’s oil and gas properties recorded: | |||
30-Sep-13 | 31-Dec-12 | ||
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 | - | |
Lease of 394 acres in the Gillock Field (d) | - | - | |
Capitalized asset retirement costs | 1,966 | - | |
Total oil and gas properties | 97,866 | 8,400 | |
Accumulated depletion | (101) | - | |
Net capitalized costs | $ 97,765 | $ 8,400 | |
(a) Royalty interest in 24 acres in Washington County, Texas - We have 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 Brenham 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, Brenham 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. | |||
(b) Royalty interest in 700 acres in the Permian Basin - On July 22, 2011, Brenham entered into an Asset Purchase and Sale Agreement with Doug Pedrie, Davis Pedrie Associates, LLC and Energex Oil, Inc. (“Sellers”), pursuant to which Brenham 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. | |||
(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. | |||
(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 and 200,000 shares of American restricted common stock. The $131,100 is to be paid as follows: $100,000 on or before June 30, 2013 and $31,100 on or before October 30, 2013. Brenham is seeking to further extend this note. KDT subsequently extended the payment terms for these amounts to on or before October 31, 2013. 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) and ii) the $131,100 related party payable. | |||
The following table sets forth the changes in the total cost of oil and gas properties during the nine months ended September 30, 2013: | |||
Balance at beginning of period – December 31, 2012 | $ 8,400 | ||
Acquisition of oil and gas interests: | |||
Cash | 87,500 | ||
Capitalized asset retirement costs | 1,966 | ||
Balance at end of period – September 30, 2013 | $ 97,866 |
Note_3_Payables_Related_Party
Note 3. Payables - Related Party | 9 Months Ended |
Sep. 30, 2013 | |
Notes | ' |
Note 3. Payables - Related Party | ' |
Note 3. Payables - Related Party | |
Related party payables at September 30, 2013 represent $175,122 owed to American as advances to assist with Brenham's operating expenses and $131,100 owed for the acquisition of mineral rights for the Gillock Field from Kemah Development Texas, L.P. (“KDT”) and Daniel Dror II Trust of 2012. Related party payables at December 31, 2012 were comprised of $273,171 owed to American as advances to assist with Brenham's operating expenses, $8,571 owed to L. Rogers Hardy for travel and operating expenses, and $3,456 owed to Scott Gaille for operating expenses. KDT is owned by an entity which is controlled by the brother of Daniel Dror, Brenham’s Chairman, Chief Executive Officer, and President. Scott Gaille is the former President of Brenham and Bryant Mook and L. Rogers Hardy are Vice Presidents of Brenham. The advances to American are non-interest bearing and due on demand. | |
American will fully fund the operations of Brenham for the next twelve months. |
Note_4_Equity
Note 4. Equity | 9 Months Ended | |||
Sep. 30, 2013 | ||||
Notes | ' | |||
Note 4. Equity | ' | |||
Note 4. Equity | ||||
Common Stock | ||||
In December 1997, Brenham sold 64,977,093 common shares to a related party for $1,000. | ||||
In April 2010, American, the sole stockholder of Brenham Oil & Gas, Inc., entered into a Separation and Distribution Agreement to spin off Brenham Oil & Gas, Inc. from its parent. In conjunction with this transaction, American formed Brenham Oil & Gas, Corp., a Nevada corporation, with authorized common stock of 200,000,000 shares and authorized preferred stock of 10,000,000 shares. Brenham issued 64,977,093 shares of common stock to American for all shares of Brenham Oil & Gas, Inc., of which American issued as a dividend 10,297,019 shares to the existing stockholders of American, on a one-for-one basis. Brenham issued 13,000,000 shares of common stock for cash consideration of $22,100 and 22,000,000 shares for services valued at $45,466. American maintains control of Brenham through ownership of 65,346,390 shares of Brenham's common stock, representing about 53% of the outstanding shares as of September 30, 2013. | ||||
On July 22, 2011, Brenham entered into an Asset Purchase and Sale Agreement (the “Agreement”) with Doug Pedrie, Davis Pedrie Associates, LLC and Energex Oil, Inc., pursuant to which Brenham acquired 700 acres of unproved property located in the Permian Basin near Abilene, Texas. The Agreement provides 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 the (2,000,000) restricted shares for the contingency additional shares was removed. This property is on the balance sheet as "Oil and gas properties” for $8,400(Note 2). | ||||
On April 3, 2012, Brenham 100,000 shares valued at $5,000 to a third party for services. For the year ended December 31, 2012, Brenham paid $1,101 to repurchase 12,000 shares of its common stock for treasury. For the year ended December 31, 2011, Brenham paid $611 to repurchase 151,472 shares of its common stock for treasury, and issued 4,500,000 shares of its common stock valued at $18,900 for services to employees, directors and third parties, and 4,000,000 shares of its common stock valued at $16,800 to Brenham’s parent, American, for services. | ||||
On January 30, 2013, the Board of Directors approved and issued 3,340,000 shares of restricted common stock to AMIN to convert $267,171 owed to AMIN to equity. These shares were issued during the nine months ended September 30, 2013. | ||||
On February 28, 2013, Brenham leased 394 acres in Galveston County for the acquisition of mineral rights for the Gillock Field from Kemah Development Texas, L.P. and Daniel Dror II Trust of 2012 for $300 per acre, or $131,100 and 200,000 shares of AMIN restricted common stock. Brenham issued 3,326,316 shares of Brenham restricted common stock American as payment in full for the 200,000 shares issued by American on Brenham’s behalf. | ||||
On February 28, 2013, Brenham announced that Bryant Mook has been appointed President and Chief Operating Officer (COO). Also, Mr. Mook and Brenham signed a stock purchase agreement whereby Brenham has agreed to issue 11,050,127 shares of Brenham common stock in exchange for $200,000, to be issued and paid as follows: 5,525,064 shares for $100,000 on June 30, 2013, and 5,525,063 shares for $100,000 on October 31, 2013. In connection with this agreement, $100,000 in cash was received on June 5, 2013 and 5,525,064 shares of common stock were issued to Mr Mook. | ||||
For the nine months ended September 30, 2013, Brenham paid $884 for the repurchase of 26,000 shares of Brenham's common stock for treasury. | ||||
On December 5, 2012, Brenham issued 3,000,000 stock options to Brenham’s Vice President - Technology, Mr. L. Rogers Hardy, with an exercise price of 0.035 per share, expiring in 3 years, valued at $104,974 and recorded as stock-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 as follows: | ||||
5-Dec-12 | ||||
Dividend yield | 0.00% | |||
Expected volatility | 423.12% | |||
Risk free interest | 0.75% | |||
Expected lives | 3 years | |||
A summary of the status of Brenham's stock options to employees for the nine months ended September 30, 2013 is presented below: | ||||
Shares | Weighted Average Exercise Price | Intrinsic Value | ||
Outstanding and exercisable as of December 31, 2012 | 3,000,000 | $ 0.035 | ||
Granted | - | N/A | ||
Exercised | - | N/A | ||
Canceled / Expired | - | N/A | ||
Outstanding and exercisable as of September 30, 2013 | 3,000,000 | $ 0.035 | $ - | |
Note_5_Subsequent_Events
Note 5 - Subsequent Events | 9 Months Ended |
Sep. 30, 2013 | |
Notes | ' |
Note 5 - Subsequent Events | ' |
Note 5 – Subsequent Events | |
In connection with the stock purchase agreement with Mr. Mook (Note 4), $100,000 in cash was received on October 28, 2013 and 5,525,063 shares of common stock were issued to Mr Mook. |
Note_1_Summary_of_Significant_1
Note 1 - Summary of Significant Accounting Policies: Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
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 Brenham's Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2012. 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. |
Note_1_Summary_of_Significant_2
Note 1 - Summary of Significant Accounting Policies: Organization, Ownership and Business (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
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. 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. | |
Brenham is an exploration stage company and will continue to be so until commencement of substantial production from its oil and gas operations. |
Note_1_Summary_of_Significant_3
Note 1 - Summary of Significant Accounting Policies: Use of Estimates (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
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. Significant estimates generally include those with respect to the amount of oil and gas depletion and asset retirement obligation. |
Note_1_Summary_of_Significant_4
Note 1 - Summary of Significant Accounting Policies: Reclassifications (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Reclassifications | ' |
Reclassifications | |
Certain reclassifications have been made to amounts in prior periods to conform to the current period presentation. All reclassifications have been applied consistently to the periods presented. |
Note_1_Summary_of_Significant_5
Note 1 - Summary of Significant Accounting Policies: Cash and Cash Equivalents (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Cash and Cash Equivalents | ' |
Cash and Cash Equivalents | |
Brenham considers all short-term securities purchased with an original maturity of three months or less to be cash equivalents. |
Note_1_Summary_of_Significant_6
Note 1 - Summary of Significant Accounting Policies: Accounts Receivable (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Accounts Receivable | ' |
Accounts Receivable | |
Accounts receivable consist primarily of receivables from oil and gas revenue and are carried at the expected net realizable value. |
Note_1_Summary_of_Significant_7
Note 1 - Summary of Significant Accounting Policies: Oil & Gas Properties, Full Cost Method (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Oil & Gas Properties, Full Cost Method | ' |
Oil & Gas Properties, Full Cost Method | |
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. | |
Under this method, all costs, including internal costs directly related to acquisition, exploration and development activities, are capitalized as oil and gas property costs. 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. Brenham assesses overall values of unproved properties, if any, on at least an annual basis or when there has been an indication that impairment in value may have occurred. Impairment of unproved properties is assessed based on management's intention with regard to future development of individually significant properties and the ability of Brenham to obtain funds to finance their programs. If the results of an assessment indicate that the properties are impaired, the amount of the impairment is added to the capitalized costs to be amortized. | |
Under this method, sales of oil and natural gas properties are accounted for as adjustments to the net full cost pool with no gain or loss recognized, unless the adjustment would significantly alter the relationship between capitalized costs and proved reserves. If it is determined that the relationship is significantly altered, the corresponding gain or loss will be recognized in the consolidated statements of operations. | |
Costs of oil and gas properties are amortized using the units of production method under this method. Amortization expense calculated per equivalent physical unit of production amounted to $0.35 per barrel of oil equivalent for the nine months ended September 30, 2013. |
Note_1_Summary_of_Significant_8
Note 1 - Summary of Significant Accounting Policies: Ceiling Test (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Ceiling Test | ' |
Ceiling Test | |
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 nine months ended September 30, 2013 and 2012, no impairment of oil and gas properties was recorded. |
Note_1_Summary_of_Significant_9
Note 1 - Summary of Significant Accounting Policies: Income Taxes (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
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 September 30, 2013, Brenham had not recorded any tax benefits from uncertain tax positions. |
Recovered_Sheet1
Note 1 - Summary of Significant Accounting Policies: Net Loss Per Share (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Net Loss Per 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. | |
The Company currently does not have any dilutive financial instruments outstanding. |
Recovered_Sheet2
Note 1 - Summary of Significant Accounting Policies: Subsequent Events (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Subsequent Events | ' |
Subsequent Events | |
Brenham has evaluated all transactions from September 30, 2013, through the financial statement issuance date for subsequent event disclosure consideration. |
Recovered_Sheet3
Note 1 - Summary of Significant Accounting Policies: Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
There were various accounting standards and interpretations issued recently, none of which are expected to a have a material impact on our financial position, operations or cash flows. |
Note_2_Oil_and_Gas_Properties_
Note 2. Oil and Gas Properties: Oil and gas properties (Tables) | 9 Months Ended | ||
Sep. 30, 2013 | |||
Tables/Schedules | ' | ||
Oil and gas properties | ' | ||
30-Sep-13 | 31-Dec-12 | ||
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 | - | |
Lease of 394 acres in the Gillock Field (d) | - | - | |
Capitalized asset retirement costs | 1,966 | - | |
Total oil and gas properties | 97,866 | 8,400 | |
Accumulated depletion | (101) | - | |
Net capitalized costs | $ 97,765 | $ 8,400 |
Note_2_Oil_and_Gas_Properties_1
Note 2. Oil and Gas Properties: Oil and gas properties, Schedule of Significant Acquisitions and Disposals (Tables) | 9 Months Ended | |
Sep. 30, 2013 | ||
Tables/Schedules | ' | |
Oil and gas properties, Schedule of Significant Acquisitions and Disposals | ' | |
Balance at beginning of period – December 31, 2012 | $ 8,400 | |
Acquisition of oil and gas interests: | ||
Cash | 87,500 | |
Capitalized asset retirement costs | 1,966 | |
Balance at end of period – September 30, 2013 | $ 97,866 |
Note_4_Equity_Schedule_of_Shar
Note 4. Equity: Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Tables) | 9 Months Ended | |
Sep. 30, 2013 | ||
Tables/Schedules | ' | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | ' | |
On December 5, 2012, Brenham issued 3,000,000 stock options to Brenham’s Vice President - Technology, Mr. L. Rogers Hardy, with an exercise price of 0.035 per share, expiring in 3 years, valued at $104,974 and recorded as stock-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 as follows: | ||
5-Dec-12 | ||
Dividend yield | 0.00% | |
Expected volatility | 423.12% | |
Risk free interest | 0.75% | |
Expected lives | 3 years |
Recovered_Sheet4
Note 1 - Summary of Significant Accounting Policies: Organization, Ownership and Business (Details) | Apr. 21, 2010 |
Details | ' |
Common shares issued to parent (in shares) | 64,977,093 |
Recovered_Sheet5
Note 1 - Summary of Significant Accounting Policies: Oil & Gas Properties, Full Cost Method (Details) | Sep. 30, 2013 |
Details | ' |
Amortization Expense Per Physical Unit of Production | 0.35 |
Note_2_Oil_and_Gas_Properties_2
Note 2. Oil and Gas Properties (Details) (USD $) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2013 | Sep. 30, 2013 | |
Details | ' | ' |
Depletion | $23 | $101 |
Note_2_Oil_and_Gas_Properties_3
Note 2. Oil and Gas Properties: Oil and gas properties (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Oil and Gas Property, Full Cost Method, Gross | $97,866 | $8,400 |
Capitalized asset retirement costs | 1,966 | ' |
Oil and Gas Property, Full Cost Method, Depletion | -101 | ' |
Oil & gas properties | 97,765 | 8,400 |
Royalty interest in 700 acres in the Permian Basin | ' | ' |
Oil and Gas Property, Full Cost Method, Gross | 8,400 | 8,400 |
10% working interest in the Pierce Junction Field | ' | ' |
Oil and Gas Property, Full Cost Method, Gross | $87,500 | ' |
Note_2_Oil_and_Gas_Properties_4
Note 2. Oil and Gas Properties: Oil and gas properties, Schedule of Significant Acquisitions and Disposals (Details) (USD $) | 9 Months Ended | 191 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | |
Details | ' | ' | ' | ' |
Oil & gas properties | $97,765 | ' | $97,765 | $8,400 |
Payments for acquisition of oil & gas properties | 87,500 | ' | ' | ' |
Capitalized asset retirement costs | 1,966 | 0 | 1,966 | ' |
Oil and Gas Property, Full Cost Method, Gross | $97,866 | ' | $97,866 | $8,400 |
Note_3_Payables_Related_Party_
Note 3. Payables - Related Party (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Details | ' | ' |
Accounts Payable - related Party - American | $175,122 | $273,171 |
Accounts Payable - related Party - Daniel Dror II Trust of 2012 and Kemah Development Texas, L.P. | 131,100 | ' |
Accounts Payable - related Party - L. Rogers Hardy | ' | 8,571 |
Accounts Payable - related Party - Scott Gaille | ' | $3,456 |
Note_4_Equity_Details
Note 4. Equity (Details) (USD $) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Oct. 31, 2013 | Feb. 28, 2013 | Jan. 31, 2013 | Dec. 31, 1997 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Apr. 21, 2010 | |
Details | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued to related party (in shares) | ' | ' | ' | 64,977,093 | ' | ' | ' | ' | ' |
Shares issued to related party (in dollars) | ' | ' | ' | $1,000 | ' | ' | ' | ' | ' |
Common stock, shares authorized (in shares) | ' | ' | ' | ' | 200,000,000 | 200,000,000 | ' | ' | ' |
Preferred stock, shares authorized (in shares) | ' | ' | ' | ' | 10,000,000 | 10,000,000 | ' | ' | ' |
Common shares issued to parent (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 64,977,093 |
Common shares issued as dividend (in shares) | ' | ' | ' | ' | ' | ' | ' | 10,297,019 | ' |
Issuance of common shares for cash (in shares) | 5,525,063 | ' | ' | ' | 5,525,064 | ' | ' | 13,000,000 | ' |
Issuance of common shares for cash | 100,000 | ' | ' | ' | 100,000 | ' | ' | 22,100 | ' |
Issuance of common shares for services (in shares) | ' | ' | ' | ' | ' | 100,000 | 4,500,000 | 22,000,000 | ' |
Issuance of common shares for services | ' | ' | ' | ' | ' | 5,000 | 18,900 | 45,466 | ' |
American ownership of common stock (in shares) | ' | ' | ' | ' | ' | 65,346,390 | ' | ' | ' |
American ownership of common stock (percentage) | ' | ' | ' | ' | 53.00% | ' | ' | ' | ' |
Issuance of common shares for oil & gas properties (in shares) | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' |
Issuance of common shares for oil & gas properties | ' | ' | ' | ' | ' | ' | 8,400 | ' | ' |
Contingency for issuance of stock for oil & gas properties (in shares) | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' |
Rescission of contingency for issuance of stock for oil & gas properties (in shares) | ' | ' | ' | ' | ' | ' | -2,000,000 | ' | ' |
Oil & gas properties - unproved | ' | ' | ' | ' | ' | 8,400 | ' | ' | ' |
Treasury Stock, Value, Acquired, Cost Method | ' | ' | ' | ' | 884 | 1,101 | 611 | ' | ' |
Treasury Stock, Shares, Acquired | ' | ' | ' | ' | 26,000 | 12,000 | 151,472 | ' | ' |
Issuance of common shares to parent for services (in shares) | ' | ' | ' | ' | ' | ' | 4,000,000 | ' | ' |
Issuance of common shares to parent for services | ' | ' | ' | ' | ' | ' | 16,800 | ' | ' |
Stock Issued During Period, Shares, Issued for Noncash Consideration | ' | ' | 3,340,000 | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Value, Issued for Noncash Considerations | ' | ' | 267,171 | ' | ' | ' | ' | ' | ' |
Costs Incurred, Acquisition of Unproved Oil and Gas Properties | ' | $131,100 | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, Purchase of Assets | ' | 3,326,316 | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | ' | ' | ' | ' | 3,000,000 | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | ' | ' | ' | ' | $0.04 | ' | ' | ' | ' |
Note_4_Equity_Schedule_of_Shar1
Note 4. Equity: Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) (USD $) | 1 Months Ended |
Dec. 31, 2012 | |
Details | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 3,000,000 |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $0.04 |
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | '3 years |
Allocated Share-based Compensation Expense | $104,974 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $0.04 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used | 'Black-Scholes option-pricing model |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 423.12% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 0.75% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | '3 years |
Note_5_Subsequent_Events_Detai
Note 5 - Subsequent Events (Details) (USD $) | 1 Months Ended | 9 Months Ended | 12 Months Ended |
Oct. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2010 | |
Details | ' | ' | ' |
Issuance of common shares for cash | $100,000 | $100,000 | $22,100 |
Issuance of common shares for cash (in shares) | 5,525,063 | 5,525,064 | 13,000,000 |