Diversified Resources 10-Q 11 Sep 14 2014 Q3 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information (USD $)	9 Months Ended
	Jul. 31, 2014	Apr. 30, 2014
Document and Entity Information	'	'
Entity Registrant Name	'Diversified Resources Inc.	'
Document Type	'10-Q	'
Document Period End Date	31-Jul-14	'
Amendment Flag	'false	'
Entity Central Index Key	'0001509692	'
Current Fiscal Year End Date	'--10-31	'
Entity Common Stock, Shares Outstanding	'	18,445,867
Entity Public Float	'	$0
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	'2014	'
Document Fiscal Period Focus	'Q3	'

CONSOLIDATED_BALANCE_SHEETS_Un

CONSOLIDATED BALANCE SHEETS (Unaudited for July 31, 2014) (USD $)	Jul. 31, 2014		Oct. 31, 2013
CURRENT ASSETS	'		'
Cash	$112,112		$69,433
Accounts receivable, trade	30,255		32,378
Prepaid expenses	109,528		8,870
Total current assets	251,895		110,681
Property and Equipment	34,182	[1]	39,392	[2]
Oil and gas properties - proved (successful efforts method)	2,587,213	[3]	2,604,418	[4]
Oil and gas properties - proved undeveloped (successful efforts method)	64,126		64,126
Total assets	2,937,416		2,818,617
CURRENT LIABILITIES	'		'
Accounts payable	115,176		185,251
Accounts payable, related party	127,736		130,361
Current portion of long term debt	4,864		4,692
Notes payable	248,895		299,379
Accrued interest	3,946		2,411
Accrued interest, related party	1,880		3,872
Accrued expenses	113,974		109,193
Total current liabilities	616,471		735,159
LONG TERM LIABILITIES	'		'
Long term debt, related party	107,070		107,070
Long term debt	10,280		13,765
Asset retirement obligation	228,375		222,375
COMMITMENTS AND CONTINGENT LIABILITIES	'		'
STOCKHOLDERS' EQUITY	'		'
Common stock	20,020		14,563
Additional paid in capital	6,075,692		4,734,138
Accumulated deficit	-4,120,492		-3,008,453
Total stockholders' equity	1,975,220		1,740,248
Total liabilities and stockholders' equity	$2,937,416		$2,818,617
[1]	Net of accumulated depreciation of $10,457 in 2014.
[2]	Net of accumulated depreciation of $4,111 in 2013.
[3]	Net of accumulated depletion of $75,493 in 2014.
[4]	Net of accumulated depletion of $56,726 in 2013.

Statement_of_Financial_Positio

Statement of Financial Position - Parenthetical (USD $)	Jul. 31, 2014	Oct. 31, 2013
Statement of Financial Position	'	'
Preferred Stock, Par Value	$0.00	$0.00
Preferred Stock, Shares Authorized	50,000,000	50,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common Stock, Par Value	$0.00	$0.00
Common Stock, Shares Authorized	450,000,000	450,000,000
Common Stock, Shares Issued	20,019,874	14,563,150
Common Stock, Shares Outstanding	20,019,874	14,563,150

CONSOLIDATED_STATEMENTS_OF_OPE

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $)	3 Months Ended		9 Months Ended
	Jul. 31, 2014	Jul. 31, 2013	Jul. 31, 2014	Jul. 31, 2013
Operating revenues	'	'	'	'
Oil and gas sales	$46,352	$17,831	$68,992	$49,944
Operating expenses	'	'	'	'
Exploration costs, including dry holes	'	16,500	41,801	49,520
Lease operating expenses	84,205	101,046	206,223	137,576
General and administrative	335,287	247,772	850,909	362,876
Depreciation expense	3,820	1,216	11,178	3,184
Depletion expense	9,974	3,000	14,074	10,400
Accretion expense	2,000	5,200	6,000	15,600
Total operating expenses	435,286	374,734	1,130,185	579,156
(Loss) from operations	-388,934	-356,903	-1,061,193	-529,212
Other income (expense)	'	'	'	'
Loss on debt extinguishment	'	-330,638	'	-330,638
Loss on disposition of assets	'	'	'	-34,480
Interest expense	-7,245	-32,152	-50,846	-92,219
Other income (expense), net	-7,245	-362,790	-50,846	-457,337
Net (loss)	($396,179)	($719,693)	($1,112,039)	($986,549)
Net (loss) per common share - Basic and diluted	($0.02)	($0.05)	($0.06)	($0.07)
Weighted average shares outstanding - Basic and diluted	19,237,363	14,038,161	18,167,691	13,412,898

CONSOLIDATED_STATEMENTS_OF_CAS

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $)	9 Months Ended
	Jul. 31, 2014	Jul. 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:	'	'
Net cash (used in) operating activities	($1,299,731)	($555,602)
CASH FLOWS FROM INVESTING ACTIVITIES:	'	'
Proceeds from sale of assets	'	65,582
Cash paid for oil and gas properties	'	-57,424
Cash paid for purchase of property and equipment	-1,278	-17,826
Net cash (used in) investing activities	-1,278	-9,668
CASH FLOWS FROM FINANCING ACTIVITIES:	'	'
Proceeds from sale of common stock	1,347,000	691,937
Proceeds from notes payable	'	79,965
Payment on notes payable	-3,312	-33,105
Net cash provided by financing activities	1,343,688	738,797
INCREASE (DECREASE) IN CASH	42,679	173,527
BEGINNING BALANCE	69,433	1,051
ENDING BALANCE	112,112	174,578
Cash paid for interest	21,316	34,706
Supplemental schedule of non-cash investing and financing activities:	'	'
Conversion of preferred stock to common stock	'	49,992
Conversion of debt for common stock	'	395,877
Acquisition of vehicle with note	'	19,965
Issuance of common stock for Natural Resource Group, Inc. Common Stock	14,872	'
Forgiveness of related party notes	14,040	'
Assumption of liabilites by former officer and shareholder	$283,701	'

Note_1_Basis_of_Presentation

Note 1 - Basis of Presentation	9 Months Ended
	Jul. 31, 2014
Notes	'
Note 1 - Basis of Presentation	'
	NOTE 1 – BASIS OF PRESENTATION
	The interim consolidated financial statements of Diversified Resources, Inc. (“we”, “us”, “our”, “Diversified”, or the “Company”) are unaudited and contain all adjustments (consisting primarily of normal recurring accruals) necessary for a fair presentation of the results for the interim periods presented. Results for interim periods are not necessarily indicative of results to be expected for a full year or for previously reported periods due in part, but not limited to, interest rates, drilling risks, geological risks, the timing of acquisitions, and our ability to obtain additional capital. These interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in Diversified’s Annual Report on Form 10-K for the year ended October 31, 2013 as filed with the Securities and Exchange Commission (“SEC”) on February 13, 2014 and the Form 8-K/A filed May 29, 2014.  The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.
	The consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the SEC for Quarterly Reports on Form 10-Q and in accordance with US GAAP. Accordingly, these consolidated financial statements do not include all of the information and footnotes required by US GAAP for annual consolidated financial statements.
	Although, from a legal standpoint, we acquired Natural Resource Group, Inc. (“NRG”) on November 21, 2013, for financial reporting purposes the acquisition of NRG constituted a recapitalization, and the acquisition was accounted for as a reverse merger, whereby NRG was deemed to have acquired us.  Consequently, this report contains the historical financial statements of NRG for the three and nine months ended July 31, 2013.  From and after November 21, 2013, NRG’s financial statements have been consolidated with our financial statements.
	The consolidated financial statements are unaudited, but, in management's opinion, include all adjustments (which, unless otherwise noted, include only normal recurring adjustments) necessary for a fair presentation of such consolidated financial statements.

Note_2_Organization_and_Going_

Note 2 - Organization and Going Concern	9 Months Ended
	Jul. 31, 2014
Notes	'
Note 2 - Organization and Going Concern	'
	NOTE 2 – ORGANIZATION AND GOING CONCERN
	Diversified Resources Inc. (“the Company”) was incorporated in the State of Nevada on March 19, 2009 to pursue mineral extraction in the United States.
	Effective November 21, 2013 we acquired 100% of the outstanding shares of Natural Resource Group, Inc. in exchange for 14,872,157 shares of our common stock
	NRG was incorporated in Colorado in 2000 but was relatively inactive until December 2010.  In December 2010, NRG acquired oil and gas wells, leases and other properties from Energy Oil and Gas, Inc.
	The accompanying financial statements have been prepared assuming that the Company will continue as a going concern; however, the conditions below raise substantial doubt about the Company’s ability to do so. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. The Company sustained operating losses during the years ended October 31, 2013 and 2012 and during the nine months ended July 31, 2014 and 2013. As of July 31, 2014, the Company has a negative working capital in the amount of $364,576. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtaining additional financing from its shareholders or other sources, as may be required.
	Management’s plans include obtaining additional debt or equity financing to fund operations; however, there can be no assurance that management will be successful in its efforts to obtain additional funding.
	On June 15, 2009 the Company leased two mining claims in Esmerelda County, Nevada, in the Dunfee Mine Area.  The lease includes all additional claims within one mile of these claims.  The area was the subject of a geological report on September 11, 2009.  The term of the lease is 20 years and is renewable for an additional 20 years assuming all conditions of the lease are met. The lease was terminated on November 21, 2013 in connection with the acquisition of NRG.
	In November 2013, the Company entered into an agreement to exchange securities with Natural Resource Group, Inc (“NRG”), an oil and gas exploration company, whereby the shareholders of NRG received 14,872,157 shares of Diversified Resources, Inc.’s $0.001 par value common shares. The President sold 2,680,033 shares of the Company’s common stock to the Company for nominal consideration.  The shares purchased from the President were returned to the status of authorized but unissued shares. Additionally, the former principals of the Company assumed all of the debts of the Company at the date of the exchange. The exchange was consummated on November 21, 2013.

Note_3_Summary_of_Significant_

Note 3 - Summary of Significant Accounting Policies	9 Months Ended
	Jul. 31, 2014
Notes	'
Note 3 - Summary of Significant Accounting Policies	'
	NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
	Principles of Consolidation
	The accompanying consolidated unaudited financial statements include the accounts of Diversified Resources, Inc. and its wholly owned subsidiary, Natural Resource Group, Inc. Any inter-company accounts and transactions have been eliminated.
	Cash and cash equivalents
	The Company considers all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents.
	Use of estimates
	The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Estimates of oil and gas reserve quantities provide the basis for the calculation of depletion, depreciation, and amortization, and impairment, each of which represents a significant component of the financial statements.  Actual results could differ from those estimates.
	Revenue Recognition
	We recognize oil and gas revenue from interests in producing wells as the oil and gas is sold. Revenue from the purchase, transportation, and sale of natural gas is recognized upon completion of the sale and when transported volumes are delivered. We recognize revenue related to gas balancing agreements based on the sales method. Our net imbalance position at July 31, 2014 and 2013 was immaterial.
	Accounting for Oil and Gas Activities
	Successful Efforts Method   We account for crude oil and natural gas properties under the successful efforts method of accounting. Under this method, costs to acquire mineral interests in crude oil and natural gas properties, drill and equip exploratory wells that find proved reserves, and drill and equip development wells are capitalized. Capitalized costs of producing crude oil and natural gas properties, along with support equipment and facilities, are amortized to expense by the unit-of-production method based on proved crude oil and natural gas reserves on a field-by-field basis, as estimated by our qualified petroleum engineers. Upon sale or retirement of depreciable or depletable property, the cost and related accumulated depreciation, depletion and amortization amounts are eliminated from the accounts and the resulting gain or loss is recognized. Repairs and maintenance are expensed as incurred.
	Assets are grouped in accordance with the Extractive Industries - Oil and Gas Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). The basis for grouping is a reasonable aggregation of properties with a common geological structural feature or stratigraphic condition, such as a reservoir or field.
	Depreciation, depletion and amortization of the cost of proved oil and gas properties are calculated using the unit-of-production method. The reserve base used to calculate depreciation, depletion and amortization (“DD&A”) for leasehold acquisition costs and the cost to acquire proved properties is the sum of proved developed reserves and proved undeveloped reserves. With respect to lease and well equipment costs, which include development costs and successful exploration drilling costs, the reserve base includes only proved developed reserves. Estimated future dismantlement, restoration and abandonment costs, net of salvage values, are taken into account.
	Proved Property Impairment   We review individually significant proved oil and gas properties and other long-lived assets for impairment at least annually at year-end, or quarterly when events and circumstances indicate a decline in the recoverability of the carrying values of such properties, such as a negative revision of reserves estimates or sustained decrease in commodity prices. We estimate future cash flows expected in connection with the properties and compare such future cash flows to the carrying amount of the properties to determine if the carrying amount is recoverable. When the carrying amount of a property exceeds its estimated undiscounted future cash flows, the carrying amount is reduced to estimated fair value. Fair value may be estimated using comparable market data, a discounted cash flow method, or a combination of the two. In the discounted cash flow method, estimated future cash flows are based on management’s expectations for the future and include estimates of future oil and gas production, commodity prices based on published forward commodity price curves as of the date of the estimate, operating and development costs, and a risk-adjusted discount rate.
	Unproved Property Impairment   Our unproved properties consist of leasehold costs and allocated value to probable and possible reserves from acquisitions. We assess individually significant unproved properties for impairment on a quarterly basis and recognize a loss at the time of impairment by providing an impairment allowance. In determining whether a significant unproved property is impaired we consider numerous factors including, but not limited to, current exploration plans, favorable or unfavorable exploration activity on the property being evaluated and/or adjacent properties, our geologists' evaluation of the property, and the remaining months in the lease term for the property.
	Exploration Costs   Geological and geophysical costs, delay rentals, amortization of unproved leasehold costs, and costs to drill wells that do not find proved reserves are expensed as oil and gas exploration. We carry the costs of an exploratory well as an asset if the well finds a sufficient quantity of reserves to justify its capitalization as a producing well and as long as we are making sufficient progress assessing the reserves and the economic and operating viability of the project.  Geological and geophysical costs were $41,801 and $49,520 for the nine months ended July 31, 2014 and 2013, respectively, and are included in Exploration Costs in the accompanying financial statements.
	Asset Retirement Obligations   Asset retirement obligations (“ARO”) consist of estimated costs of dismantlement, removal, site reclamation and similar activities associated with our oil and gas properties. We recognize the fair value of a liability for an ARO in the period in which it is incurred when we have an existing legal obligation associated with the retirement of our oil and gas properties that can reasonably be estimated, with the associated asset retirement cost capitalized as part of the carrying cost of the oil and gas asset.  The asset retirement cost is determined at current costs and is inflated into future dollars using an inflation rate that is based on the consumer price index. The future projected cash flows are then discounted to their present value using a credit-adjusted risk-free rate. After initial recording, the liability is increased for the passage of time, with the increase being reflected as accretion expense and included in our DD&A expense in the statement of operations. Subsequent adjustments in the cost estimate are reflected in the liability and the amounts continue to be amortized over the useful life of the related long-lived asset.
	The following table reconciles the asset retirement obligation for nine months ended July 31, 2013 and year ended October 31, 2013:
		2014		2013
	Asset retirement obligation as of beginning of period	$	222,375	$	203,889
	Liabilities added		0		0
	Liabilities settled		0		0
	Revision of estimated obligation		0		0
	Accretion expense on discounted obligation		6,000		18,486
	Asset retirement obligation as of end of period	$	228,375	$	222,375
	Property and Equipment
	Property and equipment consists of production buildings, furniture, fixtures, equipment and vehicles which are recorded at cost and depreciated using the straight-line method over the estimated useful lives of five to fifteen years.
	Maintenance and repairs are charged to expense as incurred.
	Income Taxes
	We account for income taxes in accordance with Accounting Standards Codification (“ASC”) Topic 740, Income Taxes.  Under this standard, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using the enacted tax rates in effect for the year in which the differences are expected to reverse.  Deferred tax assets are reduced by a valuation allowance when we cannot make the determination that it is more likely than not that some portion or all of the related tax asset will be realized. Interest and penalties on tax deficiencies recognized in accordance with ACS accounting standards are classified as income taxes in accordance with ASC Topic 740-10-50-19.
	The Company follows ASC 740-10-05 Accounting for Uncertainty in Income Taxes. The Interpretation prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken on a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement.
	Contingent Liabilities
	The Company records contingent liabilities when the amounts were incurred and determinable otherwise the Company will disclose the matter(s) and provide a range or best estimate of the contingency in the notes to the financial statements. As of July 31, 2014 there were no legal proceedings against the Company. Neither the Company nor any of its officers or directors is involved in any other litigation either as plaintiffs or defendants, and have no knowledge of any threatened or pending litigation against them or any of the officers or directors. As of July 31, 2014, there were no contingent liabilities that required disclosure or accrual in the Company’s financial statements.
	Loss Per Share
	The Company computes net loss per share in accordance with ASC Topic 260, “Earnings per Share,” Under the provisions of the standard, basic and diluted net loss per share is computed by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. During periods when losses occur, common stock equivalents, if any, are not considered in the computation as their effect would be anti-dilutive.
	Recent Accounting Pronouncements
	In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Topic 606: Revenue from Contracts with Customers.  ASU No. 2014-09 is effective for the Company as of April 1, 2017.  Management is evaluating the effect, if any, this pronouncement will have on the Company’s consolidated financial statements.
	The Company does not believe that any other recently issued accounting pronouncements will have a material impact on its financial position, results of operations or cash flows.

Note_4_Participation_Agreement

Note 4 - Participation Agreement	9 Months Ended
	Jul. 31, 2014
Notes	'
Note 4 - Participation Agreement	'
	NOTE 4 – Participation Agreement
	In connection with the convertible promissory note described in Note 6, the Company entered into a participation agreement with a nonaffiliated company whereby the maker of the promissory note would advance up to $350,000 to conduct additional development of the underlying leases at the Garcia Field and drill and complete three additional wells on the acreage. During 2012, $250,000 was advanced to the Company. In consideration of making the promissory note, the lender was assigned a 1% overriding royalty interest in the 4,600 acre field and a 20% modified net profits interest in the existing four producing wells in the Garcia Field and a 20% modified net profits interest in three additional wells to be drilled on said acreage. The Company valued the net profits interest and the overriding royalty interest at $136,599 using 10% present value over the estimated life of the wells. The amount was recorded as a debt discount and is being amortized using the effective interest rate method over the life of the promissory note (3 years).
	Additionally, the lender has the right, at any point during the period of the note, to convert the remaining principal balance on the note to a working interest (see Note 6).
	The modified net profits interest is based on the gross proceeds from the sale of oil, gas and other minerals in the four producing wells in the Garcia Field and three additional wells to be drilled. The 20% is applied to 100% of the Company’s net revenue interest in the wells which cannot be less than 80% and is reduced by any of the following expenditures:
		any overriding royalties or other burden on production in excess of the 80% net revenue interest;
		production, severance and similar taxes assessed by any taxing authority based on volume or value of the production;
		direct costs incurred in producing oil or natural gas, or the operating or producing such wells excluding administrative, supervisory or other indirect costs;
		costs reasonably incurred to process the production for market;
		costs reasonably incurred in transportation, delivery, storage or marketing the production.

Note_5_Notes_Payable

Note 5 - Notes Payable	9 Months Ended
	Jul. 31, 2014
Notes	'
Note 5 - Notes Payable	'
	NOTE 5 – Notes Payable
	Notes Payable Affiliates—In December 2010, the Company entered into a purchase and sale agreement to acquire certain oil and gas assets located in Adams, Broomfield, Huerfano, Las Animas, Morgan and Weld Counties Colorado. The Company issued 2,500,000 shares of its $0.0001 par value Common Stock and a promissory note for $360,000 bearing interest at 10% with an original maturity date of March 1, 2011. The shares were valued at $1 per share based on sales of the Company’s common stock to third-parties. The promissory note is collateralized by the property and equipment transferred and was subsequently subrogated to a convertible promissory note on January 12, 2012.  On July 30, 2013, the maturity date of the note was extended to December 11, 2015.  The balance on the note is $107,070 at July 31, 2014 with interest accrued in the amount of $1,880.

Note_6_Long_Term_Debt

Note 6 - Long Term Debt	9 Months Ended
	Jul. 31, 2014
Notes	'
Note 6 - Long Term Debt	'
	NOTE 6 – Long Term Debt
	Convertible Promissory Note—On January 12, 2012 the Company entered into a convertible promissory note bearing interest at 10%, due January 11, 2014 which was extended to November 1, 2014.  The note is collateralized by a first priority deed of trust on approximately 4,600 acres of oil and gas leasehold interests in the Garcia Field together with the existing wells and equipment in the field. The terms provide for an initial draw of $150,000 with the potential for two subsequent draws of $100,000 each. The Company has drawn $250,000 on the facility and the balance at July 31, 2014 is $248,895. The lender has the right to convert the principal to a 10% working interest in the collateral as well as a 10% interest in all wells owned by the Company in the Garcia Field in which the lender does not have the 20% modified net profits interest described in note 4. In the event the principal is less than $350,000, the conversion shall be reduced proportionately.  The Company has the right to prepay the note without penalties or fees after giving the lender ten days’ notice of its intent. If lender does elect to convert within 10 days after receiving said notice, the conversion rights terminate.  The Company recorded a discount to the debt of $136,599 and recognized accretion of the discount in the amounts of $19,516 and $52,654 for the nine months ended July 31, 2014 and 2013 respectively and $0 and $19,467 for the three months ended July 31, 2014 and 2013 respectively. The Company reviewed the conversion feature for beneficial conversion features and embedded derivatives, and determined that neither applied.
	Convertible Promissory Note—On May 18, 2012 the Company borrowed $70,000 bearing interest at 10%, due May 31, 2014. The note was paid in full in June 2014.
	Installment Loan—the Company entered into an installment loan on July 4, 2013 bearing interest of 5.39%. The loan is payable in monthly installments of $464 over 48 months commencing August 4, 2013.  The loan is collateralized by a vehicle.
	The following summarizes the notes payable at:
		31-Jul-14		31-Oct-13
	Convertible promissory note	$	248,895	$	248,895
	Debt Discount, net of amortization		--		-19,516
	Convertible promissory note		--		70,000
	Installment loan		15,144		18,457
			264,039		317,836
	Current portion long term debt (Current portion of long term debt)		-4,864		-4,692
	Current portion promissory notes (Notes payable)		-248,895		-299,379
	Long term debt	$	10,280	$	13,765

Note_7_Income_Taxes

Note 7 - Income Taxes	9 Months Ended
	Jul. 31, 2014
Notes	'
Note 7 - Income Taxes	'
	NOTE 7 – INCOME TAXES
	No provision was made for federal income tax for the three and nine months ended July 31, 2014 and 2013, since the Company had net operating losses.

Note_8_Stockholders_Equity

Note 8 - Stockholders' Equity	9 Months Ended
	Jul. 31, 2014
Notes	'
Note 8 - Stockholders' Equity	'
	NOTE 8 – STOCKHOLDERS’ EQUITY
	The Company is authorized to issue 450,000,000 common shares of par value at $0.001 and 50,000,000 preferred shares of par value at $0.001. As of July 31, 2014, 20,019,874 shares of common stock and no preferred shares were issued and outstanding. During the nine months ended July 31, 2014, the Company sold 2,577,750 shares of its common stock for cash of $1,347,000.

Note_9_Related_Party_Transacti

Note 9 - Related Party Transactions	9 Months Ended
	Jul. 31, 2014
Notes	'
Note 9 - Related Party Transactions	'
	NOTE 9 – RELATED PARTY TRANSACTIONS
	During the year ended October 31, 2013, Philip F. Grey, the President loaned $14,040 to the Company.  The loan was payable on demand, carried no interest and had no maturity date.  Philip F. Grey forgave the loan as of November 21, 2013.
	Natural Resource Group, Inc. has an office lease for office space in Littleton, Colorado, with Spotswood Properties, LLC, a Colorado limited liability company (“Spotswood”), and an affiliate of the president, effective January 1, 2009, for a three-year term. Commencing July 1, 2010 the Company entered into a new lease for office space for a 3 year period ending July 1, 2013. The lease provides for the payment of $2,667 per month plus utilities and other incidentals. The president of the Company owns 50% of Spotswood. The Company is of the opinion that the terms of the lease are no less favorable than could be obtained from an unaffiliated party. Spotswood was paid $23,998 in the nine months ended July 31, 2014.  The Company has accrued liability in the amount of $13,333 for accrued rent.  Natural Resource Group, Inc. is currently leasing the office space on a month to month basis under the same terms and conditions as the lease that expired July 31, 2013.
	The Company paid a director and shareholder $53,700 and $132,650 in the three and nine months ended July 31, 2014, respectively and $45,730 in the three and nine months ended July 31, 2013, each, for financial public relations consulting.
	The Company paid the President’s brother $15,685 and $39,685 in the three and nine months ended July 31, 2014, respectively and $9,000 and $9,600 in the three and nine months ended July 31, 2013, respectively for landman consulting services.

Note_10_Commitments_and_Contin

Note 10 - Commitments and Contingencies	9 Months Ended
	Jul. 31, 2014
Notes	'
Note 10 - Commitments and Contingencies	'
	NOTE 10 – COMMITMENTS AND CONTINGENCIES
	Legal--We are subject to legal proceedings, claims and liabilities which arise in the ordinary course of business. We accrue for losses associated with legal claims when such losses are probable and can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. Legal fees are charged to expense as they are incurred.
	Environmental--We accrue for losses associated with environmental remediation obligations when such losses are probable and can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. Costs of future expenditures for environmental remediation obligations are not discounted to their present value. Recoveries of environmental remediation costs from other parties are recorded at their undiscounted value as assets when their receipt is deemed probable.
	Acquisition
	On June 6, 2014, the Company entered into an agreement, which was amended on August 11, 2014, to acquire all of the shares of an independent oil and gas company for cash of $6,000,000 and 900,000 restricted shares of the Company’s common stock.  The assets of the independent oil and gas company include:
		48 producing oil and gas wells, all of which will be operated by us after closing,
		leases covering approximately 10,400 gross and net acres, and
		miscellaneous equipment.
	If the acquisition is completed, we will have an average working interest of approximately 100% (80% net revenue interest) in the 48 producing wells and leases. The oil and gas properties are located in the Horseshoe-Gallup field in San Juan County, New Mexico.
	The closing of the transaction is subject to completion of title reviews and other conditions which are normal for a transaction of this nature. The Company has made a $100,000 deposit towards the purchase price as of July 31, 2014. The seller will retain this deposit if the transactions does not close by September 30, 2014, provided that the seller meets all of the other conditions required for closing.

Note_11_Subsequent_Events

Note 11 - Subsequent Events	9 Months Ended
	Jul. 31, 2014
Notes	'
Note 11 - Subsequent Events	'
	NOTE 11 – SUBSEQUENT EVENTS
	The Company sold 90,000 shares of its common stock for $90,000 in cash in August and September 2014.

Note_3_Summary_of_Significant_1

Note 3 - Summary of Significant Accounting Policies: Principles of Consolidation (Policies)	9 Months Ended
	Jul. 31, 2014
Policies	'
Principles of Consolidation	'
	Principles of Consolidation
	The accompanying consolidated unaudited financial statements include the accounts of Diversified Resources, Inc. and its wholly owned subsidiary, Natural Resource Group, Inc. Any inter-company accounts and transactions have been eliminated.

Note_3_Summary_of_Significant_2

Note 3 - Summary of Significant Accounting Policies: Cash and Cash Equivalents (Policies)	9 Months Ended
	Jul. 31, 2014
Policies	'
Cash and Cash Equivalents	'
	Cash and cash equivalents
	The Company considers all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents.

Note_3_Summary_of_Significant_3

Note 3 - Summary of Significant Accounting Policies: Use of Estimates (Policies)	9 Months Ended
	Jul. 31, 2014
Policies	'
Use of Estimates	'
	Use of estimates
	The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Estimates of oil and gas reserve quantities provide the basis for the calculation of depletion, depreciation, and amortization, and impairment, each of which represents a significant component of the financial statements.  Actual results could differ from those estimates.

Note_3_Summary_of_Significant_4

Note 3 - Summary of Significant Accounting Policies: Revenue Recognition (Policies)	9 Months Ended
	Jul. 31, 2014
Policies	'
Revenue Recognition	'
	Revenue Recognition
	We recognize oil and gas revenue from interests in producing wells as the oil and gas is sold. Revenue from the purchase, transportation, and sale of natural gas is recognized upon completion of the sale and when transported volumes are delivered. We recognize revenue related to gas balancing agreements based on the sales method. Our net imbalance position at July 31, 2014 and 2013 was immaterial.

Note_3_Summary_of_Significant_5

Note 3 - Summary of Significant Accounting Policies: Accounting For Oil and Gas Activities (Policies)	9 Months Ended
	Jul. 31, 2014
Policies	'
Accounting For Oil and Gas Activities	'
	Accounting for Oil and Gas Activities
	Successful Efforts Method   We account for crude oil and natural gas properties under the successful efforts method of accounting. Under this method, costs to acquire mineral interests in crude oil and natural gas properties, drill and equip exploratory wells that find proved reserves, and drill and equip development wells are capitalized. Capitalized costs of producing crude oil and natural gas properties, along with support equipment and facilities, are amortized to expense by the unit-of-production method based on proved crude oil and natural gas reserves on a field-by-field basis, as estimated by our qualified petroleum engineers. Upon sale or retirement of depreciable or depletable property, the cost and related accumulated depreciation, depletion and amortization amounts are eliminated from the accounts and the resulting gain or loss is recognized. Repairs and maintenance are expensed as incurred.
	Assets are grouped in accordance with the Extractive Industries - Oil and Gas Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). The basis for grouping is a reasonable aggregation of properties with a common geological structural feature or stratigraphic condition, such as a reservoir or field.
	Depreciation, depletion and amortization of the cost of proved oil and gas properties are calculated using the unit-of-production method. The reserve base used to calculate depreciation, depletion and amortization (“DD&A”) for leasehold acquisition costs and the cost to acquire proved properties is the sum of proved developed reserves and proved undeveloped reserves. With respect to lease and well equipment costs, which include development costs and successful exploration drilling costs, the reserve base includes only proved developed reserves. Estimated future dismantlement, restoration and abandonment costs, net of salvage values, are taken into account.
	Proved Property Impairment   We review individually significant proved oil and gas properties and other long-lived assets for impairment at least annually at year-end, or quarterly when events and circumstances indicate a decline in the recoverability of the carrying values of such properties, such as a negative revision of reserves estimates or sustained decrease in commodity prices. We estimate future cash flows expected in connection with the properties and compare such future cash flows to the carrying amount of the properties to determine if the carrying amount is recoverable. When the carrying amount of a property exceeds its estimated undiscounted future cash flows, the carrying amount is reduced to estimated fair value. Fair value may be estimated using comparable market data, a discounted cash flow method, or a combination of the two. In the discounted cash flow method, estimated future cash flows are based on management’s expectations for the future and include estimates of future oil and gas production, commodity prices based on published forward commodity price curves as of the date of the estimate, operating and development costs, and a risk-adjusted discount rate.
	Unproved Property Impairment   Our unproved properties consist of leasehold costs and allocated value to probable and possible reserves from acquisitions. We assess individually significant unproved properties for impairment on a quarterly basis and recognize a loss at the time of impairment by providing an impairment allowance. In determining whether a significant unproved property is impaired we consider numerous factors including, but not limited to, current exploration plans, favorable or unfavorable exploration activity on the property being evaluated and/or adjacent properties, our geologists' evaluation of the property, and the remaining months in the lease term for the property.
	Exploration Costs   Geological and geophysical costs, delay rentals, amortization of unproved leasehold costs, and costs to drill wells that do not find proved reserves are expensed as oil and gas exploration. We carry the costs of an exploratory well as an asset if the well finds a sufficient quantity of reserves to justify its capitalization as a producing well and as long as we are making sufficient progress assessing the reserves and the economic and operating viability of the project.  Geological and geophysical costs were $41,801 and $49,520 for the nine months ended July 31, 2014 and 2013, respectively, and are included in Exploration Costs in the accompanying financial statements.
	Asset Retirement Obligations   Asset retirement obligations (“ARO”) consist of estimated costs of dismantlement, removal, site reclamation and similar activities associated with our oil and gas properties. We recognize the fair value of a liability for an ARO in the period in which it is incurred when we have an existing legal obligation associated with the retirement of our oil and gas properties that can reasonably be estimated, with the associated asset retirement cost capitalized as part of the carrying cost of the oil and gas asset.  The asset retirement cost is determined at current costs and is inflated into future dollars using an inflation rate that is based on the consumer price index. The future projected cash flows are then discounted to their present value using a credit-adjusted risk-free rate. After initial recording, the liability is increased for the passage of time, with the increase being reflected as accretion expense and included in our DD&A expense in the statement of operations. Subsequent adjustments in the cost estimate are reflected in the liability and the amounts continue to be amortized over the useful life of the related long-lived asset.
	The following table reconciles the asset retirement obligation for nine months ended July 31, 2013 and year ended October 31, 2013:
		2014		2013
	Asset retirement obligation as of beginning of period	$	222,375	$	203,889
	Liabilities added		0		0
	Liabilities settled		0		0
	Revision of estimated obligation		0		0
	Accretion expense on discounted obligation		6,000		18,486
	Asset retirement obligation as of end of period	$	228,375	$	222,375

Note_3_Summary_of_Significant_6

Note 3 - Summary of Significant Accounting Policies: Property and Equipment (Policies)	9 Months Ended
	Jul. 31, 2014
Policies	'
Property and Equipment	'
	Property and Equipment
	Property and equipment consists of production buildings, furniture, fixtures, equipment and vehicles which are recorded at cost and depreciated using the straight-line method over the estimated useful lives of five to fifteen years.
	Maintenance and repairs are charged to expense as incurred.

Note_3_Summary_of_Significant_7

Note 3 - Summary of Significant Accounting Policies: Income Taxes (Policies)	9 Months Ended
	Jul. 31, 2014
Policies	'
Income Taxes	'
	Income Taxes
	We account for income taxes in accordance with Accounting Standards Codification (“ASC”) Topic 740, Income Taxes.  Under this standard, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using the enacted tax rates in effect for the year in which the differences are expected to reverse.  Deferred tax assets are reduced by a valuation allowance when we cannot make the determination that it is more likely than not that some portion or all of the related tax asset will be realized. Interest and penalties on tax deficiencies recognized in accordance with ACS accounting standards are classified as income taxes in accordance with ASC Topic 740-10-50-19.
	The Company follows ASC 740-10-05 Accounting for Uncertainty in Income Taxes. The Interpretation prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken on a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement.

Note_3_Summary_of_Significant_8

Note 3 - Summary of Significant Accounting Policies: Contingent Liabilities (Policies)	9 Months Ended
	Jul. 31, 2014
Policies	'
Contingent Liabilities	'
	Contingent Liabilities
	The Company records contingent liabilities when the amounts were incurred and determinable otherwise the Company will disclose the matter(s) and provide a range or best estimate of the contingency in the notes to the financial statements. As of July 31, 2014 there were no legal proceedings against the Company. Neither the Company nor any of its officers or directors is involved in any other litigation either as plaintiffs or defendants, and have no knowledge of any threatened or pending litigation against them or any of the officers or directors. As of July 31, 2014, there were no contingent liabilities that required disclosure or accrual in the Company’s financial statements.

Note_3_Summary_of_Significant_9

Note 3 - Summary of Significant Accounting Policies: Loss Per Share (Policies)	9 Months Ended
	Jul. 31, 2014
Policies	'
Loss Per Share	'
	Loss Per Share
	The Company computes net loss per share in accordance with ASC Topic 260, “Earnings per Share,” Under the provisions of the standard, basic and diluted net loss per share is computed by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. During periods when losses occur, common stock equivalents, if any, are not considered in the computation as their effect would be anti-dilutive.

Recovered_Sheet1

Note 3 - Summary of Significant Accounting Policies: Recent Accounting Pronouncements (Policies)	9 Months Ended
	Jul. 31, 2014
Policies	'
Recent Accounting Pronouncements	'
	Recent Accounting Pronouncements
	In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Topic 606: Revenue from Contracts with Customers.  ASU No. 2014-09 is effective for the Company as of April 1, 2017.  Management is evaluating the effect, if any, this pronouncement will have on the Company’s consolidated financial statements.
	The Company does not believe that any other recently issued accounting pronouncements will have a material impact on its financial position, results of operations or cash flows.

Recovered_Sheet2

Note 3 - Summary of Significant Accounting Policies: Accounting For Oil and Gas Activities: Schedule of Asset Retirement Obligations (Tables)	9 Months Ended
	Jul. 31, 2014
Tables/Schedules	'
Schedule of Asset Retirement Obligations	'
		2014		2013
	Asset retirement obligation as of beginning of period	$	222,375	$	203,889
	Liabilities added		0		0
	Liabilities settled		0		0
	Revision of estimated obligation		0		0
	Accretion expense on discounted obligation		6,000		18,486
	Asset retirement obligation as of end of period	$	228,375	$	222,375

Note_6_Long_Term_Debt_The_Foll

Note 6 - Long Term Debt: The Following Summarizes The Notes Payable At (Tables)	9 Months Ended
	Jul. 31, 2014
Tables/Schedules	'
The Following Summarizes The Notes Payable At:	'
	The following summarizes the notes payable at:
		31-Jul-14		31-Oct-13
	Convertible promissory note	$	248,895	$	248,895
	Debt Discount, net of amortization		--		-19,516
	Convertible promissory note		--		70,000
	Installment loan		15,144		18,457
			264,039		317,836
	Current portion long term debt (Current portion of long term debt)		-4,864		-4,692
	Current portion promissory notes (Notes payable)		-248,895		-299,379
	Long term debt	$	10,280	$	13,765

Note_2_Organization_and_Going_1

Note 2 - Organization and Going Concern (Details) (USD $)	Jul. 31, 2014
Details	'
Capital	$364,576

Note_5_Notes_Payable_Details

Note 5 - Notes Payable (Details) (USD $)	Jul. 31, 2014	Oct. 31, 2013
Details	'	'
Long term debt, related party	$107,070	$107,070
Accrued interest, related party	$1,880	$3,872

Note_6_Long_Term_Debt_Details

Note 6 - Long Term Debt (Details) (USD $)	3 Months Ended		9 Months Ended
	Jul. 31, 2014	Jul. 31, 2013	Jul. 31, 2014	Jul. 31, 2013	Oct. 31, 2013
Details	'	'	'	'	'
Notes payable	$248,895	'	$248,895	'	$299,379
Debt Instrument, Unamortized Discount	136,599	'	136,599	'	'
Accretion of Discount	$0	$19,467	$19,516	$52,654	'

Note_6_Long_Term_Debt_The_Foll1

Note 6 - Long Term Debt: The Following Summarizes The Notes Payable At (Details) (USD $)	Jul. 31, 2014	Oct. 31, 2013
Details	'	'
Current portion of long term debt	($4,864)	($4,692)
Notes payable	($248,895)	($299,379)

Note_8_Stockholders_Equity_Det

Note 8 - Stockholders' Equity (Details) (USD $)	9 Months Ended
	Jul. 31, 2014	Oct. 31, 2013
Details	'	'
Common Stock, Shares Authorized	450,000,000	450,000,000
Common Stock, Par Value	$0.00	$0.00
Preferred Stock, Shares Authorized	50,000,000	50,000,000
Preferred Stock, No Par Value	$0.00	'
Common Stock, Shares Issued	20,019,874	14,563,150
Development Stage Entities, Stock Issued, Shares, Issued for Cash	2,577,750	'
Development Stage Entities, Stock Issued, Value, Issued for Cash	$1,347,000	'

Note_9_Related_Party_Transacti1

Note 9 - Related Party Transactions (Details) (USD $)	0 Months Ended	3 Months Ended		9 Months Ended
	Jul. 31, 2014	Jul. 31, 2014	Jul. 31, 2013	Jul. 31, 2014	Jul. 31, 2013
Details	'	'	'	'	'
Payments to Suppliers	'	'	'	$23,998	'
Accrued Rent, Current	13,333	13,333	'	13,333	'
Cost of Services	53,700	53,700	'	132,650	45,730
Cost of Services, Oil and Gas	'	$15,685	$9,000	$39,685	$9,600

Note_10_Commitments_and_Contin1

Note 10 - Commitments and Contingencies (Details) (USD $)	Jul. 31, 2014
Details	'
Earnest Money Deposits	$100,000