North American Oil & Gas (NAMG) 10-Q 12 Nov 13 2013 Q3 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	9 Months Ended
	Sep. 30, 2013
Document And Entity Information	'
Entity Registrant Name	'NORTH AMERICAN OIL & GAS CORP.
Entity Central Index Key	'0001515635
Document Type	'10-Q
Document Period End Date	30-Sep-13
Amendment Flag	'false
Current Fiscal Year End Date	'--12-31
Is Entity a Well-known Seasoned Issuer?	'No
Is Entity a Voluntary Filer?	'No
Is Entity's Reporting Status Current?	'Yes
Entity Filer Category	'Smaller Reporting Company
Entity Common Stock, Shares Outstanding	60,606,250
Document Fiscal Period Focus	'Q3
Document Fiscal Year Focus	'2013

CONSOLIDATED_BALANCE_SHEETS_Un

CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Current Assets	'	'
Cash and Cash Equivalents	$5,440	$578,928
Restricted Cash	21,058	937,067
Accounts Receivable	329	4,770
Prepaid Expenses	414	4,140
Total Current Assets	27,241	1,524,905
Oil and Gas Properties, Successful Efforts method, Net	470,538	278,754
Furniture, Fixtures, and Equipment, Net	5,915	4,685
Deposits	21,300	21,300
Total Non-current Assets	497,753	304,740
TOTAL ASSETS	524,994	1,829,645
Current Liabilities	'	'
Accounts Payable	179,547	608,550
Accounts Payable - Related Party	207,051	60,000
Advance from Working Interest Owner	85,779	736,991
Other Current Liabilities	129,676	'
Note Payable - Related party	50,000	50,000
Total Current Liabilities	652,053	1,455,542
Long-term Liabilities	'	'
Asset Retirement Obligation	101,778	62,029
Total Liabilities	753,831	1,517,571
Shareholders' Equity (Deficit)	'	'
Common Stock: $0.001 par value; 200,000,000 shares authorized; 60,606,250 shares issued and outstanding, respectively	60,606	60,125
Preferred Stock; 25,000,000 authorized; zero issued	'	'
Additional paid-in capital	1,326,808	654,155
(Deficit) Accumulated During the Development Stage	-1,616,251	-402,206
Total Shareholders' Equity (Deficit)	-228,837	312,074
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)	$524,994	$1,829,645

CONSOLIDATED_BALANCE_SHEETS_Un1

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Consolidated Balance Sheets Parenthetical	'	'
Common Stock, Par Value	$0.00	$0.00
Common Stock, Shares Authorized	200,000,000	200,000,000
Common Stock, Shares Issued	60,606,250	60,606,250
Common Stock, Shares Outstanding	60,606,250	60,606,250
Preferred Stock, Shares Authorized	25,000,000	25,000,000
Preferred Stock, Shares Issued	0	0

CONSOLIDATED_STATEMENTS_OF_OPE

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $)	3 Months Ended		9 Months Ended		27 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013
Consolidated Statements Of Operations	'	'	'	'	'
Total Revenue	'	'	'	'	'
Expenses	'	'	'	'	'
Exploration & Leasehold Costs	19,409	66,043	429,611	79,739	628,045
Management and Consulting	7,000	250	61,980	3,250	163,754
General and Administration	138,927	34,825	707,973	52,254	930,265
Depreciation	39	171	117	228	2,043
Accretion on Asset Retirement Obligation	3,991	'	7,114	'	7,736
Total Expenses	169,366	101,289	1,206,795	135,471	1,731,843
Other Income (Expense)	'	'	'	'	'
Other Expenses	-1,600	-800	-7,250	-800	-7,884
Gain on Sale of Oil and Gas Properties	'	50,503	'	50,503	123,476
Total Other Income (Expense)	-1,600	49,703	-7,250	49,703	115,593
Net (Loss)	($170,996)	($51,586)	($1,214,045)	($85,768)	($1,616,251)
(Loss) per common share	$0	$0	($0.02)	$0	($0.03)
Weighted average number of shares outstanding	60,468,682	2,430,000	60,294,299	2,430,000	50,288,989

CONSOLIDATED_STATEMENTS_OF_CAS

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $)	9 Months Ended		27 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013
Cash Flows from Operating Activities:	'	'	'
Net (Loss)	($1,214,045)	($85,768)	($1,616,251)
Adjustments to Reconcile Net (Loss) to Net Cash (Used in) Operating Activities:	'	'	'
Depreciation expense	116	228	2,043
Accretion expense	7,114	'	7,736
(Gain) on sale of oil & gas properties	'	'	-123,476
Stock based compensation	448,114	'	528,331
Changes in Assets and Liabilities:	'	'	'
(Increase)/Decrease in accounts receivable	4,441	'	-329
(Increase)/ Decrease in prepaid and other assets	3,726	1,454	-21,714
Increase/ (Decrease) in accrued expenses	129,676	-144,547	129,676
Increase/(Decrease) in accounts payable	-429,004	-38,685	103,241
Increase/(Decrease) in accounts payable - related party	147,051	'	207,051
Net Cash (Used in) Operating Activities	-902,811	-267,318	-783,692
Cash Flows from Investing Activities:	'	'	'
(Purchase) of oil and gas property	-810,363	-1,589	-1,936,646
Proceeds from the sale of oil & gas properties	'	104,587	200,000
(Purchase) of furniture, fixtures and equipment	-1,343	-5,010	-7,958
Restricted Cash	916,009	'	-21,058
Net Cash Provided by (Used in) Investing Activities	104,303	97,988	-1,765,662
Cash Flows from Financing Activities:	'	'	'
Proceeds from the sale of common stock	225,020	'	725,100
Contributions	'	166,700	213,874
(Distributions)	'	-109,180	-134,180
Advances from working interest owner	'	300,000	1,700,000
Proceeds from related party notes	'	50,000	50,000
Net Cash Provided by (Used in) Financing Activities	225,020	407,520	2,554,794
Net Increase (Decrease) in Cash and Cash Equivalents	-573,487	238,189	5,440
Cash and Cash Equivalents at the Beginning of the Period	578,927	34,911	'
Cash and Cash Equivalents at the End of the Period	5,440	273,100	5,440
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS	'	'	'
Recovery of Oil and Gas Property	75,117	'	75,117
Asset Retirment Obligation	($32,635)	'	($94,042)

THE_COMPANY_AND_SUMMARY_OF_SIG

THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
Note 1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	'
	North American Oil & Gas Corp. (hereinafter referred to as the “Company”) was incorporated in the State of Nevada on April 7, 2010. Since November 16, 2012, the Company has been engaged in the exploration and development of oil and natural gas. The Company is considered a development stage exploration company in accordance with Financial Accounting Standards Board (“FASB”) and Accounting Standards Codification (“ASC”) No. 915, “Development Stage Entities”.
	The accompanying unaudited condensed interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the year ended December 31, 2012 filed with the SEC on March 29, 2013. 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.
	Reclassification of Prior Period Statements
	Certain reclassifications of prior period consolidated financial statement balances have been made to conform to current reporting practices.
	Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited consolidated financial statements as reported in the 2012 annual report on Form 10-K have been omitted.

GOING_CONCERN

GOING CONCERN	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
Note 2. GOING CONCERN	'
	The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs, which indicates a substantial doubt of its ability to continue as a going concern. The company accumulated losses of $1,616,251from Inception through September 30, 2013. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease development of operations.
	Recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to raise additional capital, obtain financing, and succeed in its future operations. If the Company is unable to become profitable, the Company could be forced to discontinue operations.
	The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts.

RELATED_PARTY_TRANSACTIONS

RELATED PARTY TRANSACTIONS	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
Note 3. RELATED PARTY TRANSACTIONS	'
	The Company entered into a short-term loan with ASPS Energy Investments, Ltd., on September 7, 2012, for the principal sum of $50,000, with interest rate of 3%. The note was payable on September 6, 2013, when the outstanding amount of principal and interest was due in full. The Company is negotiating with ASPS Energy Investments, Ltd. to extend the due date on this loan for three (3) months.
	On November 13, 2012, the Company entered into a Farm-In agreement with Avere Energy Corp (“Avere”), a wholly owned subsidiary of East West Petroleum Corp. According to the provisions of the agreement, Avere was to fund $300,000 for overhead, which was funded at 100% as of May 1, 2013. The Company shall return this funding to Avere from future production revenues or from investments from third parties, minus any realized overhead per the Joint Operating Agreement, whichever comes first.  At September 30, 2013 the Company has realized overhead costs per the JOA in the amount of $92,949 thereby reducing the loan to $207,051.
	Additionally, Avere has provided $1,300,000 to finance the drilling of Well 77-20 in exchange for a 25% working interest in the Tejon Extension. Well 77-20 has been drilled, and is currently shut in while reviewing additional testing possibilities.
	Through the Farm-In agreement Avere is to fund $347,500 in total to acquire the White Wolf Prospect in exchange for a 50% working interest. As of September 30, 2013 Lani secured 4,663 gross acres, 2,239 net acres, at an average cost per net acre of $135.18. The total costs for the White Wolf leasing acquisition program to date is $365,904, with $88,904 expended for delay rents, and $277,000 expended in brokerage fees.
	On February 1, 2013, the Company entered into a consulting contract with a Board Director, Cosimo Damiano. The consulting contract is for twelve months at a rate of $5,000 per month, and covers a variety of consulting activities in the management and operations of the Company. For the nine (9) month period ending September 30, 2013 the Company incurred consulting fees totaling $20,000, $10,000 of which is included in accounts payable as of September 30, 2013, with eight (8) months remaining on this contract as of September 30, 2013.
	On April 1, 2013 Donald Boyd, Operations Manager, and Robert Skerry Hoar, Managing Geologist, agreed to termination or services as full time employees, and signed Consulting Agreement contracts with the Company this same date. The contracts stipulate $5,000 per month fixed compensation for consulting services in the ongoing operations of Lani.

ASSET_RETIREMENT_OBLIGATION

ASSET RETIREMENT OBLIGATION	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
Note 4. ASSET RETIREMENT OBLIGATION	'
	The following table summarizes the change in the asset retirement obligation (“ARO”) for nine (9) months ended September 30, 2013 and 2012.
		September 30,		September 30,
		2013		2012
	Asset retirement obligation, beginning of period	$	62,029	$	-
	Adjustments to Original ARO Asset		30,619		-
	Liabilities incurred from acquisitions		2,016		-
	Accretion expenses		7,114		-
	Asset retirement obligation, end of period	$	101,778	$	-
	The ARO reflects the estimated present value of the amount of dismantlement, removal, site reclamation and similar activities associated with the Company’s oil and gas properties. Inherent in the fair value calculation of the ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlement, and changes in the legal, regulatory, environmental and political environments. To the extent future revisions to these assumptions impact the fair value of the existing ARO liability, a corresponding adjustment is made to the oil and gas property balance. The ARO is calculated for Well 77-20, based on a cost to plug and abandon the well at $150,000. The ARO has been calculated using the Company’s share at 75% of the working interest in the leased property. An adjustment to the ARO Asset estimate was made in 2013 adding $30,619 to the original estimate. An additional $2,016 in ARO asset and liability was recognized due to acquisitions made during the period.

COMMON_STOCK

COMMON STOCK	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
Note 5. COMMON STOCK	'
	The company issued 200,000 shares of common stock to Gregory Renwick, Director, for $20.00. On August 14, 2013, the Company issued 281,250 shares of common stock to Springhouse Investments Corp., a Canadian corporation, for $225,000.

STOCK_OPTIONS

STOCK OPTIONS	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
Note 6. STOCK OPTIONS	'
	The Company awarded Linda Gassaway, Chief Financial Officer, 500,000 shares of stock options on April 1, 2013. The restricted stock options were offered at an exercise price of $.80 per share, and will vest one year from date of grant.
	The fair value of the option grants were estimated on the date of the grant using the Black-Scholes option-pricing model with the following weighted average assumptions: expected volatility of 665%, risk free interest rate of 0.78%; and expected term of five and one half years.
	A summary of the Company’s stock option activity and related information is as follows:
	NORTH AMERICAN OIL & GAS CORP.
	Options Outstanding
		Number of Shares			Weighted-		Weighted
					Average		Average Exercise Price
					Remaining Life
					(in years)
	Outstanding at January 1, 2013
	Granted(1)		850,000			5	$	0.76
	Exercised		-					-
	Cancelled/Expired		-					-
	Outstanding at September 30, 2013		850,000					-
	Vested and Exercisable at June 30, 2013		350,000				$	0.7
	(1) Includes 350,000 options granted to PacSeis February 18, 2013, and options granted to Linda Gassaway, Chief Financial Officer of NAMG April 1, 2013
	The following table presents the weighted-average assumptions used to estimate the fair values of the stock options granted in the period presented:
		Nine Months Ended September 30, 2013 (unaudited)			Year Ended December 31, 2012
	Risk-free interest rate(1)		0.78			-
	Expected life (in years)(2)		5			-
	Expected volatility(3)		665.24	%		-
	Dividend yield		-			-
	Weighted-average estimated fair value of options granted during the period		0.76			-
	(1) The Risk Free Rate is a 5 Year Treasury rate.
	(2) The expected life (in years) is based on the simplified method: Expected term =(vesting term + original contractual term)/2).
	(3) The expected volatility is based on the volatility weighted average of stock options
	During the nine months ended September 30, 2013, the Company recorded stock-based compensation of $235,550 and $188,113, respectively, as general and administrative expenses, and G & G Services. At September 30, 2013 the weighted average remaining life of the stock options is 5.00 years. The unamortized amount of stock-based compensation at September 30, 2013 is $184,179. This cost will be recognized over the next two fiscal quarters.

SUBSEQUENT_EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
Note 7. SUBSEQUENT EVENTS	'
	On October 16, 2013, the Company entered into a Stock Purchase Agreement with Oel und Erdgazforshung AG, a German Corporation, for the sale and issuance of 246,914 shares of the Company’s common stock for a purchase price of $200,000, and warrants to purchase an aggregate of 96,618 shares of Common Stock, at an exercise price of $1.04 per share. The Warrants are exercisable immediately and expire October 10, 2016.

ASSET_RETIREMENT_OBLIGATION_Ta

ASSET RETIREMENT OBLIGATION (Tables)	9 Months Ended
	Sep. 30, 2013
Asset Retirement Obligation Tables	'
Asset retirement obligations	'
	The following table summarizes the change in the asset retirement obligation (“ARO”) for nine (9) months ended September 30, 2013 and 2012.
		September 30,		September 30,
		2013		2012
	Asset retirement obligation, beginning of period	$	62,029	$	-
	Adjustments to Original ARO Asset		30,619		-
	Liabilities incurred from acquisitions		2,016		-
	Accretion expenses		7,114		-
	Asset retirement obligation, end of period	$	101,778	$	-

STOCK_OPTIONS_Tables

STOCK OPTIONS (Tables)	9 Months Ended
	Sep. 30, 2013
Stock Options Tables	'
Stock option activity	'
	A summary of the Company’s stock option activity and related information is as follows:
	NORTH AMERICAN OIL & GAS CORP.
	Options Outstanding
		Number of Shares			Weighted-		Weighted
					Average		Average Exercise Price
					Remaining Life
					(in years)
	Outstanding at January 1, 2013
	Granted(1)		850,000			5	$	0.76
	Exercised		-					-
	Cancelled/Expired		-					-
	Outstanding at September 30, 2013		850,000					-
	Vested and Exercisable at June 30, 2013		350,000				$	0.7
	(1) Includes 350,000 options granted to PacSeis February 18, 2013, and options granted to Linda Gassaway, Chief Financial Officer of NAMG April 1, 2013
Weighted-average assumptions	'
	The following table presents the weighted-average assumptions used to estimate the fair values of the stock options granted in the period presented:
		Nine Months Ended September 30, 2013 (unaudited)			Year Ended December 31, 2012
	Risk-free interest rate(1)		0.78			-
	Expected life (in years)(2)		5			-
	Expected volatility(3)		665.24	%		-
	Dividend yield		-			-
	Weighted-average estimated fair value of options granted during the period		0.76			-
	(1) The Risk Free Rate is a 5 Year Treasury rate.
	(2) The expected life (in years) is based on the simplified method: Expected term =(vesting term + original contractual term)/2).
	(3) The expected volatility is based on the volatility weighted average of stock options

GOING_CONCERN_Details_Narrativ

GOING CONCERN (Details Narrative) (USD $)	3 Months Ended		9 Months Ended		27 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013
Going Concern Details Narrative	'	'	'	'	'
Net (Loss)	$170,996	$51,586	$1,214,045	$85,768	$1,616,251

RELATED_PARTY_TRANSACTIONS_Det

RELATED PARTY TRANSACTIONS (Details Narrative) (USD $)	9 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
	acre
Related Party Transactions Details Narrative	'	'
Realized overhead costs per the JOA	$92,949	$60,000
Related Party Transaction Reduced Loan	207,051	'
Additional funding	1,300,000	'
Total funding	347,500	'
Gross acres	4,663	'
Net acres	2,239	'
Cost per net acre	135.18	'
White Wolf leasing acquisition	365,904	'
Delay rents	88,904	'
Brokerage fees	277,000	'
Consulting expenses	20,000	'
Consulting expenses amount included in accounts payable	$10,000	'

ASSET_RETIREMENT_OBLIGATION_De

ASSET RETIREMENT OBLIGATION (Details) (USD $)	9 Months Ended		27 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013
Asset Retirement Obligation Details	'	'	'
Asset retirement obligation, beginning of period	$62,029	$0	'
Adjustments to Original ARO Asset	30,619	0	'
Liabilities incurred from acquisitions	2,016	0	'
Accretion expense	7,114	'	7,736
Asset retirement obligation, end of period	$101,778	$0	$101,778

STOCK_OPTIONS_Details

STOCK OPTIONS (Details) (USD $)	9 Months Ended
	Sep. 30, 2013
Stock Options Details	'
Outstanding at January 1, 2013, Number of Options	0
Granted, Number of Options	850,000
Exercised, Number of Options	0
Cancelled/Expired, Number of Options	0
Outstanding at September 30, 2013, Number of Options	850,000
Vested and Exercisable at June 30, 2013, Number of Options	350,000
Outstanding at January 1, 2013, Weighted Average Remaining Contractual Life (in years)	'0 years
Weighted Average Remaining Contractual Life (in years) Granted	'5 years
Weighted Average Remaining Contractual Life (in years) Exercised	'0 years
Weighted Average Remaining Contractual Life (in years) Cancelled/Expired	'0 years
Outstanding at June 30, 2013, Weighted Average Remaining Contractual Life (in years)	'0 years
Outstanding at January 1, 2013, Weighted Average Exercise Price	$0
Granted, Weighted Average Exercise Price	$0.76
Exercised, Weighted Average Exercise Price	$0
Cancelled/Expired, Weighted Average Exercise Price	$0
Outstanding at September 30, 2013, Weighted Average Exercise Price	$0
Vested and Exercisable at June 30, 2013, Weighted Average Exercise Price	$0.70

STOCK_OPTIONS_Details_1

STOCK OPTIONS (Details 1) (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Stock Options Details 1	'	'
Risk-free interest rate	78.00%	'
Expected life (in years)	'5 years	'0 years
Expected volatility	665.24%	'
Dividend yield	'	'
Weighted-average estimated fair value of options granted during the period	$0.76	'

STOCK_OPTIONS_Details_Narrativ

STOCK OPTIONS (Details Narrative) (USD $)	9 Months Ended
	Sep. 30, 2013
Stock Options Details Narrative	'
Stock-based compensation	$235,550
General and administrative expenses	0
weighted average remaining life of the stock options	'5 years
Unamortized amount of stock-based compensation	$184,179