Brushy Resources 10-Q 23 May 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 19, 2016
Document And Entity Information
Entity Registrant Name	BRUSHY RESOURCES, INC.
Entity Central Index Key	1,554,970
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
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		12,711,986
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,016

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets
Cash	$ 864	$ 2,839
Trade receivable	785	1,101
Joint interest receivable	162	172
Current derivative asset	0	733
Prepaid expenses	124	59
Total current assets	1,935	4,904
Oil and natural gas properties and other equipment
Oil and natural gas properties, successful efforts method, net of accumulated depletion and impairment	16,366	16,884
Other property and equipment, net of depreciation	63	67
Total oil and natural gas properties and other equipment, net	16,429	16,951
Other assets
Goodwill	960	960
Other	359	359
Total other assets	1,319	1,319
Total assets	19,683	23,174
Current liabilities
Accounts payable and accrued liabilities	4,728	5,564
Going public delay fee	738	738
Joint interest revenues payable	1,025	1,018
Current maturities of related party notes payable	21,718	20,892
Current maturities of notes payable	13,743	14,172
Current asset retirement obligations	400	392
Total current liabilities	42,352	42,776
Long-term liabilities
Asset retirement obligations	3,260	3,204
Other long-term liabilities	30	35
Total long-term liabilities	$ 3,290	$ 3,239
Commitments and contingencies
Stockholders' deficit
Preferred stock, $.001 par value, authorized 10,000,000 shares; none issued and outstanding	$ 0	$ 0
Common stock, $.001 par value, authorized 150,000,000 shares; 12,711,986 shares issued at March 31, 2016 and December 31, 2015	13	13
Additional Paid-in capital	57,251	57,044
Accumulated deficit	(83,223)	(79,898)
Total stockholders' deficit	(25,959)	(22,841)
Total liabilities and stockholders' deficit	$ 19,683	$ 23,174

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Stockholders' deficit
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
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)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	150,000,000	150,000,000
Common stock, shares issued (in shares)	12,711,986	12,711,986

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) [Abstract]
Oil, natural gas, and related product sales	$ 1,232	$ 2,757
Expenses
Depreciation and depletion	718	2,507
Lease operating	908	1,126
General and administrative	684	1,342
Professional fees	674	211
Production taxes	59	103
Accretion of discount on asset retirement obligation	63	63
Exploration	0	21
Total expenses	3,106	5,373
Operating loss	(1,874)	(2,616)
Other expenses
Interest	(1,100)	(773)
Realized gain from derivative contracts	732	616
Change in fair value of derivative contracts	(733)	(202)
Loss on sales of assets	0	(2)
Settlement expense	(350)	0
Total other expense	(1,451)	(361)
Loss before income taxes	(3,325)	(2,977)
Deferred income taxes	0	288
Net loss	$ (3,325)	$ (2,689)
Net loss per basic and diluted common shares (in dollars per share)	$ (0.26)	$ (0.22)
Weighted average basic and diluted common share outstanding (in shares)	12,711,986	12,482,711

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flows from operating activities
Net loss	$ (3,325)	$ (2,689)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and depletion	718	2,507
Deferred income taxes	0	(288)
Stock-based compensation	206	506
Accretion of asset retirement obligation	63	63
Change in fair value of derivative contracts	733	202
Loss on asset sales	0	2
Amortization of debt issuance costs	7	54
Increase (decrease) in cash attributable to changes in operating assets and liabilities:
Trade receivables	316	631
Joint interest receivables	10	135
Prepaid expenses and other assets	(65)	15
Accounts payable and accrued liabilities	(117)	(2,151)
Joint interest revenues payable	7	(118)
Net cash (used) in operating activities	(1,447)	(1,131)
Cash flows from investing activities
Acquisition and development of oil and natural gas properties	(90)	(316)
Acquisition of other property and equipment	(4)	0
Proceeds from sales of oil and natural gas properties	0	3
Net cash (used) in investing activities	(94)	(313)
Cash flows from financing activities
Proceeds from notes payable	608	0
Repayments of notes payable	(1,042)	(765)
Deferred offering costs	0	(7)
Net cash (used) in financing activities	(434)	(772)
Net decrease in cash	(1,975)	(2,216)
Cash, beginning of period	2,839	3,574
Cash, end of period	864	1,138
Supplemental disclosure of cash flow information
Cash paid during the period for interest	451	270
Supplemental disclosure of non-cash investing transactions
Payables related to oil and natural gas capitalized expenditures	$ 102	$ 298

NATURE OF OPERATIONS

NATURE OF OPERATIONS	3 Months Ended
	Mar. 31, 2016
NATURE OF OPERATIONS [Abstract]
NATURE OF OPERATIONS	NOTE 1 - NATURE OF OPERATIONS Brushy was originally formed as Starboard Resources LLC in Delaware on June 2, 2011 as a limited liability company to acquire, own, operate, produce, and develop oil and natural gas properties primarily in Texas and Oklahoma. On June 28, 2012, Starboard converted from a Delaware limited liability company to a Delaware C-Corporation and was named Starboard Resources, Inc. The membership units of Starboard Resources LLC were exchanged on a 1:1 basis for common shares of the Company. On July 31, 2015, Brushy sold substantially all of its Oklahoma producing properties and is primarily now focused on its Texas and New Mexico properties. On August 25, 2015, Starboard changed its name to Brushy Resources, Inc. (“Brushy,” the “Company,” or “its”).

GOING CONCERN

GOING CONCERN	3 Months Ended
	Mar. 31, 2016
GOING CONCERN [Abstract]
GOING CONCERN	NOTE 2 - GOING CONCERN The Company’s independent registered public accounting firm for the year ended December 31, 2015 issued their report dated April 20, 2016, that included an explanatory paragraph describing the existence of conditions that raise substantial doubt about the Company’s ability to continue as a going concern due to its significant accumulated deficit, working capital deficit, significant net losses and need to raise additional funds to meet its obligations and sustain its operations. Given the precipitous decline in oil and natural gas prices during 2015 and into 2016, the Company expects to continue to face liquidity constraints. The Company’s cash flows are negatively impacted by lower realized oil and natural gas sales prices and the significant decline in oil and natural gas prices also increases the uncertainty as to the impact of commodity prices on its estimated proved reserves. As a result, the Company has been in default under the 2013 Credit Agreement between it and Independent Bank, acting for itself and as administrative agent for the other lenders (as amended, the “IB Credit Agreement”) since November 2015. As a result of these defaults, the Company is no longer permitted to make further draws on the IB Credit Agreement and has been subject to a forbearance agreement with the lenders (the “IB Forbearance Agreement”) pursuant to which the lenders agreed to forbear exercising any of their remedies for the existing covenant defaults for a period of time (the “Forbearance Period”) to permit the Company to seek refinancing of the indebtedness owed under the IB Credit Agreement in the approximate amount of $11,000,000, which is referred to as the IB Indebtedness or a sale of sufficient assets to repay the IB Indebtedness. During the Forbearance Period the Company is not permitted to drill new oil or gas wells or make distributions to equity holders. Furthermore, this also cross defaulted the SOSventures Credit Agreement. The Forbearance Period began with the execution of the IB Forbearance Agreement on November 24, 2015 and ended on January 31, 2016, was subsequently extended to March 31, 2016. The Company is currently in discussions with the lender under the IB Credit Agreement regarding a further extension of the Forbearance Period. If the Company does not obtain a further extension of the Forbearance Period, the lenders under the IB Credit Agreement will be able to accelerate the repayment of debt under the IB Credit Agreement. For more information see Note 9 - Notes Payable. Proposed Merger with Lilis On December 29, 2015, the Company agreed to combine its business with Lilis pursuant to the Agreement and Plan of Merger (the “merger agreement”). Pursuant to the merger agreement, Lilis Merger Sub, Inc. (“Merger Sub”) will merge with and into Brushy, with Brushy surviving the merger as a wholly-owned subsidiary of Lilis (the “merger”). Upon completion of the merger, each share of the Company’s common stock issued and outstanding immediately prior to the effective time will be converted into the right to receive an amount of shares of Lilis’s common stock such that the Company’s former stockholders will represent approximately 50% of the then-outstanding shares of Lilis’s common stock after the closing of the merger (without taking into account outstanding restricted stock units or options or warrants to purchase shares of Lilis’s common stock). In connection with the merger, the Company is obligated to convey Giddings Field and the Bigfoot Area, to SOSventures, LLC ("SOSventures"), in exchange for a release of its obligations under the subordinated credit agreement with SOSventures, dated March 29, 2013, as amended. The Company expects the closing of the merger to occur in the first half of 2016. However, the merger is subject to the satisfaction or waiver of other conditions, and it is possible that factors outside the Company’s control could result in the merger being completed at an earlier time, a later time or not at all. If the merger has not been completed on or before May 31, 2016, either Lilis or Brushy may terminate the merger agreement unless the failure to complete the merger by that date is due to the failure of the party seeking to terminate the merger agreement to fulfill any material obligations under the merger agreement or a material breach of the merger agreement by such party. Collectively, these matters raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s Board of Directors and management team continue to take steps to try to strengthen the Company’s balance sheet. The Company intends to execute the merger (which is subject to usual and customary closing conditions beyond the Company's control) and, in the event the merger is not consummated, the Company intends to refinance its existing debt, sell non-core properties and seek private financings to fund its cash needs. Any decision regarding the merger or financing transaction, and the Company's ability to complete such a transaction, will depend on prevailing market conditions and other factors. No assurances can be given that such transactions can be consummated on terms that are acceptable to the Company, or at all. If the Company is unable to restructure its current obligations under its existing outstanding debt and preferred stock instruments, and address near-term liquidity needs, the Company may need to seek relief under the U.S. Bankruptcy Code. This relief may include: (i) seeking bankruptcy court approval for the sale or sales of some, most or substantially all of the Company’s assets pursuant to section 363(b) of the U.S. Bankruptcy Code and a subsequent liquidation of the remaining assets in the bankruptcy case; (ii) pursuing a plan of reorganization (where votes for the plan may be solicited from certain classes of creditors prior to a bankruptcy filing) that the Company would seek to confirm (or “cram down”) despite any classes of creditors who reject or are deemed to have rejected such plan; or (iii) seeking another form of bankruptcy relief, all of which involve uncertainties, potential delays and litigation risks.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2016
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Additionally, the accompanying unaudited condensed consolidated financial statements as of March 31, 2016 and for the three months ended March 31, 2016 and 2015 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q, and reflect, in the opinion of management, all adjustments, which are of a normal and recurring nature, necessary for a fair presentation of the results for such periods. Operating results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2015 and filed with the SEC on April 20, 2016. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company together with its wholly owned subsidiaries, ImPetro Resources, LLC (“ImPetro”) and ImPetro Operating (“Operating”) which collectively are referred to as the Company. All intercompany transactions and balances have been eliminated in consolidation. Reclassification In April 2015, the FASB issued ASU No. 2015-03 (“ASU 2015-03”), “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts, instead of being presented as an asset. ASU 2015-03 is effective for the Company on January 1, 2016. Once adopted, entities are required to apply the new guidance retrospectively to all prior periods presented. The retrospective application represents a change in accounting principle. Early adoption is permitted for financial statements that have not been previously issued. The Company adopted of this guidance during the first quarter of 2016. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements. A $7,000 reclassification from “Prepaid expenses” to a reduction of “Current maturities of related party notes payable” associated with the aforementioned adoption of ASU No. 2015-3, “Interest – Imputation of Interest,” have been made to 2015 condensed consolidated financial statements to conform to the 2016 presentation and have no effect on previously reported net (loss). Oil and Gas Natural Gas Properties The Company uses the successful efforts method of accounting for oil and natural gas producing activities, as further defined under ASC 932, Extractive Activities - Oil and Natural Gas Exploratory drilling costs are capitalized when incurred pending the determination of whether a well has found proved reserves. A determination of whether a well has found proved reserves is made shortly after drilling is completed. The determination is based on a process that relies on interpretations of available geologic, geophysic and engineering data. If a well is determined to be successful, the capitalized drilling costs will be reclassified as part of the cost of the well. Capitalized costs of producing oil and natural gas interests are depleted on a unit-of-production basis at the field level. If an exploratory well is determined to be unsuccessful, the capitalized drilling costs will be charged to expense in the period the determination is made. If a determination cannot be made as to whether the reserves that have been found can be classified as proved, the cost of drilling the exploratory well is not carried as an asset for more than one year following completion of drilling. If, after that year has passed, a determination that proved reserves exist cannot be made, the well is assumed to be impaired and its costs are charged to expense. Its cost can, however, continue to be capitalized if a sufficient quantity of reserves is discovered in the well to justify its completion as a producing well and the entity is making sufficient progress assessing the reserves and the economic and operating viability of the project. The carrying value of oil and gas properties is assessed for possible impairment on a field by field basis and on at least an annual basis, or as circumstances warrant, based on geological analysis or changes in proved reserve estimates. When impairment occurs, an adjustment is recorded as a reduction of the asset carrying value. For the three months ended March 31, 2016 and 2015, there were no impairment charge. Goodwill Goodwill represents the excess of the purchase price over the estimated fair value of the net assets acquired in the acquisition of a business. Goodwill is not amortized; rather, it is tested for impairment annually and when events or changes in circumstances indicate that fair value of a reporting unit with goodwill has been reduced below carrying value. The impairment test requires allocating goodwill and other assets and liabilities to reporting units. However, the Company only has one reporting unit. To assess impairment, the Company has the option to qualitatively assess if it is more likely than not that the fair value of the reporting unit is less than the book value. Absent a qualitative assessment, or, through the qualitative assessment, if the Company determines it is more likely than not that the fair value of the reporting unit is less than the book value, a quantitative assessment is prepared to calculate the fair market value of the reporting unit. If it is determined that the fair value of the reporting unit is less than the book value, the recorded goodwill is impaired to its implied fair value with a charge to operating expenses. As of March 31, 2016 and December 31, 2015 there was no impairment of goodwill. Goodwill of $959,681 was from the acquisition of ImPetro on June 13, 2011. Revenue Recognition and Natural Gas Imbalances The Company utilizes the accrual method of accounting for natural gas and crude oil revenues, whereby revenues are recognized based on the Company’s net revenue interest in the wells upon delivery to third parties. The Company will also enter into physical contract sale agreements through its normal operations. Gas imbalances are accounted for using the sales method. Under this method, revenues are recognized based on actual volumes of oil and gas sold to purchasers. However, the Company has no history of significant gas imbalances. Stock-Based Compensation and Equity Incentive Plans The Company accounts for stock-based compensation in accordance with ASC 718, Compensation - Stock Compensation The Company’s forfeiture rate represents the historical rate at which the Company’s stock-based awards were surrendered prior to vesting. ASC 718 requires forfeitures to be estimated at the time of grant and revised on a cumulative basis, if necessary, in subsequent periods if actual forfeitures differ from those estimates. During the three months ended March 31, 2016 and 2015, the Company incurred stock based compensation expense of approximately $206,000 and $506,000, respectively, and is included in the accompanying condensed consolidated statements of operations in general and administrative expenses. Net Loss Per Common Share Basic net loss per common share is computed by dividing the net loss attributable to stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is calculated in the same manner, but also considers the impact to common shares for the potential dilution from stock options, non-vested share appreciation rights and non-vested restricted shares. For the three months ended March 31, 2016, there were 900,000 potentially dilutive non-vested and vested stock options and 2,542,397 stock warrants. For the three months ended March 31, 2015, there were 900,000 potentially dilutive non-vested restricted shares and stock options. The potentially dilutive shares, for the three months ended March 31, 2016 and 2015, are considered antidilutive since the Company is in a net loss position and thus result in the basic net loss per common share equaling the diluted net loss per common share. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s estimates of oil and natural gas reserves are, by necessity, projections based on geologic and engineering data, and there are uncertainties inherent in the interpretation of such data as well as the projection of future rates of production and the timing of development expenditures. Reserve engineering is a subjective process of estimating underground accumulations of natural gas and oil that are difficult to measure. The accuracy of any reserve estimate is a function of the quality of available data, engineering and geological interpretation and judgment. Estimates of economically recoverable natural gas and oil reserves and future net cash flows necessarily depend upon a number of variable factors and assumptions, such as historical production from the area compared with production from other producing areas, the assumed effect of regulations by governmental agencies, and assumptions governing future natural gas and oil prices, future operating costs, severance taxes, development costs and workover costs, all of which may in fact vary considerably from actual results. The future drilling costs associated with reserves assigned to proved, undeveloped locations may ultimately increase to the extent that these reserves are later determined to be uneconomic. For these reasons, estimates of the economically recoverable quantities of expected natural gas and oil attributable to any particular group of properties, classifications of such reserves based on risk of recovery, and estimates of the future net cash flows may vary substantially. Any significant variance in the assumptions could materially affect the estimated quantity of the reserves, which could affect the carrying value of the Company’s oil and natural gas properties and/or the rate of depletion related to the oil and natural gas properties. The most significant financial estimates are associated with the Company’s estimated volumes of proved oil and natural gas reserves, asset retirement obligations, assessments of impairment imbedded in the carrying value of undeveloped acreages undeveloped properties and developed properties, fair value of financial instruments, including derivative liabilities, depreciation and accretion, income taxes and contingencies. New Accounting Pronouncement In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to employee share-based payment accounting, which includes provisions intended to simplify various aspects related to how share-based compensation payments are accounted for and presented in the financial statements. This amendment will be effective prospectively for reporting periods beginning on or after December 15, 2016, and early adoption is permitted. The Company is currently assessing the impact of the ASU on the Company's condensed consolidated financial statements.

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	3 Months Ended
	Mar. 31, 2016
FAIR VALUE MEASUREMENTS [Abstract]
FAIR VALUE MEASUREMENTS	NOTE 4 - FAIR VALUE MEASUREMENTS As defined by ASC 820, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale, which was further clarified as the price that would be received to sell an asset or paid to transfer a liability (“an exit price”) in an orderly transaction between market participants at the measurement date. The carrying amounts of the Company’s financial assets and liabilities, such as cash, trade receivable, joint interest receivable, joint interest revenues payable, accounts payable and accrued liabilities and related party payable, approximate their fair values because of the short maturity of these instruments. The carrying amount of the notes payable in long-term debt also approximates fair value due to its variable-rate characteristics. The following tables present information about the Company’s financial assets and liabilities measured at fair value as of March 31, 2016 and December 31, 2015: ($ in thousands) Level 1 Level 2 Level 3 Balance as of March 31, 2016 Assets Derivative assets (oil collar and put options) $ - $ - $ - $ - Liabilities (at fair value): Asset Retirement Obligations $ - $ - $ 3,660 $ 3,660 ($ in thousands) Level 1 Level 2 Level 3 Balance as of December 31, 2015 Assets Derivative assets (oil collar and put options) $ - $ 733 $ - $ 733 Liabilities (at fair value): Asset Retirement Obligations $ - $ - $ 3,597 $ 3,597 The Company's derivative contracts consist of NYMEX-based fixed price commodity swaps and NYMEX collars. The NYMEX-based fixed price derivative contracts are indexed to NYMEX futures contracts, which are actively traded, for the underlying commodity and are commonly used in the energy industry. A number of financial institutions and large energy companies act as counter-parties to these type of derivative contracts. As the fair value of these derivative contracts is based on a number of inputs, including contractual volumes and prices stated in each derivative contract, current and future NYMEX commodity prices, and quantitative models that are based upon readily observable market parameters that are actively quoted and can be validated through external sources, the Company have characterized these derivative contracts as Level 2. The asset retirement liability is measured using primarily Level 3 inputs. The significant unobservable inputs to this fair value measurement include estimates of plugging costs, remediation costs, inflation rate and well life. The inputs are calculated based on historical data as well as current estimated costs. See Note 7 - Asset Retirement Obligations. The Company estimates the expected undiscounted future cash flows of its oil and natural gas properties and compares such amounts to the carrying amount of the oil and natural gas properties to determine if the carrying amount is recoverable. If the carrying amount exceeds the estimated undiscounted future cash flows, the Company will adjust the carrying amount of the oil and natural gas properties to fair value. The factors used to determine fair value are subject to management’s judgment and expertise and include, but are not limited to, recent sales prices of comparable properties, the present value of future cash flows, net of estimated operating and development costs using estimates or proved reserves, future commodity pricing, future production estimates, anticipated capital expenditures and various discount rates commensurate with the risk and current market conditions associated with realizing the expected cash flows projected. These assumptions represent Level 3 inputs.

PROPERTY ACQUISITION AND DIVEST

PROPERTY ACQUISITION AND DIVESTITURE	3 Months Ended
	Mar. 31, 2016
PROPERTY ACQUISITION AND DIVESTITURE [Abstract]
PROPERTY ACQUISITION AND DIVESTITURE	NOTE 5 - PROPERTY ACQUISITION AND DIVESTITURE On July 31, 2015, the Company sold all of its Oklahoma properties, which were located in Logan and Kingfisher Counties, Oklahoma, to Remora Petroleum, LP (Austin, TX) for $7,249,390. The purchaser is not affiliated with any Company officers, directors or stockholders. The following table summarized the results of operation from the properties sold during three months ended March 31, 2015: Oil, natural gas, and related product sales $ 720 Expenses 138 Operating income $ 582 As part of this transaction, the Company entered into the Fifth Amendment to its Credit Agreement with Independent Bank (“Fifth Amendment”). The Fifth Amendment provides that $4,000,000 of the purchase price was paid to Independent Bank to pay down its credit facility with Independent Bank.

OIL AND NATURAL GAS PROPERTIES

OIL AND NATURAL GAS PROPERTIES	3 Months Ended
	Mar. 31, 2016
OIL AND NATURAL GAS PROPERTIES [Abstract]
OIL AND NATURAL GAS PROPERTIES	NOTE 6 - OIL AND NATURAL GAS PROPERTIES The following table presents a summary of the Company’s oil and natural gas properties at March 31, 2016 and December 31, 2015: ($ in thousands) March 31, 2016 December 31, 2015 Oil and natural gas properties Proved-developed producing properties $ 43,710 $ 43,912 Proved-developed non-producing properties 6,228 5,865 Proved-undeveloped properties - - Unproved properties 2,420 2,389 Gross oil and natural gas properties 52,358 52,166 Less: Accumulated depletion (35,992 ) (35,282 ) Total oil and natural gas properties, net of accumulated depletion and impairment $ 16,366 $ 16,884 During the three months ended March 31, 2016 and 2015, the Company incurred depletion expense of approximately $710,000 and $2,495,000, respectively. As of March 31, 2016 and December 31, 2015, the accumulated impairment was approximately $55,985,000.

ASSET RETIREMENT OBLIGATIONS

ASSET RETIREMENT OBLIGATIONS	3 Months Ended
	Mar. 31, 2016
ASSET RETIREMENT OBLIGATIONS [Abstract]
ASSET RETIREMENT OBLIGATIONS	NOTE 7 - ASSET RETIREMENT OBLIGATIONS The Company has recognized the fair value of its asset retirement obligations related to the future costs of plugging, abandonment, and remediation of oil and natural gas producing properties. The present value of the estimated asset retirement obligations has been capitalized as part of the carrying amount of the related oil and natural gas properties. The liability has been accreted to its present value as of the end of each period. At December 31, 2015 and December 31, 2014, the Company evaluated 147 and 169 wells, respectively, and has determined a range of abandonment dates between April 2016 and October 2044. The following table represents a reconciliation of the asset retirement obligations for the three months ended March 31, 2016 and the year ended December 31, 2015: Three Months March 31, 2016 Year Ended December 31, 2015 ($ in thousands) Asset retirement obligations, beginning of period $ 3,597 $ 3.606 Additions to asset retirement obligation - - Liabilities settled during the period - (155 ) Accretion of discount 63 187 Revision of estimate - (41 ) Asset retirement obligations, end of period $ 3,660 $ 3,597 During the three months ended March 31, 2016 and 2015, the Company incurred accretion expense of approximately $63,000 and $63,000, respectively. As of March 31, 2016 and December 31, 2015, the current asset retirement obligation was approximately $400,000 and $392,000 respectively, and the long term asset retirement obligation was approximately $3,260,000 and $3,204,000, respectively. See Note 4 - Fair Value Measurements.

DERIVATIVES

DERIVATIVES	3 Months Ended
	Mar. 31, 2016
DERIVATIVES [Abstract]
DERIVATIVES	NOTE 8 – DERIVATIVES The Company uses derivatives to hedge its oil production. The Company’s hedge position as of December 31, 2015 consisted of put options, some of which were deferred premiums paid at settlement. As of March 31, 2016, pursuant to the IB Forbearance Agreement, the Company did not have any remaining hedge positions. Specifically, the Company unwound the remaining existing hedge contract with Cargill and Cargill paid Independent Bank all hedge settlement proceeds, all hedge liquidation proceeds, and all amounts otherwise payable by Cargill to the Company. Such payments satisfied outstanding interest and default interest owing to Independent Bank as well as certain other expenses. Fair Value of Derivative Financial Instruments ($ in thousands) March 31, 2016 December 31, 2015 Derivative financial instruments - Current asset $ - $ 733 Derivative financial instruments - Long-term assets - - Net derivative financial instruments $ - $ 733 Effect of Derivative Financial Instruments Three Months Ended ($ in thousands) 2016 2015 Realized gain/(loss) on settlement of derivative contracts $ 732 $ 616 Change in fair value of derivative contracts $ (733 ) $ (202 )

NOTES PAYABLE

NOTES PAYABLE	3 Months Ended
	Mar. 31, 2016
NOTES PAYABLE [Abstract]
NOTES PAYABLE	NOTE 9 - NOTES PAYABLE On June 27, 2013, the Company entered into the IB Credit Agreement to borrow up to $100,000,000 at a current rate of 4.00% annum. The IB Credit Agreement was obtained to fund the development of the Company’s oil and natural gas properties and refinance the prior bank facility. At March 31, 2016 and December 31, 2015, the Company had approximately $11,363,000 and $12,400,000 in borrowings outstanding under the IB Credit Agreement, respectively. In November 2015, counsel for Independent Bank notified the Company that it was in default under IB Credit Agreement. On November 24, 2015, the Company entered into the IB Forbearance Agreement and the Third Amendment to the IB Credit Agreement with Independent Bank under which Independent Bank, acting for itself and as administrative agent for other lenders, agreed to forbear exercising any of its remedies for the existing covenant defaults for period of time to permit the Company to seek refinancing of the indebtedness owed to Independent Bank, which is referred to as the IB Indebtedness or a sale of sufficient assets to repay the IB Indebtedness. The Forbearance Period began with the execution of the IB Forbearance Agreement on November 24, 2015 and ended on January 31, 2016. The Forbearance Period was subsequently extended to March 31, 2016. At the time of the extension of the Forbearance Period to March 31, 2016, the Company agreed to unwind the remaining existing hedge contract with Cargill and permit Cargill to pay to Independent Bank all hedge settlement proceeds, all hedge liquidation proceeds, and all amounts otherwise payable by Cargill to the Company. Such payments satisfied outstanding interest and default interest owing to Independent Bank as well as certain other expenses. In addition, such payments reduced the principal due Independent Bank by $406,720. During the Forbearance Period, the Company is not permitted to drill new oil or gas wells or to make any distributions to equity holders. Furthermore, this default also cross defaulted the SOSVentures Credit Agreement, however the maturity of the second lien note to SOSventures was extended to August 1, 2016. The Company is currently in discussions with the lenders under the IB Credit Agreement regarding a further extension of the Forbearance Period. The Company is also in discussions with Lilis and other financing parties regarding possible refinance options for the amount outstanding under the IB Credit Agreement On December 29, 2015, the Company entered into the merger agreement. At March 31, 2016 and December 31, 2015, the refundable deposit paid by Lilis to the Company was approximately $2,358,000 and $1,750,000, respectively.

STOCK BASED COMPENSATION AND CO

STOCK BASED COMPENSATION AND CONDITIONAL PERFORMANCE AWARDS	3 Months Ended
	Mar. 31, 2016
STOCK BASED COMPENSATION AND CONDITIONAL PERFORMANCE AWARDS [Abstract]
STOCK BASED COMPENSATION AND CONDITIONAL PERFORMANCE AWARDS	NOTE 10 - STOCK BASED COMPENSATION AND CONDITIONAL PERFORMANCE AWARDS On April 1, 2012, the Company entered into employment agreements (the “Employment Agreement”) which provided a restricted stock grant and a conditional performance award to key members of management. The restricted stock grant of 349,650 shares had a grant date fair value of $10.00 per share as approved by the Company's compensation committee and vests in full upon the earlier of an initial public offering (“IPO”) which includes the sale of shares to the public, a business combination whereas 50% or more of the voting power is transferred to the new owners, or March 1, 2015. Those 349,650 shares were earned by the employee recipients and issued to them during the three months ended March 31, 2015. During the three months ended March 31, 2016 and 2015, the Company incurred a stock-based compensation expense of approximately $0 and $300,000, respectively, related to the restricted stock grant, which is included in the accompanying condensed consolidated statements of operations in general and administrative expenses. Additionally, the Employment Agreement provides for a conditional performance award if an IPO occurs, the employee will receive: (1) a cash payment of 1% of the difference between the Company market capital and the book value at the time of the IPO, (2) common stock options to purchase 1.0% of the fully-diluted capital stock as of the IPO date and IPO price which will vest over a four year period and contain a cashless exercise, (3) common stock options to purchase 1.0% of the fully-diluted capital stock as of the 2nd anniversary of the IPO date at the closing price of the common stock on the 2nd anniversary date of the IPO and will vest six years after the grant and contain a cashless exercise. As of the three months ended March 31, 2016 and 2015, the conditional performance feature is not probable and as such, no compensation expense related to the conditional performance feature has been recognized. On August 30, 2014, the Company amended and restated the Employment Agreement which provided for additional stock options. The equity award of options to purchase 900,000 shares of common stock at the exercise price of $4.75 per share and vesting over three years from September 4, 2014 with a one-year cliff (in respect of 300,000 shares) and monthly vesting thereafter of 25,000 shares over the remaining two years. During the three months ended March 31, 2016 and 2015, the Company incurred a stock-based compensation expense of approximately $206,000 in both years related to stock options, which is included in the accompanying condensed consolidated statements of operations in general and administrative expenses. As of March 31, 2016, there was approximately $1,169,000 of unrecognized stock-based compensation related to the non-vested stock options to be recognized over 1.42 years. The assumptions used in the Black-Scholes Option Pricing Model for the stock options granted were as follows: 2014 Risk-free interest rate 1.87 % Expected volatility of common stock 92 % Dividend yield $ 0.00 Expected life of options 5.72 years For the three months ended March 31, 2016, there were no new stock options granted. As of March 31, 2016, there were 900,000 stock options outstanding and the intrinsic value of the associated options was zero. The weighted average exercise of $4.75/share, weighted average grant date fair value of $2.75/share and the weighted average remaining contractual life of 8.3 years. On March 31, 2016, 500,000 stock options were exercisable.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	3 Months Ended
	Mar. 31, 2016
RELATED PARTY TRANSACTIONS [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 11 - RELATED PARTY TRANSACTIONS Subordinated Credit Facility with SOSVentures A director currently serving on the Company’s Board of Directors, Bill Liao, works for SOSventures. Further, a group composed of SOSventures, Sean O’Sullivan Revocable Living Trust and Bradford R. Higgins constitute a group owning 4,863,720 or 39.34% of the Company’s common stock shares. On June 3, 2014, the Company agreed to amend its credit agreement with SOSventures, originally entered into on July 25, 2013, providing for a term loan through February 16, 2016 in an amount up to $20,000,000 at an 18.00% interest rate. The loan under this agreement is secured by a second lien on the Company’s assets. The SOSventures credit agreement requires the Company to maintain certain financial ratios. First, the Company must maintain an interest coverage ratio of 3:1 at the end of each quarter so that its consolidated net income less the Company’s fees under the credit facility, lender expenses, non-cash charges relating to the hedge agreements, interest, income taxes, depreciation, depletion, amortization, exploration expenditures and costs and other non-cash charges (netted for noncash income) (“EBITDAX”) is greater than 3 times the Company’s interest expense under the credit facility. Second, the Company must maintain a debt to EBITDAX ratio of less than 3.5:1 at the end of each quarter. Third, the Company must maintain a current ratio of at greater than 1:1 at the end of each quarter, meaning that the Company’s consolidated current assets (including the unused amount of the credit facility by excluding non-cash assets under ASC 410 and 815) must be greater than the Company’s consolidated current liabilities (excluding non-cash obligations under ASC 410 and 815 and current maturities under the credit facility.) The credit agreement prevents the Company from incurring indebtedness to banks or lenders, other than Independent Bank, without the consent of SOSventures. It also prevents the Company from incurring most contingent obligations or liens (other than to Independent Bank). It also restricts the Company’s ability to pay dividends, issue options and warrants and repurchase the Company’s common stock shares. The limitation on options and warrants does not apply to equity compensation plans. This credit facility is currently in default due to the default under the IB Credit Agreement. As of March 31, 2016, with accrued and unpaid interest the Company has $21,718,000 drawn against the SOSventures credit facility. In light of the December 19, 2014 notice from Independent Bank relating to the payment of interest to SOSventures, pursuant to the Intercreditors Agreement, the Company is accruing interest payments to SOSventures since the date of that notice.

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS	3 Months Ended
	Mar. 31, 2016
LEGAL PROCEEDINGS [Abstract]
LEGAL PROCEEDINGS	NOTE 12 - LEGAL PROCEEDINGS From time-to-time, the Company may become subject to proceedings, lawsuits and other claims in the ordinary course of business including proceedings related to environmental and other matters. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. The Company is subject to various possible contingencies that arise primarily from interpretation of federal and state laws and regulations affecting the oil and natural gas industry. Such contingencies include differing interpretations as to the prices at which oil and natural gas sales may be made, the prices at which royalty owners may be paid for production from their leases, environmental issues and other matters. Although management believes that it has complied with the various laws and regulations, administrative rulings and interpretations thereof, adjustments could be required as new interpretations and regulations are issued. In addition, environmental matters are subject to regulation by various federal and state agencies. Lawsuit Relating to 17.23% of the Company's Common Stock Shares Approximately 17.23% of the Company common stock was interpleaded into Connecticut Superior Court for the Judicial District of Stamford/Norwalk at Stamford, Cause No. FST-CV12-6015112-S (“Interpleader Action”). These are the residual shares of common stock that belonged to the Partnerships, after the distribution of the partnerships shares. Claims related to the Interpleader Action were heard in an American Arbitration Association arbitration in 2015. The claims, counterclaims and cross claims relate to the governance, control and termination of the Partnerships, including the distribution by the Partnerships of the Company's shares of common stock to the limited partners in the Partnerships in a liquidating distribution in February 2014 as part of a “monetization” event, and other matters. On September 10, 2015, the American Arbitration Association issued an arbitration award in the Interpleader Action. Bexar County Proceedings On April 17, 2015,the Company was served with a lawsuit filed in Bexar County, Texas (the "Bexar County Proceedings") by William F. Pettinati, Jr., Nicholas Garofolo, Sigma Gas Barbastella Fund and Sigma Gas Antrozous Fund against Starboard (now Brushy), its directors, its Chief Operating Officer, Edward Shaw, its former Chief Financial Officer, Eric Alfuth, the Company's stockholder, Bradford Higgins, and Sean O’Sullivan, the managing director of the Company's stockholder, SOSventures (the “Plaintiffs”). Mr. Pettinati, Mr. Garofolo and the Sigma Gas Antrozous Fund are stockholders. Mr. Pettinati owns 145,112 shares, Mr. Garofolo owns 226,680 shares of common stock and Sigma Gas Antrozous Fund owns 44,610 shares of common stock. Combined these stockholders account for approximately 3.3% of the Company's outstanding common stock. These parties became stockholders in February 2014. The Plaintiffs allege several derivative and direct causes of action. These derivative claims include, breach of fiduciary duty, waste of corporate assets, concerted action and conspiracy, joint enterprise, agency, alter ego, exemplary damages, and unjust enrichment. The direct claims include, breach of fiduciary duty, conversion, stockholder oppression, concerted action and conspiracy, declaratory judgment that the distribution of stock to the plaintiffs was invalid, joint enterprise, agency, alter ego, exemplary damages, concerted action and conspiracy and failure to allow for inspection of books and records. Many of the allegations relate to events that allegedly happened before the Plaintiffs became stockholders, including the distributions from the Partnerships that led to the Plaintiffs becoming stockholders in February 2014. Some similar claims involving these Plaintiffs (including the legality of the Partnerships’ liquidating distribution) were previously heard in the arbitration relating to the Partnerships referenced above. Plaintiffs were parties to that arbitration. For actions after February 2014, Plaintiffs complain that the Company's common stock still lacks a trading venue, that a books and records request was not honored, that the Company “delayed” a public offering, that SOSventures had allegedly taken steps to “foreclose” on the Company's assets under the SOSventures Credit Agreement and that the Company filed for an extension to the filing date for the Company's annual report on Form 10-K for the year ended December 31, 2014. On October 6, 2015, Plaintiffs withdrew the claim about not honoring a books and records request. The Company's directors and officers are subject to indemnification under the Company's bylaws. Settlement of Interpleader Action and Bexar County Proceedings On February 17, 2016, the various parties to the Interpleader Action and the Bexar County Proceedings entered into a global settlement agreement (the “Settlement Agreement”) under which the parties to the proceedings issued mutual releases and the plaintiffs in all proceedings agreed to withdraw their claims. In return, the plaintiffs received a cash settlement, the majority of which was covered by the Company's insurance. $350,000 of the settlement payment will be due and payable by the Company on the first to occur of (a) consummation of the merger with Lilis and (b) July 31, 2016.

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	3 Months Ended
	Mar. 31, 2016
STOCKHOLDERS' EQUITY [Abstract]
STOCKHOLDERS' EQUITY	NOTE 13 – STOCKHOLDERS’ EQUITY Warrants Upon entering into the Second Amendment to the First Amended and Restated Credit Agreement on April 15, 2015 with SOSVentures, SOSVentures received warrants to purchase 2,542,397 shares of the Company’s common stock for $1.00 per share with a two-year term. The intrinsic value associated with the outstanding warrants was zero at March 31, 2016, as the strike price of all warrants exceeded the implied market price for common stock. The remaining contract life was 1 year. The implied value of the warrants were based on the Company’s peer group, which included Company’s owning assets in the same areas and of similar size. This valuation determined that the value of the warrants was approximately zero. As such, the Company has placed no value on the warrants issued. NOTE 14 – SUBSEQUENT EVENTS Special Meeting of Stockholders Regarding Merger Agreement On May 20, 2016, the Company held a special meeting of stockholders to consider and vote on (1) a proposal to approve and adopt the merger agreement; and (2) a proposal to authorize the Company’s board of directors, in its discretion, to adjourn the special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies in favor of the proposal to approve and adopt the Merger Agreement. The proposals were approved by the Company’s stockholders. Third Amendment to Forbearance Agreement with Independent Bank On May 20, 2016, the Company, ImPetro and Operating entered into the Third Amendment to the Forbearance agreement (the “Third Amendment”) with Independent Bank, pursuant to which Independent Bank agreed to extend the Forbearance Period to May 31, 2016 (and in certain circumstances June 15, 2016) upon payment by the Company of (i) $79,772.64, such payment representing non-default and default interest accrued and to be accrued through May 31, 2016, and (ii) $30,000, such payment representing legal fees and expenses incurred by Independent Bank in connection with the Third Amendment. In the event the Company pays Independent Bank, on or before May 31, 2016, an additional $18,938.11, the Forbearance Period will be extended to June 15, 2016. On May 20, 2016, the above referenced payments were made to Independent Bank by the Company.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2016
SUBSEQUENT EVENTS [Abstract]
SUBSEQUENT EVENTS	NOTE 14 – SUBSEQUENT EVENTS Special Meeting of Stockholders Regarding Merger Agreement On May 20, 2016, the Company held a special meeting of stockholders to consider and vote on (1) a proposal to approve and adopt the merger agreement; and (2) a proposal to authorize the Company’s board of directors, in its discretion, to adjourn the special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies in favor of the proposal to approve and adopt the Merger Agreement. The proposals were approved by the Company’s stockholders. Third Amendment to Forbearance Agreement with Independent Bank On May 20, 2016, the Company, ImPetro and Operating entered into the Third Amendment to the Forbearance agreement (the “Third Amendment”) with Independent Bank, pursuant to which Independent Bank agreed to extend the Forbearance Period to May 31, 2016 (and in certain circumstances June 15, 2016) upon payment by the Company of (i) $79,772.64, such payment representing non-default and default interest accrued and to be accrued through May 31, 2016, and (ii) $30,000, such payment representing legal fees and expenses incurred by Independent Bank in connection with the Third Amendment. In the event the Company pays Independent Bank, on or before May 31, 2016, an additional $18,938.11, the Forbearance Period will be extended to June 15, 2016. On May 20, 2016, the above referenced payments were made to Independent Bank by the Company.

SUMMARY OF SIGNIFICANT ACCOUN20

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2016
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Basis of Presentation	Basis of Presentation The condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Additionally, the accompanying unaudited condensed consolidated financial statements as of March 31, 2016 and for the three months ended March 31, 2016 and 2015 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q, and reflect, in the opinion of management, all adjustments, which are of a normal and recurring nature, necessary for a fair presentation of the results for such periods. Operating results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2015 and filed with the SEC on April 20, 2016.
Principles of Consolidation	Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company together with its wholly owned subsidiaries, ImPetro Resources, LLC (“ImPetro”) and ImPetro Operating (“Operating”) which collectively are referred to as the Company. All intercompany transactions and balances have been eliminated in consolidation.
Reclassification	Reclassification In April 2015, the FASB issued ASU No. 2015-03 (“ASU 2015-03”), “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts, instead of being presented as an asset. ASU 2015-03 is effective for the Company on January 1, 2016. Once adopted, entities are required to apply the new guidance retrospectively to all prior periods presented. The retrospective application represents a change in accounting principle. Early adoption is permitted for financial statements that have not been previously issued. The Company adopted of this guidance during the first quarter of 2016. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements. A $7,000 reclassification from “Prepaid expenses” to a reduction of “Current maturities of related party notes payable” associated with the aforementioned adoption of ASU No. 2015-3, “Interest – Imputation of Interest,” have been made to 2015 condensed consolidated financial statements to conform to the 2016 presentation and have no effect on previously reported net (loss).
Oil and Gas Natural Gas Properties	Oil and Gas Natural Gas Properties The Company uses the successful efforts method of accounting for oil and natural gas producing activities, as further defined under ASC 932, Extractive Activities - Oil and Natural Gas Exploratory drilling costs are capitalized when incurred pending the determination of whether a well has found proved reserves. A determination of whether a well has found proved reserves is made shortly after drilling is completed. The determination is based on a process that relies on interpretations of available geologic, geophysic and engineering data. If a well is determined to be successful, the capitalized drilling costs will be reclassified as part of the cost of the well. Capitalized costs of producing oil and natural gas interests are depleted on a unit-of-production basis at the field level. If an exploratory well is determined to be unsuccessful, the capitalized drilling costs will be charged to expense in the period the determination is made. If a determination cannot be made as to whether the reserves that have been found can be classified as proved, the cost of drilling the exploratory well is not carried as an asset for more than one year following completion of drilling. If, after that year has passed, a determination that proved reserves exist cannot be made, the well is assumed to be impaired and its costs are charged to expense. Its cost can, however, continue to be capitalized if a sufficient quantity of reserves is discovered in the well to justify its completion as a producing well and the entity is making sufficient progress assessing the reserves and the economic and operating viability of the project. The carrying value of oil and gas properties is assessed for possible impairment on a field by field basis and on at least an annual basis, or as circumstances warrant, based on geological analysis or changes in proved reserve estimates. When impairment occurs, an adjustment is recorded as a reduction of the asset carrying value. For the three months ended March 31, 2016 and 2015, there were no impairment charge.
Goodwill	Goodwill Goodwill represents the excess of the purchase price over the estimated fair value of the net assets acquired in the acquisition of a business. Goodwill is not amortized; rather, it is tested for impairment annually and when events or changes in circumstances indicate that fair value of a reporting unit with goodwill has been reduced below carrying value. The impairment test requires allocating goodwill and other assets and liabilities to reporting units. However, the Company only has one reporting unit. To assess impairment, the Company has the option to qualitatively assess if it is more likely than not that the fair value of the reporting unit is less than the book value. Absent a qualitative assessment, or, through the qualitative assessment, if the Company determines it is more likely than not that the fair value of the reporting unit is less than the book value, a quantitative assessment is prepared to calculate the fair market value of the reporting unit. If it is determined that the fair value of the reporting unit is less than the book value, the recorded goodwill is impaired to its implied fair value with a charge to operating expenses. As of March 31, 2016 and December 31, 2015 there was no impairment of goodwill. Goodwill of $959,681 was from the acquisition of ImPetro on June 13, 2011.
Revenue Recognition and Natural Gas Imbalances	Revenue Recognition and Natural Gas Imbalances The Company utilizes the accrual method of accounting for natural gas and crude oil revenues, whereby revenues are recognized based on the Company’s net revenue interest in the wells upon delivery to third parties. The Company will also enter into physical contract sale agreements through its normal operations. Gas imbalances are accounted for using the sales method. Under this method, revenues are recognized based on actual volumes of oil and gas sold to purchasers. However, the Company has no history of significant gas imbalances.
Stock-Based Compensation and Equity Incentive Plans	Stock-Based Compensation and Equity Incentive Plans The Company accounts for stock-based compensation in accordance with ASC 718, Compensation - Stock Compensation The Company’s forfeiture rate represents the historical rate at which the Company’s stock-based awards were surrendered prior to vesting. ASC 718 requires forfeitures to be estimated at the time of grant and revised on a cumulative basis, if necessary, in subsequent periods if actual forfeitures differ from those estimates. During the three months ended March 31, 2016 and 2015, the Company incurred stock based compensation expense of approximately $206,000 and $506,000, respectively, and is included in the accompanying condensed consolidated statements of operations in general and administrative expenses.
Net Loss Per Common Share	Net Loss Per Common Share Basic net loss per common share is computed by dividing the net loss attributable to stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is calculated in the same manner, but also considers the impact to common shares for the potential dilution from stock options, non-vested share appreciation rights and non-vested restricted shares. For the three months ended March 31, 2016, there were 900,000 potentially dilutive non-vested and vested stock options and 2,542,397 stock warrants. For the three months ended March 31, 2015, there were 900,000 potentially dilutive non-vested restricted shares and stock options. The potentially dilutive shares, for the three months ended March 31, 2016 and 2015, are considered antidilutive since the Company is in a net loss position and thus result in the basic net loss per common share equaling the diluted net loss per common share.
Use of Estimates	Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s estimates of oil and natural gas reserves are, by necessity, projections based on geologic and engineering data, and there are uncertainties inherent in the interpretation of such data as well as the projection of future rates of production and the timing of development expenditures. Reserve engineering is a subjective process of estimating underground accumulations of natural gas and oil that are difficult to measure. The accuracy of any reserve estimate is a function of the quality of available data, engineering and geological interpretation and judgment. Estimates of economically recoverable natural gas and oil reserves and future net cash flows necessarily depend upon a number of variable factors and assumptions, such as historical production from the area compared with production from other producing areas, the assumed effect of regulations by governmental agencies, and assumptions governing future natural gas and oil prices, future operating costs, severance taxes, development costs and workover costs, all of which may in fact vary considerably from actual results. The future drilling costs associated with reserves assigned to proved, undeveloped locations may ultimately increase to the extent that these reserves are later determined to be uneconomic. For these reasons, estimates of the economically recoverable quantities of expected natural gas and oil attributable to any particular group of properties, classifications of such reserves based on risk of recovery, and estimates of the future net cash flows may vary substantially. Any significant variance in the assumptions could materially affect the estimated quantity of the reserves, which could affect the carrying value of the Company’s oil and natural gas properties and/or the rate of depletion related to the oil and natural gas properties. The most significant financial estimates are associated with the Company’s estimated volumes of proved oil and natural gas reserves, asset retirement obligations, assessments of impairment imbedded in the carrying value of undeveloped acreages undeveloped properties and developed properties, fair value of financial instruments, including derivative liabilities, depreciation and accretion, income taxes and contingencies.
New Accounting Pronouncement	New Accounting Pronouncement In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to employee share-based payment accounting, which includes provisions intended to simplify various aspects related to how share-based compensation payments are accounted for and presented in the financial statements. This amendment will be effective prospectively for reporting periods beginning on or after December 15, 2016, and early adoption is permitted. The Company is currently assessing the impact of the ASU on the Company's condensed consolidated financial statements.

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	3 Months Ended
	Mar. 31, 2016
FAIR VALUE MEASUREMENTS [Abstract]
Fair Value Measurements	The following tables present information about the Company’s financial assets and liabilities measured at fair value as of March 31, 2016 and December 31, 2015: ($ in thousands) Level 1 Level 2 Level 3 Balance as of March 31, 2016 Assets Derivative assets (oil collar and put options) $ - $ - $ - $ - Liabilities (at fair value): Asset Retirement Obligations $ - $ - $ 3,660 $ 3,660 ($ in thousands) Level 1 Level 2 Level 3 Balance as of December 31, 2015 Assets Derivative assets (oil collar and put options) $ - $ 733 $ - $ 733 Liabilities (at fair value): Asset Retirement Obligations $ - $ - $ 3,597 $ 3,597

PROPERTY ACQUISITION AND DIVE22

PROPERTY ACQUISITION AND DIVESTITURE (Tables)	3 Months Ended
	Mar. 31, 2016
PROPERTY ACQUISITION AND DIVESTITURE [Abstract]
Summarized Results of Operation from Properties Sold	The following table summarized the results of operation from the properties sold during three months ended March 31, 2015: Oil, natural gas, and related product sales $ 720 Expenses 138 Operating income $ 582

OIL AND NATURAL GAS PROPERTIES

OIL AND NATURAL GAS PROPERTIES (Tables)	3 Months Ended
	Mar. 31, 2016
OIL AND NATURAL GAS PROPERTIES [Abstract]
Oil and Natural Gas Properties	The following table presents a summary of the Company’s oil and natural gas properties at March 31, 2016 and December 31, 2015: ($ in thousands) March 31, 2016 December 31, 2015 Oil and natural gas properties Proved-developed producing properties $ 43,710 $ 43,912 Proved-developed non-producing properties 6,228 5,865 Proved-undeveloped properties - - Unproved properties 2,420 2,389 Gross oil and natural gas properties 52,358 52,166 Less: Accumulated depletion (35,992 ) (35,282 ) Total oil and natural gas properties, net of accumulated depletion and impairment $ 16,366 $ 16,884

ASSET RETIREMENT OBLIGATIONS (T

ASSET RETIREMENT OBLIGATIONS (Tables)	3 Months Ended
	Mar. 31, 2016
ASSET RETIREMENT OBLIGATIONS [Abstract]
Schedule of Asset Retirement Obligations	The following table represents a reconciliation of the asset retirement obligations for the three months ended March 31, 2016 and the year ended December 31, 2015: Three Months March 31, 2016 Year Ended December 31, 2015 ($ in thousands) Asset retirement obligations, beginning of period $ 3,597 $ 3.606 Additions to asset retirement obligation - - Liabilities settled during the period - (155 ) Accretion of discount 63 187 Revision of estimate - (41 ) Asset retirement obligations, end of period $ 3,660 $ 3,597

DERIVATIVES (Tables)

DERIVATIVES (Tables)	3 Months Ended
	Mar. 31, 2016
DERIVATIVES [Abstract]
Summary of Fair Value of Derivative Financial Instruments	Fair Value of Derivative Financial Instruments ($ in thousands) March 31, 2016 December 31, 2015 Derivative financial instruments - Current asset $ - $ 733 Derivative financial instruments - Long-term assets - - Net derivative financial instruments $ - $ 733
Effect of Derivative Financial Instruments	Effect of Derivative Financial Instruments Three Months Ended ($ in thousands) 2016 2015 Realized gain/(loss) on settlement of derivative contracts $ 732 $ 616 Change in fair value of derivative contracts $ (733 ) $ (202 )

STOCK BASED COMPENSATION AND 26

STOCK BASED COMPENSATION AND CONDITIONAL PERFORMANCE AWARDS (Tables)	3 Months Ended
	Mar. 31, 2016
STOCK BASED COMPENSATION AND CONDITIONAL PERFORMANCE AWARDS [Abstract]
Black-Scholes Option Pricing Model for the Stock Options	The assumptions used in the Black-Scholes Option Pricing Model for the stock options granted were as follows: 2014 Risk-free interest rate 1.87 % Expected volatility of common stock 92 % Dividend yield $ 0.00 Expected life of options 5.72 years

NATURE OF OPERATIONS (Details)

NATURE OF OPERATIONS (Details)	3 Months Ended
	Mar. 31, 2016
NATURE OF OPERATIONS [Abstract]
Ratio of LLC membership units exchanged for common shares	1

GOING CONCERN (Details)

GOING CONCERN (Details) - USD ($)	Mar. 31, 2016	Dec. 29, 2015
Line of Credit Facility [Abstract]
IB Indebtedness	$ 11,000,000
Outstanding shares of Lilis's common stock, percentage		50.00%

SUMMARY OF SIGNIFICANT ACCOUN29

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2016USD ($)ReportingUnitshares	Mar. 31, 2015USD ($)shares	Dec. 31, 2015USD ($)	Jun. 13, 2011USD ($)
Reclassification [Abstract]
Prepaid expenses, reclassified	$ 124,000		$ 59,000
Oil and Gas Natural Gas Properties [Abstract]
Number of years given for completion of drilling for well	1 year
Impairment of oil and gas properties	$ 0	$ 0
Goodwill [Abstract]
Number of reporting unit | ReportingUnit	1
Impairment of goodwill	$ 0		0
Goodwill	960,000		$ 960,000
Stock-Based Compensation and Equity Incentive Plans [Abstract]
Stock based compensation expense	$ 206,000	$ 506,000
Net Loss Per Common Share [Abstract]
Potentially dilutive non-vested restricted shares and stock options (in shares) | shares	900,000	900,000
Stock warrants (in shares) | shares	2,542,397
ImPetro Resources, LLC [Member]
Goodwill [Abstract]
Goodwill				$ 959,681
Accounting Standards Update 2015-03 [Member]
Reclassification [Abstract]
Prepaid expenses, reclassified	$ 7,000

FAIR VALUE MEASUREMENTS (Detail

FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Assets (at fair value): [Abstract]
Derivative assets (oil collar and put options)	$ 0	$ 733
Liabilities (at fair value): [Abstract]
Asset retirement obligations	3,660	3,597	$ 4
Level 1 [Member]
Assets (at fair value): [Abstract]
Derivative assets (oil collar and put options)	0	0
Liabilities (at fair value): [Abstract]
Asset retirement obligations	0	0
Level 2 [Member]
Assets (at fair value): [Abstract]
Derivative assets (oil collar and put options)	0	733
Liabilities (at fair value): [Abstract]
Asset retirement obligations	0	0
Level 3 [Member]
Assets (at fair value): [Abstract]
Derivative assets (oil collar and put options)	0	0
Liabilities (at fair value): [Abstract]
Asset retirement obligations	$ 3,660	$ 3,597

PROPERTY ACQUISITION AND DIVE31

PROPERTY ACQUISITION AND DIVESTITURE (Details) - USD ($)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2016	Jul. 31, 2015
PROPERTY ACQUISITION AND DIVESTITURE [Abstract]
Sale price of all Oklahoma properties			$ 7,249,390
Summarized results of operation from properties sold [Abstract]
Oil, natural gas, and related product sales	$ 720,000
Expenses	138,000
Operating income	$ 582,000
Amendment [Member]
Business Acquisition [Line Items]
Portion of proceeds from sale of Oklahoma properties to be used to pay Independent Bank		$ 4,000,000

OIL AND NATURAL GAS PROPERTIE32

OIL AND NATURAL GAS PROPERTIES (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Oil and natural gas properties [Abstract]
Proved-developed producing properties	$ 43,710,000		$ 43,912,000
Proved-developed non-producing properties	6,228,000		5,865,000
Proved-undeveloped properties	0		0
Unproved properties	2,420,000		2,389,000
Gross oil and natural gas properties	52,358,000		52,166,000
Less: Accumulated depletion	(35,992,000)		(35,282,000)
Total oil and natural gas properties, net of accumulated depletion and impairment	16,366,000		16,884,000
Depletion expense	710,000	$ 2,495,000
Accumulated impairment of oil and gas properties	$ 55,985,000		$ 55,985,000

ASSET RETIREMENT OBLIGATIONS (D

ASSET RETIREMENT OBLIGATIONS (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
ASSET RETIREMENT OBLIGATIONS [Abstract]
Asset retirement obligations, beginning of period	$ 3,597	$ 4	$ 4
Additions to asset retirement obligation	0		0
Liabilities settled during the period	0		(155)
Accretion of discount	63	$ 63	187
Revision of estimate	0		(41)
Asset retirement obligations, end of period	3,660		3,597
Current asset retirement obligation	400		392
Long term asset retirement obligation	$ 3,260		$ 3,204

DERIVATIVES, Fair value (Detail

DERIVATIVES, Fair value (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
DERIVATIVES [Abstract]
Derivative financial instruments - Current asset	$ 0	$ 733
Derivative financial instruments - Long-term assets	0	0
Net derivative financial instruments	$ 0	$ 733

DERIVATIVES, Effect of Derivati

DERIVATIVES, Effect of Derivative Financial Instruments (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
DERIVATIVES [Abstract]
Realized gain/(loss) on settlement of derivative contracts	$ 1,656		$ (19)
Change in fair value of derivative contracts	$ (733)	$ (202)	$ (202)

NOTES PAYABLE (Details)

NOTES PAYABLE (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015	Jun. 27, 2013
Notes Payable [Abstract]
Borrowings outstanding	$ 11,000,000
Refundable deposit paid by Lilis	2,358,000	$ 1,750,000
Credit Agreement [Member]
Notes Payable [Abstract]
Maximum borrowing capacity			$ 100,000,000
Current interest rate			4.00%
Borrowings outstanding	11,363,000	$ 12,400,000
Forbearance Agreement [Member]
Notes Payable [Abstract]
Reduction in principal due	$ (406,720)

STOCK BASED COMPENSATION AND 37

STOCK BASED COMPENSATION AND CONDITIONAL PERFORMANCE AWARDS (Details) - USD ($)	Apr. 01, 2012	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense		$ 206,000	$ 506,000
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Risk-free interest rate				1.87%
Expected volatility of common stock				92.00%
Dividend yield				0.00%
Expected life of options				5 years 8 months 19 days
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grant of shares (in shares)	349,650
Grant date fair value (in dollars per share)	$ 10
Stock issued during period exercise of restricted stock (in shares)			349,650
Restricted Stock [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of voting power transferred to new owners	50.00%
Restricted Stock [Member] | General and Administrative Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense		0	$ 300,000
Conditional Performance Award [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense		$ 0	0
Percentage of cash payment difference between market capital and book value at the time of the IPO under employment agreement in condition 1		1.00%
Percentage of fully-diluted capital stock to purchase common stock options under employment agreement in condition 2		1.00%
Vesting period of fully-diluted capital stock under employment agreement in condition 2		4 years
Percentage of fully-diluted capital stock to purchase common stock options under employment agreement in condition 3		1.00%
Vesting period of fully-diluted capital stock under employment agreement in condition 3		6 years
Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period of equity award options		3 years
Equity award options with a one-year cliff (in shares)		300,000
Monthly vesting of equity award options (in shares)		25,000
Unrecognized stock-based compensation related to the non-vested stock options		$ 1,169,000
Period for recognition of unrecognized stock-based compensation		1 year 5 months 1 day
Number of options granted (in shares)		0
Number of options outstanding (in shares)		900,000
Intrinsic value of options outstanding		$ 0
Weighted average exercise price (in dollars per share)		$ 4.75
Weighted average grant date fair value (in dollars per share)		$ 2.75
Weighted average remaining contractual life		8 years 3 months 18 days
Number of options exercisable (in shares)		500,000
Stock Option [Member] | General and Administrative Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense		$ 206,000	$ 206,000

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details)	Jun. 03, 2014USD ($)	Mar. 31, 2016USD ($)shares	Dec. 31, 2015USD ($)	Dec. 29, 2015	Jun. 27, 2013USD ($)
Related Party Transaction [Line Items]
Equity method investment, ownership percentage				50.00%
Amount drawn against credit facility		$ 11,000,000
Credit Agreement [Member]
Related Party Transaction [Line Items]
Line of credit facility, amount					$ 100,000,000
Amount drawn against credit facility		$ 11,363,000	$ 12,400,000
Owner Group [Member]
Related Party Transaction [Line Items]
Equity method investment, number of shares held (in shares) | shares		4,863,720
Equity method investment, ownership percentage		39.34%
SOSventures [Member]
Related Party Transaction [Line Items]
Amount drawn against credit facility		$ 21,718,000
SOSventures [Member] | Credit Agreement [Member] | Term Loan [Member]
Related Party Transaction [Line Items]
Line of credit facility, amount	$ 20,000,000
Line of credit facility, interest rate	18.00%
Interest coverage ratio		3
Debt to EBITDAX ratio		3.5
Minimum current ratio		1

LEGAL PROCEEDINGS (Details)

LEGAL PROCEEDINGS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 29, 2015
Legal Proceeding [Abstract]
Percentage of ownership interest			50.00%
Cash settlement payable.	$ (350)	$ 0
Bexar County Proceedings [Member]
Legal Proceeding [Abstract]
Percentage of ownership interest	3.30%
Bexar County Proceedings [Member] | Sigma Gas Antrozous Fund [Member]
Legal Proceeding [Abstract]
Common stock owned (in shares)	44,610
Bexar County Proceedings [Member] | William F. Pettinati Jr. [Member]
Legal Proceeding [Abstract]
Common stock owned (in shares)	145,112
Bexar County Proceedings [Member] | Nicholas Garofolo [Member]
Legal Proceeding [Abstract]
Common stock owned (in shares)	226,680
Interpleader Action [Member]
Legal Proceeding [Abstract]
Percentage of common stock for interpleader action	17.23%
Cash settlement payable.	$ (350)

STOCKHOLDER'S EQUITY (Details)

STOCKHOLDER'S EQUITY (Details)	3 Months Ended
	Mar. 31, 2016USD ($)$ / sharesshares
Warrants [Abstract]
Warrants to purchase common shares (in shares) | shares	2,542,397
Warrants price (in dollars per share) | $ / shares	$ 1
Term of warrants	2 years
Intrinsic value of warrants outstanding | $	$ 0
Remaining warrants contractual life	1 year

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) - USD ($)	May. 20, 2016	Mar. 31, 2016
Subsequent Event [Line Items]
Amount drawn against credit facility		$ 11,000,000
Subsequent Event [Member]
Subsequent Event [Line Items]
Payment of debt	$ 79,772.64
Legal fees and expenses	30,000
Amount drawn against credit facility	$ 18,938.11