PetroShare (PRHRQ) 10-Q 14 Aug 19 2019 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Aug. 13, 2019
Document And Entity Information [Abstract]
Entity Registrant Name	PetroShare Corp.
Entity Central Index Key	0001568079
Document Type	10-Q
Document Period End Date	Jun. 30, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity's Reporting Status Current?	No
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Small Business	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		28,037,804
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2019

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Current assets:
Cash	$ 3,758,009	$ 2,636,943
Accounts receivable - joint interest billing, net of allowance	1,324,075	495,911
Accounts receivable - joint interest billing - related party	102,324	1,158,213
Accounts receivable - crude oil, natural gas and NGL sales	3,657,021	11,659,479
Prepaid expenses and other assets	705,153	178,259
Assets held for sale, net of costs to sell	0	16,090,898
Total current assets	9,546,582	32,219,703
Crude oil and natural gas properties - using successful efforts method:
Proved crude oil and natural gas properties	41,992,807	41,017,944
Unproved crude oil and natural gas properties	1,531,515	2,055,752
Wells in progress	252,607	1,194,114
Less: accumulated depletion, depreciation and amortization	(17,008,211)	(14,395,458)
Crude oil and natural gas properties, net	26,768,718	29,872,352
Property, plant and equipment, net	90,556	115,350
Other assets	522,000	357,070
TOTAL ASSETS	36,927,856	62,564,475
Current liabilities:
Accounts payable and accrued liabilities	14,854,196	24,385,417
Accounts payable and accrued liabilities - related party	3,448	7,624,877
Oil and gas revenue distributions payable	2,727,615	2,501,095
Asset retirement obligation	1,430,985	843,796
Secured credit facility - related party, net	14,299,436	20,182,264
Convertible notes payable, net	9,358,100	9,358,100
Derivative liabilities - Secured credit facility	90,325	241,800
Total current liabilities	42,764,105	65,137,349
Long-term liabilities
Other long-term liabilities	1,687,006	448,465
Asset retirement obligation	649,877	1,246,151
Total liabilities	45,100,988	66,831,965
Shareholders' (deficit):
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued or outstanding	0	0
Common stock, $0.001 par value, 200,000,000 shares authorized, 28,037,804 and 28,089,765 shares issued and outstanding, respectively	28,038	28,090
Additional paid-in capital	33,885,198	33,710,588
Accumulated deficit	(42,086,368)	(38,006,168)
Total Shareholders' (Deficit)	(8,173,132)	(4,267,490)
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY (DEFICIT)	$ 36,927,856	$ 62,564,475

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Preferred stock par value	$ .01	$ .01
Preferred stock shares authorized	10,000,000	10,000,000
Preferred stock shares issued	0	0
Preferred stock shares outstanding	0	0
Common stock par value	$ .001	$ 0.001
Common stock shares authorized	200,000,000	200,000,000
Common stock shares issued	28,037,804	28,089,765
Common stock shares outstanding	28,037,804	28,089,765

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
REVENUE:
Total revenue	$ 5,948,087	$ 4,625,536	$ 10,919,617	$ 6,694,468
COSTS AND EXPENSES:
Lease operating expense	578,305	187,201	1,051,246	493,396
Production taxes, gathering and marketing	776,161	519,520	1,679,075	750,439
Depletion, depreciation and amortization	1,613,421	1,218,175	2,754,875	1,931,772
Loss on sale and abandonment of properties	0	0	822,290	0
Accretion of asset retirement obligation	60,037	27,255	121,821	55,612
(Gain) loss on settlement - asset retirement obligations	(38,742)	1,274	(38,255)	(54,178)
General and administrative expense	1,238,114	941,610	3,324,727	1,538,624
Total costs and expenses	4,227,296	2,895,035	9,715,779	4,715,665
Operating income	1,720,791	1,730,501	1,203,838	1,978,803
OTHER INCOME (EXPENSE):
Change in fair value - derivative liability	74,763	(110,987)	151,475	(21,100)
Other income (expense)	21,297	(12,459)	19,719	(11,661)
Interest expense	(293,011)	(1,717,129)	(5,455,232)	(3,543,861)
Total other (expense)	(196,951)	(1,840,575)	(5,284,038)	(3,576,622)
Net income (loss)	$ 1,523,840	$ (110,074)	$ (4,080,200)	$ (1,597,819)
Net income (loss) per share:
Basic	$ 0.05	$ 0	$ (.15)	$ (0.06)
Fully Diluted	$ 0.05	$ 0	$ (.15)	$ (0.06)
Weighted average number of shares outstanding:
Basic	28,064,735	28,005,644	28,071,067	27,891,210
Fully Diluted	29,564,735	28,005,644	28,071,067	27,891,210
Crude Oil [Member]
REVENUE:
Total revenue	$ 5,549,270	$ 4,042,615	$ 9,728,216	$ 5,467,848
Natural Gas Excluding Natural Gas Liquids [Member]
REVENUE:
Total revenue	205,558	397,978	822,696	792,389
Natural Gas Liquids [Member]
REVENUE:
Total revenue	$ 193,259	$ 184,943	$ 368,705	$ 434,231

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Changes in Shareholders' (Deficit) - USD ($)	Common Stock [Member]	Additional Paid In Capital [Member]	Retained Earnings [Member]	Total
Beginning Balance, Shares at Dec. 31, 2017	27,718,802
Beginning Balance, Amount at Dec. 31, 2017	$ 27,719	$ 28,553,736	$ (20,698,421)	$ 7,833,034
Issuance of common stock in connection with conversion of convertible notes payable, Shares	135,963
Issuance of common stock in connection with conversion of convertible notes payable, Amount	$ 136	203,811		203,947
Issuance of common shares as compensation, Shares	70,000
Issuance of common shares as compensation, Amount	$ 70	69,930		70,000
Beneficial conversion feature on Secured Credit Facility		1,342,680		1,342,680
Warrants issued in connection with Secured Credit Facility		1,625,956		1,625,956
Stock-based compensation		217,589		217,589
Net (loss) income			(1,487,743)	(1,487,743)
Ending Balance, Shares at Mar. 31, 2018	27,924,765
Ending Balance, Amount at Mar. 31, 2018	$ 27,925	32,013,702	(22,186,164)	9,855,463
Beginning Balance, Shares at Dec. 31, 2017	27,718,802
Beginning Balance, Amount at Dec. 31, 2017	$ 27,719	28,553,736	(20,698,421)	7,833,034
Issuance of common stock in connection with conversion of convertible notes payable, Amount				203,944
Net (loss) income				(1,597,819)
Ending Balance, Shares at Jun. 30, 2018	28,064,765
Ending Balance, Amount at Jun. 30, 2018	$ 28,065	33,212,356	(22,296,238)	(10,944,183)
Beginning Balance, Shares at Mar. 31, 2018	27,924,765
Beginning Balance, Amount at Mar. 31, 2018	$ 27,925	32,013,702	(22,186,164)	9,855,463
Issuance of common shares as compensation, Shares	75,000
Issuance of common shares as compensation, Amount	$ 75	92,175		92,250
Issuance of restricted shares, Shares	65,000
Issuance of restricted shares, Amount	$ 65	64,935		65,000
Beneficial conversion feature on Secured Credit Facility		825,587		825,587
Stock-based compensation		215,957		215,957
Net (loss) income			(110,074)	(110,074)
Ending Balance, Shares at Jun. 30, 2018	28,064,765
Ending Balance, Amount at Jun. 30, 2018	$ 28,065	33,212,356	(22,296,238)	(10,944,183)
Beginning Balance, Shares at Dec. 31, 2018	28,089,765
Beginning Balance, Amount at Dec. 31, 2018	$ 28,090	33,710,588	(38,006,168)	(4,267,490)
Restricted shares surrendered to satisfy tax withholding requirements, Shares	(12,433)
Restricted shares surrendered to satisfy tax withholding requirements, Amount	$ (13)	13		0
Stock-based compensation		129,133		129,133
Net (loss) income			(5,604,040)	(5,604,040)
Ending Balance, Shares at Mar. 31, 2019	28,077,332
Ending Balance, Amount at Mar. 31, 2019	$ 28,077	33,839,734	(43,610,208)	(9,742,397)
Beginning Balance, Shares at Dec. 31, 2018	28,089,765
Beginning Balance, Amount at Dec. 31, 2018	$ 28,090	33,710,588	(38,006,168)	(4,267,490)
Issuance of common stock in connection with conversion of convertible notes payable, Amount				0
Net (loss) income				(4,080,200)
Ending Balance, Shares at Jun. 30, 2019	28,037,804
Ending Balance, Amount at Jun. 30, 2019	$ 28,038	33,885,198	(42,086,368)	(8,173,132)
Beginning Balance, Shares at Mar. 31, 2019	28,077,332
Beginning Balance, Amount at Mar. 31, 2019	$ 28,077	33,839,734	(43,610,208)	(9,742,397)
Restricted shares surrendered to satisfy tax withholding requirements, Shares	(39,528)
Restricted shares surrendered to satisfy tax withholding requirements, Amount	$ (39)	39		0
Stock-based compensation		45,425		45,425
Net (loss) income			1,523,840	1,523,840
Ending Balance, Shares at Jun. 30, 2019	28,037,804
Ending Balance, Amount at Jun. 30, 2019	$ 28,038	$ 33,885,198	$ (42,086,368)	$ (8,173,132)

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Cash flows from operating activities:
Net (loss)	$ (4,080,200)	$ (1,597,819)
Adjustments to reconcile net (loss) to net cash provided by (used in) operating activities:
Depletion, depreciation, and amortization	2,754,875	1,931,772
Amortization of right-of-use obligation	(13,298)	(13,298)
Accretion of asset retirement obligation	121,821	55,612
Accretion of debt discounts	4,817,736	3,162,617
Share-based compensation	174,558	660,794
Loss on sale and abandonment of properties	822,290	0
Change in fair value - derivative liability	(151,475)	21,100
Bad debt expense	5,757	0
Changes in operating assets and liabilities:
Accounts receivable - joint interest billing	(733,827)	(824,527)
Accounts receivable - joint interest billing - related party	322,169	(538,467)
Accounts receivable - crude oil, natural gas and NGL sales	864,820	(2,372,709)
Other operating assets and liabilities	643,835	(188,552)
Accounts payable and accrued liabilities	1,574,381	(1,059,316)
Oil and gas revenue distributions payable	226,520	(16,841)
Accounts payable and accrued liabilities - related party	(2,470,047)	49,390
Drilling advances - related party	0	(680,248)
Asset retirement obligations	(120,400)	(142,959)
Net cash provided by (used in) operating activities	4,759,515	(1,553,451)
Cash flows from investing activities:
Development of crude oil and natural gas properties	(3,573,292)	(8,706,655)
Acquisitions of crude oil and natural gas properties	(65,157)	(237,727)
Net cash (used in) investing activities	(3,638,449)	(8,944,382)
Cash flows from financing activities:
Borrowings under secured credit facility, net	0	11,163,192
Net cash provided by financing activities	0	11,163,192
Cash:
Net increase in cash	1,121,066	665,359
Cash, beginning of period	2,636,943	713,924
Cash, end of period	3,758,009	1,379,283
Supplemental cash flow disclosure:
Cash paid for interest, net of amounts capitalized	935,895	801,759
Non-cash investing and financing activities:
Accrued development costs - crude oil and natural gas properties	10,352,922	25,513,409
Exchange proceeds from sale of assets for obligations to secured lender - related party	15,538,766	0
Joint interest billing receivable offset against accounts payable - related party	733,720	0
Reduce working interests - crude oil and natural gas properties	430,810	0
Oil and gas properties - additions - accrued participation agreement payable - related party	0	4,647,047
Conveyance of oil and gas properties - debt repayment	0	2,052,500
Lender fees - secured credit facility	0	1,250,000
Issuance of common stock warrants in connection with secured credit facility	0	1,521,451
Issuance of common stock in connection with conversion of notes payable and accrued interest	0	203,944
Embedded discount features - secured credit facility	0	3,942,792
Initial line of credit - paid through secured credit facility	0	5,000,000
Supplemental line of credit - paid through secured credit facility	0	1,500,000
Accrued interest - paid through secured credit facility	$ 0	$ 1,086,608

ORGANIZATION AND NATURE OF BUSI

ORGANIZATION AND NATURE OF BUSINESS	6 Months Ended
	Jun. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND NATURE OF BUSINESS	PetroShare Corp. (“PetroShare” or the “Company”) is a corporation organized under the laws of the State of Colorado on September 4, 2012 to investigate, acquire and develop crude oil and natural gas properties in the Rocky Mountain or mid-continent portion of the United States. Since inception, the Company has focused on financing activities and the acquisition, exploration and development of crude oil and natural gas prospects and is currently focused in the Denver-Julesburg Basin, or DJ Basin, in northeast Colorado.

BASIS OF PRESENTATION AND SUMMA

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION	6 Months Ended
	Jun. 30, 2019
Accounting Policies [Abstract]
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION	Basis of Presentation The interim condensed consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures included herein are adequate to make the information presented not misleading. These interim 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, 2018. Unless otherwise noted in this Interim Report, there have been no material changes to the disclosures contained in the notes to the audited financial statements for the year ended December 31, 2018. The Condensed Consolidated Balance Sheet as of December 31, 2018 was derived from the audited financial statements included in the Company’s Annual Report on Form 10-K. In management’s opinion, the unaudited interim Condensed Consolidated Balance Sheet, Statements of Operations, Statements of Changes in Shareholders’ Equity (Deficit), and Statements of Cash Flows, contained herein, reflect all adjustments, consisting solely of normal recurring items, which are necessary for the fair presentation of the Company’s financial position, results of operations and cash flows on a basis consistent with that of the Company’s prior audited consolidated financial statements. The results of operations for the interim periods may not be indicative of results to be expected for the full fiscal year. Certain prior period amounts were reclassified to conform to the current presentation on the Condensed Consolidated Financial Statements. Principles of Consolidation The consolidated financial statements include the accounts and balances of the Company and its wholly-owned subsidiary, CFW Resources, LLC, a Colorado limited liability company. The Company’s undivided interests in joint operating ventures are proportionately consolidated. Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, as well as the disclosure of contingent assets and liabilities. Estimated quantities of crude oil, natural gas and natural gas liquids are the most significant of the Company’s estimates. All reserve data used in the preparation of these condensed consolidated financial statements are based on estimates. Reservoir engineering is a subjective process of estimating underground accumulations of crude oil, natural gas and natural gas liquids. There are numerous uncertainties inherent in estimating quantities of proved, probable and possible reserves. The accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation and judgment. As a result, reserve estimates may be different from the quantities of crude oil, natural gas and natural gas liquids that are ultimately recovered. Income (Loss) Per Share Basic earnings or loss per share is computed by dividing net income or loss by the weighted average number of common shares outstanding during the period. Diluted earnings or loss per common share is calculated by dividing net income or loss available to common stockholders by the diluted weighted-average number of common shares outstanding, which includes the effect of potentially dilutive securities. Potentially dilutive securities for this calculation consist primarily of warrants, outstanding options, and shares into which the convertible notes are convertible. When the Company records a loss from operations, all potentially dilutive shares are anti-dilutive and are consequently excluded from the calculation of diluted net loss per common share. The impact of potentially dilutive securities during the three months ended June 30, 2019 did not have a material impact on the earnings per share of the Company. Revenue Recognition Oil sales Under the Company’s oil sales contracts, the Company sells oil production at the point of delivery and collects an agreed upon index price, net of pricing differentials. The Company recognizes revenue when control transfers to the purchaser at the point of delivery at the net price received. Payment is generally received from the customer in the month following delivery. Natural gas and natural gas liquids Under the Company’s natural gas sales processing contracts, the Company delivers commingled natural gas and natural gas liquids (NGLs) to a midstream processing entity. The midstream processing entity gathers and processes the various hydrocarbons and remits proceeds to the Company for the resulting sale. Under these processing agreements, the Company recognizes revenue when control transfers to the purchaser at the point of delivery. Payment is generally received from the customer one to two months following delivery. Disaggregation of Revenue. THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30, 2019 2018 2019 2018 Operating revenues Crude oil sales $ 5,549,270 $ 4,042,615 $ 9,728,216 $ 5,467,848 Natural gas sales 205,558 397,978 822,696 792,389 NGL sales 193,259 184,943 368,705 434,231 Total operating revenues $ 5,948,087 $ 4,625,536 $ 10,919,617 $ 6,694,468 Recently Adopted Accounting Pronouncements: In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2016-02, Leases (Topic 842), followed by other related ASUs that provided targeted improvements and additional practical expedient options (collectively “ASC 842”). ASC 842 requires lessees to recognize right-of-use (“ROU”) assets and lease payment liabilities on the balance sheet for leases representing the Company’s right to use the underlying assets over the lease term. Each lease that is recognized on the balance sheet is classified as either finance or operating, with such classification affecting the pattern and classification of expense recognition in the Statements of Operations Statements of Cash Flows The Company adopted ASC 842 on January 1, 2019 using the modified retrospective method. The Company elected as part of its adoption to also use the optional transition methodology whereby previously reported periods continue to be reported in accordance with historical accounting guidance for leases that were in effect for those prior periods. Policy elections and practical expedients that the Company has implemented as part of adopting ASC 842 include (a) excluding from the balance sheet leases with terms that are less than or equal to one year, (b) for all existing asset classes that contain both lease and non-lease components, combining these components together and accounting for them as a single lease component, (c) the package of practical expedients, which among other things, allows the Company to avoid reassessing contracts that commenced prior to adoption that were properly evaluated under legacy GAAP, and (d) excluding land easements, which were not accounted for under the previous leasing guidance, that existed or expired before adoption of ASC 842. The scope of ASC 842 does not apply to leases used in the exploration for minerals or use thereof, including oil, natural gas and natural gas liquids. The Company's adoption of ASC 842 resulted in an increase in other assets, accounts payable and accrued liabilities, and other liabilities line items on the accompanying Condensed Consolidated Balance Sheets

GOING CONCERN

GOING CONCERN	6 Months Ended
	Jun. 30, 2019
GOING CONCERN
GOING CONCERN	In the Report of the Independent Registered Public Accounting Firm as of and for the year ended December 31, 2018, the auditor included an explanatory paragraph concerning the Company’s ability to continue as a going concern. Pursuant to Accounting Standards Update (“ASU”) 2014-15, “Presentation of Financial Statements – Going Concern,” the Company has assessed its ability to continue as a going concern for a period of one year from the date of the issuance of these financial statements. Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity may be unable to meet its obligations as they become due within one year from the financial statement issuance date. The uncertainty regarding the Company’s ability to continue as a going concern as of June 30, 2019 is based on several capital resource and liquidity factors, including substantial near-term liabilities, significant accumulated deficit and negative working capital, among other factors. At June 30, 2019, the Company had a cash balance of approximately $3.8 million, other current assets of approximately $5.8 million and current liabilities of $42.8 million, resulting in negative working capital of $33.2 million. The Company had a net loss, including non-cash charges, of $4.1 million for the six months ended June 30, 2019. At June 30, 2019, the Company was in default on the outstanding principal balances of $9.4 million under both issues of convertible notes. The Company is also in default under the terms of the Secured Credit Facility (Note 6) and as a result, $14.3 million of outstanding principal is due. Some accounts payable obligations to vendors are past the due date and some of those vendors have filed liens on certain of the Company’s assets and commenced legal action to foreclose those liens. The Company has been unable to access the debt or equity markets to obtain any additional funding during 2019. Management has evaluated these conditions and determined that increased revenues from the Company’s operated properties may allow the Company to meet its obligations. However, to continue to execute its business plan, and meet its debt obligations, additional working capital will be required. As part of the analysis, the Company considered selective participation in certain operated drilling programs based on availability of working capital and the timing of production-related cash flows. There is uncertainty that management’s plans, if executed, will allow the Company to meet all of its obligations. As a result, there is substantial doubt about the Company’s ability to continue as a going concern for one year after the date the condensed consolidated financial statements are issued. The Company’s consolidated financial statements do not include any adjustments related to the realization of the carrying value of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	6 Months Ended
	Jun. 30, 2019
Fair Value Disclosures [Abstract]
FAIR VALUE MEASUREMENTS	ASC Topic 820, “Fair Value Measurements and Disclosures”, establishes a hierarchy for inputs used in measuring fair value for financial assets and liabilities that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions of what market participants would use in pricing the asset or liability based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of the inputs as follows: ● Level 1: Quoted prices available in active markets for identical assets or liabilities; ● Level 2: Quoted prices in active markets for similar assets and liabilities that are observable for the asset or liability; ● Level 3: Unobservable pricing inputs that are generally less observable from objective sources, such as discounted cash or valuation models. The financial assets and liabilities are classified in the Condensed Consolidated Balance Sheets based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. As disclosed in Note 6, the Secured Credit Facility contained embedded elements that required identification and quantification of fair value. The estimated fair values as of February 1, 2018, the closing date of the facility, are presented in Note 6. As of June 30, 2019, the estimated fair values of the Company’s financial liabilities are presented in the following table: June 30, 2019 Registration rights penalty derivative liability $ 90,325 Share purchase option derivative liability — Total $ 90,325 The following table presents a roll-forward of the fair value of the derivative liabilities associated with the Company’s Secured Credit Facility, categorized as Level 3: Six Months Ended June 30, 2019 Year Ended December 31, 2018 Beginning balance $ 241,800 $ — Additions — 1,670,017 Total (gains) or losses (realized / unrealized) Included in operations (151,475 ) (1,428,217 ) Included in other comprehensive income — — Ending Balance $ 90,325 $ 241,800 Estimated Fair Value of Financial Assets and Liabilities Not Measured at Fair Value The Company’s financial instruments consist primarily of cash, accounts receivable, accounts payable, and credit facility borrowings. The carrying values of cash, accounts receivable and accounts payable are representative of their fair values due to their short-term maturities. The carrying amount of the Company’s Secured Credit Facility approximates fair value as it bears interest at variable rates over the term of the loan.

CRUDE OIL AND NATURAL GAS PROPE

CRUDE OIL AND NATURAL GAS PROPERTIES	6 Months Ended
	Jun. 30, 2019
Oil and Gas Property [Abstract]
CRUDE OIL AND NATURAL GAS PROPERTIES	The Company’s oil and gas properties are located entirely within the State of Colorado in the United States. The net capitalized costs related to the Company’s crude oil and natural gas activities were as follows: June 30, December 31, 2019 2018 Proved oil and gas properties $ 41,992,807 $ 41,017,944 Unproved oil and gas properties (1) 1,531,515 2,055,752 Wells in progress (2) 252,607 1,194,114 Total capitalized costs 43,776,929 44,267,810 Accumulated DDA and impairment (3) (17,008,211 ) (14,395,458 ) Net capitalized costs $ 26,768,718 $ 29,872,352 (1) Unproved oil and gas properties represent unevaluated costs the Company excludes from the amortization base until proved reserves are established or impairment is determined. (2) Costs from wells in progress are excluded from the amortization base until production commences. (3) Includes the accumulated expenses for depletion, depreciation, and amortization (DDA) plus accumulated expenses for impairment. On February 27, 2019, the Company completed the sale of certain assets. Based upon the preliminary settlement statement, the $16.5 million sale price for the assets yielded net proceeds of approximately $15.3 million, after adjustments for title defects, inventory, reconciliation of other amounts payable and receivable from the buyer, and transaction costs of the sale. Final settlement of the transaction was scheduled for May 28, 2019. The Company provided the buyer a final settlement statement and final settlement is pending. All of the net proceeds from the sale were remitted to the Secured Lenders as required by the Secured Lenders and have been applied to reduce amounts allegedly owed by the Company under the Secured Credit Facility. Additional information about the use of proceeds from the sale can be found in Note 6. The assets were classified as Held for Sale as of December 31, 2018 and included as current assets in the financial statements. During the period from January 1, 2019 to February 27, 2019, the assets sold generated revenues of $1.1 million and operating expenses of $0.3 million, resulting in net operating income for those properties of $0.8 million. The terms of the transaction provide that 2019 revenues and expenses accrue to the benefit of the buyer, and accordingly, the Company recorded an adjustment of $0.8 million to the purchase price and the corresponding loss on sale of properties during the six months ended June 30, 2019.

DEBT

DEBT	6 Months Ended
	Jun. 30, 2019
Debt Disclosure [Abstract]
DEBT	10% Convertible Notes As of June 30, 2019, the 10% Convertible Notes had an outstanding principal balance of $4.6 million and are in default. The 10% Convertible Notes were not paid on their due date of December 31, 2018. The Company’s failure to retire the 10% Convertible Notes was an event of default. The Company has continued to accrue and pay interest at the rate of 10%, in the approximate amount of $0.1 million each calendar quarter. Series B Convertible Notes As of June 30, 2019, the Series B Convertible Notes had an outstanding principal balance of $4.7 million and are in default. The Series B Convertible Notes were not paid on their due date of December 31, 2018. The Company’s failure to retire the Series B Convertible Notes was an event of default. The Company has continued to accrue and pay interest at the rate of 15%, in the approximate amount of $0.2 million each calendar quarter. Secured Credit Facility On February 1, 2018, the Company closed on a $25.0 million Secured Credit Facility with Providence Wattenberg, LP and 5NR Wattenberg, LLC (“Secured Lenders”). The Secured Credit Facility incorporated certain provisions of a Letter Agreement entered into by the Company on December 21, 2017 under which the Company borrowed $5.0 million from the Secured Lenders. The closing on February 1, 2018 represented additional borrowings of $20.0 million. The Company is in default under certain provisions of the Secured Credit Facility. The default conditions included the non-payment of the 10% Convertible Notes and the Series B Convertible Notes on December 31, 2018, and non-payment of the underwriting fee payable to PEO on February 1, 2019. Other defaults related to non-payment of certain accounts payable and accrued liabilities within a 90-day allowable time period, liens filed in Adams County, Colorado against certain of the Company’s assets, among other conditions. On March 26, 2019, the Secured Lenders required that the Company pay to them the net proceeds from the Company’s sale of non-operated assets and subsequently applied the net proceeds of $15.3 from sale to the outstanding accrued interest, penalties and principal, resulting in a remaining principal balance of $14.3 million. On April 2, 2019, the Secured Lenders delivered their formal Notice of Default under the terms of the Secured Credit Facility to confirm their previous communications. The Secured Lenders have commenced foreclosure proceedings on the collateral assets. During the six months ended June 30, 2019, the Company amortized all of the remaining unamortized debt discounts associated with the Secured Credit Facility, which discounts had aggregated $4.8 million as of December 31, 2018. In light of the Secured Lenders demand to accelerate the maturity date of the Secured Credit Facility, it was appropriate to fully amortize the remaining discounts.

ASSET RETIREMENT OBLIGATION

ASSET RETIREMENT OBLIGATION	6 Months Ended
	Jun. 30, 2019
Asset Retirement Obligation [Abstract]
ASSET RETIREMENT OBLIGATION	The Company records an estimated liability to recognize the anticipated costs of its obligation to properly plug and abandon oil and gas wells at the end of their productive life. No new obligations were incurred during the six months ended June 30, 2019. The following table summarizes the changes in asset retirement obligations associated with the Company’s oil and gas properties for the periods presented: Six months ended Year ended June 30, December 31, 2019 2018 Asset retirement obligation, beginning of period $ 2,089,947 $ 1,123,444 Liabilities settled (130,906 ) (192,996 ) Liabilities incurred — 58,511 Revisions in estimated liabilities — 983,352 Accretion 121,821 117,636 Asset retirement obligation, end of period $ 2,080,862 $ 2,089,947 Current liability $ 1,430,985 $ 843,796 Long-term liability $ 649,877 $ 1,246,151

ACCOUNTS PAYABLE AND ACCRUED LI

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES, EXCLUDING RELATED PARTIES	6 Months Ended
	Jun. 30, 2019
Payables and Accruals [Abstract]
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES, EXCLUDING RELATED PARTIES	Accounts payable and accrued liability balances were comprised of the following: June 30, December 31, 2019 2018 Trade payables and accrued liabilities $ 4,501,274 $ 2,093,428 Liabilities incurred in connection with development of crude oil and natural gas properties 10,352,922 22,291,989 Total $ 14,854,196 $ 24,385,417

SHAREHOLDERS' EQUITY (DEFICIT)

SHAREHOLDERS' EQUITY (DEFICIT)	6 Months Ended
	Jun. 30, 2019
Shareholders' (deficit):
SHAREHOLDERS' EQUITY (DEFICIT)	Common Stock Activity for the six months ended June 30, 2019 included the following: On March 15, 2019, at a special meeting, the shareholders of the Company approved an amendment to the Company’s Articles of Incorporation (“Amendment”) to increase the authorized common stock from 100,000,000 shares to 200,000,000 shares. The Amendment was effective on March 20, 2019 upon filing the Amendment with the Colorado Secretary of State. Activity for the six months ended June 30, 2018 included the following: On February 23, 2018, the Company issued 70,000 shares of common stock at $1.00 per share in lieu of cash compensation. On March 12, 2018, the Company issued 135,963 shares of common stock in connection with the conversion of 10% convertible notes payable in the principal amount of $200,000 plus accrued interest. The shares were issued at the contractual rate of $1.50 per share. On April 18, 2018, the Company issued 75,000 shares of common stock valued at $1.23 per share in connection with the appointment of three new members to its Board of Directors. On June 1, 2018, the Company issued 65,000 shares of common stock valued $1.40 per share to employees of the Company as compensation. All vesting rights associated with the shares have been satisfied. Warrants The table below summarizes warrants outstanding as of June 30, 2019: Shares Exercise Underlying Price Outstanding Per Expiration Warrants Share Date Underwriter warrants 255,600 $ 1.25 11/12/2020 Investor warrants 6,666,600 $ 3.00 12/31/2019 Placement agent warrants 666,600 $ 1.50 12/31/2021 Secured Credit Facility Warrants 1,500,000 $ 0.01 2/1/2020 Total 9,088,800 Activity for the six months ended June 30, 2018 included the following: On February 1, 2018, in connection with the closing of the Secured Credit Facility, the Company issued 1,500,000 common stock purchase warrants. The warrants are exercisable at $0.01 per share and expire on February 1, 2020. (Notes 6 and 11).

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	6 Months Ended
	Jun. 30, 2019
Share-based Payment Arrangement [Abstract]
STOCK-BASED COMPENSATION	On August 18, 2016, the Company’s Board of Directors adopted the Amended and Restated PetroShare Corp. Equity Incentive Plan (the “Plan”). The Plan terminates on August 17, 2026. Among other things, the Plan increased the number of shares of common stock reserved for issuance thereunder from 5,000,000 to 10,000,000. The Company’s shareholders approved the Plan at the Company’s annual meeting of shareholders on September 8, 2016. No additional shares were granted under the Plan for the six months ended June 30, 2019. As of June 30, 2019, the amount of future compensation expense related to unvested restricted stock grants was nil. On March 1, 2018, the Company issued options to purchase 325,000 shares of the Company’s common stock, which options are exercisable at $1.03 per share. The options were issued to employees and an officer of the Company and are exercisable at any time on or before March 1, 2023. On April 18, 2018, the Company issued options to purchase 75,000 shares of the Company's common stock, which options are exercisable at $1.23 per share. The options were issued to directors of the Company. The options may be exercised at any time on or before December 31, 2022. A summary of options outstanding under the Plan at June 30, 2019 is as follows: Weighted Remaining Average Contractual Number of Exercise Term Shares Price (Years) Outstanding, December 31, 2018 5,037,000 $ 0.79 3.87 Exercisable, December 31, 2018 4,621,000 $ 0.75 3.86 Granted — — — Exercised — — — Forfeited — — — Outstanding, June 30, 2019 5,037,000 $ 0.79 3.38 Exercisable, June 30, 2019 5,037,000 $ 0.79 3.38 As of June 30, 2019, the amount of future compensation expense related to unvested stock option grants was nil. Total stock based compensation expense, including restricted stock grants, stock options, and other equity based compensation, for the three months ended June 30, 2019 and 2018 was $45,425 and $0.4 million, respectively. Total stock based compensation expense, including restricted stock grants, stock options, and other equity based compensation, for the six months ended June 30, 2019 and 2018 was $0.2 million and $0.7 million, respectively.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	6 Months Ended
	Jun. 30, 2019
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	Providence Energy Operators (“PEO”) and Affiliates As of June 30, 2019, PEO beneficially owned approximately 11.6% of the Company’s outstanding common stock. The table below summarizes related party balances with PEO and its affiliates as of: June 30, 2019 December 31, 2018 Liabilities Revenue distribution payable and accrued liabilities $ (3,448 ) $ (2,133,622 ) Secured Credit Facility (14,299,436 ) (25,000,000 ) Loan commitment fee – Secured Credit Facility — (1,250,000 ) Default penalty interest – Secured Credit Facility — (312,500 ) Make-whole premium – Secured Credit Facility — (3,347,874 ) Break-up fee payable, participation agreement — (580,881 ) Assets Accounts receivable – joint interest billing $ 102,324 $ 1,158,213 Secured Credit Facility As a result of defaults under the Secured Credit Facility, the Company accrued additional penalty interest and the make-whole premium was recorded as of December 31, 2018. Total interest expense related to the Secured Credit Facility, including the accrual of additional penalty interest and make-whole premium and the accretion of debt discounts, of $nil and $4.8 million was recognized during the three and six months ended June 30, 2019 respectively. On March 26, 2019, Secured Lenders notified the Company that they were applying the net proceeds from the February 27, 2019 non-operated property sale (Note 5) against the make-whole premium, accrued default interest, other outstanding liabilities and the outstanding principal balance of the Secured Credit Facility (Note 6). The table below presents the application of the proceeds from the property sale: Principal Balance December 31, 2018 $ 25,000,000 Total Sale Proceeds Received 15,538,766 Less Accrued broker fees (250,000 ) Expenses (17,702 ) Available cash 15,271,064 Underwriting fee (1,250,000 ) January 2019 default interest (105,706 ) February 2019 interest (452,865 ) March 1, 2019 - March 26, 2019 interest (377,768 ) Make-whole premium (2,384,161 ) Allocated to Principal 10,700,564 Remaining Principal Balance June 30, 2019 $ 14,299,436 Operations At June 30, 2019, the Company has recorded $0.1 million in Accounts receivable – joint interest billing – related party Included in the balance sheet caption Accounts payable and accrued liabilities - related party 10% Convertible Notes As of June 30, 2019 and December 31, 2018, the principal balance of the 10% Convertible Notes held by officers and directors amounted to $0.1 million and $0.1 million respectively. Interest expense for the three and six months ended June 30, 2019 and 2018 amounted to $2,000 and $4,000 respectively. Series B Convertible Notes As of June 30, 2019 and December 31, 2018, the principal balance of the Series B Convertible Notes held by officers and directors amounted to $0.6 million and $0.6 million respectively. Interest expense for the three and six months ended June 30, 2019 and 2018 amounted to $21,375 and $42,750 respectively.

LEASES

LEASES	6 Months Ended
	Jun. 30, 2019
Leases [Abstract]
LEASES	Operating Lease The Company evaluates contractual arrangements at inception to determine if individual agreements are a lease or contain an identifiable lease component as defined by ASC 842. The Company currently has one contract that meets the definition of a long-term lease. The Company leases its office facilities under a four-year non-cancelable operating lease agreement expiring in March 2021. Annual payments approximate $0.1 million. Operating lease costs for the three months and six months ended June 30, 2019 were less than $0.1 million.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2019
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	As disclosed in our Quarterly Report for the Quarterly period ended March 31, 2019, Providence Wattenberg, LP, as administrative agent for the lenders under that certain Secured Credit Agreement dated February 1, 2018 (“Credit Agreement”), commenced a Public Trustee’s foreclosure under the Deed of Trust Securing our obligations under the Credit Agreement. On July 16, 2019, the District Court in Adams County issued its order approving the Public Trustee’s sale in accordance with the applicable procedural rules. The sale is currently scheduled for August 27, 2019. See Part II. Other Information, Item 1 Legal Proceedings for additional discussion.

BASIS OF PRESENTATION AND SUM_2

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (Policies)	6 Months Ended
	Jun. 30, 2019
Accounting Policies [Abstract]
Basis of Presentation	The interim condensed consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures included herein are adequate to make the information presented not misleading. These interim 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, 2018. Unless otherwise noted in this Interim Report, there have been no material changes to the disclosures contained in the notes to the audited financial statements for the year ended December 31, 2018. The Condensed Consolidated Balance Sheet as of December 31, 2018 was derived from the audited financial statements included in the Company’s Annual Report on Form 10-K. In management’s opinion, the unaudited interim Condensed Consolidated Balance Sheet, Statements of Operations, Statements of Changes in Shareholders’ Equity (Deficit), and Statements of Cash Flows, contained herein, reflect all adjustments, consisting solely of normal recurring items, which are necessary for the fair presentation of the Company’s financial position, results of operations and cash flows on a basis consistent with that of the Company’s prior audited consolidated financial statements. The results of operations for the interim periods may not be indicative of results to be expected for the full fiscal year. Certain prior period amounts were reclassified to conform to the current presentation on the Condensed Consolidated Financial Statements.
Principles of Consolidation	The consolidated financial statements include the accounts and balances of the Company and its wholly-owned subsidiary, CFW Resources, LLC, a Colorado limited liability company. The Company’s undivided interests in joint operating ventures are proportionately consolidated.
Use of Estimates	The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, as well as the disclosure of contingent assets and liabilities. Estimated quantities of crude oil, natural gas and natural gas liquids are the most significant of the Company’s estimates. All reserve data used in the preparation of these condensed consolidated financial statements are based on estimates. Reservoir engineering is a subjective process of estimating underground accumulations of crude oil, natural gas and natural gas liquids. There are numerous uncertainties inherent in estimating quantities of proved, probable and possible reserves. The accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation and judgment. As a result, reserve estimates may be different from the quantities of crude oil, natural gas and natural gas liquids that are ultimately recovered.
Income (Loss) Per Share	Basic earnings or loss per share is computed by dividing net income or loss by the weighted average number of common shares outstanding during the period. Diluted earnings or loss per common share is calculated by dividing net income or loss available to common stockholders by the diluted weighted-average number of common shares outstanding, which includes the effect of potentially dilutive securities. Potentially dilutive securities for this calculation consist primarily of warrants, outstanding options, and shares into which the convertible notes are convertible. When the Company records a loss from operations, all potentially dilutive shares are anti-dilutive and are consequently excluded from the calculation of diluted net loss per common share. The impact of potentially dilutive securities during the three months ended June 30, 2019 did not have a material impact on the earnings per share of the Company.
Revenue Recognition	Oil sales Under the Company’s oil sales contracts, the Company sells oil production at the point of delivery and collects an agreed upon index price, net of pricing differentials. The Company recognizes revenue when control transfers to the purchaser at the point of delivery at the net price received. Payment is generally received from the customer in the month following delivery. Natural gas and natural gas liquids Under the Company’s natural gas sales processing contracts, the Company delivers commingled natural gas and natural gas liquids (NGLs) to a midstream processing entity. The midstream processing entity gathers and processes the various hydrocarbons and remits proceeds to the Company for the resulting sale. Under these processing agreements, the Company recognizes revenue when control transfers to the purchaser at the point of delivery. Payment is generally received from the customer one to two months following delivery. Disaggregation of Revenue. THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30, 2019 2018 2019 2018 Operating revenues Crude oil sales $ 5,549,270 $ 4,042,615 $ 9,728,216 $ 5,467,848 Natural gas sales 205,558 397,978 822,696 792,389 NGL sales 193,259 184,943 368,705 434,231 Total operating revenues $ 5,948,087 $ 4,625,536 $ 10,919,617 $ 6,694,468
Recently Issued Accounting Pronouncements	In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2016-02, Leases (Topic 842), followed by other related ASUs that provided targeted improvements and additional practical expedient options (collectively “ASC 842”). ASC 842 requires lessees to recognize right-of-use (“ROU”) assets and lease payment liabilities on the balance sheet for leases representing the Company’s right to use the underlying assets over the lease term. Each lease that is recognized on the balance sheet is classified as either finance or operating, with such classification affecting the pattern and classification of expense recognition in the Statements of Operations Statements of Cash Flows The Company adopted ASC 842 on January 1, 2019 using the modified retrospective method. The Company elected as part of its adoption to also use the optional transition methodology whereby previously reported periods continue to be reported in accordance with historical accounting guidance for leases that were in effect for those prior periods. Policy elections and practical expedients that the Company has implemented as part of adopting ASC 842 include (a) excluding from the balance sheet leases with terms that are less than or equal to one year, (b) for all existing asset classes that contain both lease and non-lease components, combining these components together and accounting for them as a single lease component, (c) the package of practical expedients, which among other things, allows the Company to avoid reassessing contracts that commenced prior to adoption that were properly evaluated under legacy GAAP, and (d) excluding land easements, which were not accounted for under the previous leasing guidance, that existed or expired before adoption of ASC 842. The scope of ASC 842 does not apply to leases used in the exploration for minerals or use thereof, including oil, natural gas and natural gas liquids. The Company's adoption of ASC 842 resulted in an increase in other assets, accounts payable and accrued liabilities, and other liabilities line items on the accompanying Condensed Consolidated Balance Sheets

BASIS OF PRESENTATION AND SUM_3

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (Tables)	6 Months Ended
	Jun. 30, 2019
Accounting Policies [Abstract]
Disaggregation of revenue	THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30, 2019 2018 2019 2018 Operating revenues Crude oil sales $ 5,549,270 $ 4,042,615 $ 9,728,216 $ 5,467,848 Natural gas sales 205,558 397,978 822,696 792,389 NGL sales 193,259 184,943 368,705 434,231 Total operating revenues $ 5,948,087 $ 4,625,536 $ 10,919,617 $ 6,694,468

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	6 Months Ended
	Jun. 30, 2019
Fair Value Disclosures [Abstract]
Fair value measurements	June 30, 2019 Registration rights penalty derivative liability $ 90,325 Share purchase option derivative liability — Total $ 90,325
Schedule of roll-forward of the fair value of the derivative liabilities associated with Company's Secured Credit Facility, categorized as Level 3	Six Months Ended June 30, 2019 Year Ended December 31, 2018 Beginning balance $ 241,800 $ — Additions — 1,670,017 Total (gains) or losses (realized / unrealized) Included in operations (151,475 ) (1,428,217 ) Included in other comprehensive income — — Ending Balance $ 90,325 $ 241,800

CRUDE OIL AND NATURAL GAS PRO_2

CRUDE OIL AND NATURAL GAS PROPERTIES (Tables)	6 Months Ended
	Jun. 30, 2019
Oil and Gas Property [Abstract]
Schedule of net capitalized costs	June 30, December 31, 2019 2018 Proved oil and gas properties $ 41,992,807 $ 41,017,944 Unproved oil and gas properties (1) 1,531,515 2,055,752 Wells in progress (2) 252,607 1,194,114 Total capitalized costs 43,776,929 44,267,810 Accumulated DDA and impairment (3) (17,008,211 ) (14,395,458 ) Net capitalized costs $ 26,768,718 $ 29,872,352 (1) Unproved oil and gas properties represent unevaluated costs the Company excludes from the amortization base until proved reserves are established or impairment is determined. (2) Costs from wells in progress are excluded from the amortization base until production commences. (3) Includes the accumulated expenses for depletion, depreciation, and amortization (DDA) plus accumulated expenses for impairment.

ASSET RETIREMENT OBLIGATION (Ta

ASSET RETIREMENT OBLIGATION (Tables)	6 Months Ended
	Jun. 30, 2019
Asset Retirement Obligation [Abstract]
Reconciliation of the asset retirement obligation	Six months ended Year ended June 30, December 31, 2019 2018 Asset retirement obligation, beginning of period $ 2,089,947 $ 1,123,444 Liabilities settled (130,906 ) (192,996 ) Liabilities incurred — 58,511 Revisions in estimated liabilities — 983,352 Accretion 121,821 117,636 Asset retirement obligation, end of period $ 2,080,862 $ 2,089,947 Current liability $ 1,430,985 $ 843,796 Long-term liability $ 649,877 $ 1,246,151

ACCOUNTS PAYABLE AND ACCRUED _2

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES, EXCLUDING RELATED PARTIES (Tables)	6 Months Ended
	Jun. 30, 2019
Payables and Accruals [Abstract]
Components of accounts payable and accrued liabilities, excluding related parties	June 30, December 31, 2019 2018 Trade payables and accrued liabilities $ 4,501,274 $ 2,093,428 Liabilities incurred in connection with development of crude oil and natural gas properties 10,352,922 22,291,989 Total $ 14,854,196 $ 24,385,417

SHAREHOLDERS' EQUITY (DEFICIT)

SHAREHOLDERS' EQUITY (DEFICIT) (Tables)	6 Months Ended
	Jun. 30, 2019
Shareholders' (deficit):
Summary of warrants outstanding	Shares Exercise Underlying Price Outstanding Per Expiration Warrants Share Date Underwriter warrants 255,600 $ 1.25 11/12/2020 Investor warrants 6,666,600 $ 3.00 12/31/2019 Placement agent warrants 666,600 $ 1.50 12/31/2021 Secured Credit Facility Warrants 1,500,000 $ 0.01 2/1/2020 Total 9,088,800

STOCK BASED COMPENSATION (Table

STOCK BASED COMPENSATION (Tables)	6 Months Ended
	Jun. 30, 2019
Share-based Payment Arrangement [Abstract]
Summary of stock option activity	Weighted Remaining Average Contractual Number of Exercise Term Shares Price (Years) Outstanding, December 31, 2018 5,037,000 $ 0.79 3.87 Exercisable, December 31, 2018 4,621,000 $ 0.75 3.86 Granted — — — Exercised — — — Forfeited — — — Outstanding, June 30, 2019 5,037,000 $ 0.79 3.38 Exercisable, June 30, 2019 5,037,000 $ 0.79 3.38

RELATED PARTY TRANSACTIONS (Tab

RELATED PARTY TRANSACTIONS (Tables)	6 Months Ended
	Jun. 30, 2019
Related Party Transactions [Abstract]
Related party balances	June 30, 2019 December 31, 2018 Liabilities Revenue distribution payable and accrued liabilities $ (3,448 ) $ (2,133,622 ) Secured Credit Facility (14,299,436 ) (25,000,000 ) Loan commitment fee – Secured Credit Facility — (1,250,000 ) Default penalty interest – Secured Credit Facility — (312,500 ) Make-whole premium – Secured Credit Facility — (3,347,874 ) Break-up fee payable, participation agreement — (580,881 ) Assets Accounts receivable – joint interest billing $ 102,324 $ 1,158,213
Use of proceeds	Principal Balance December 31, 2018 $ 25,000,000 Total Sale Proceeds Received 15,538,766 Less Accrued broker fees (250,000 ) Expenses (17,702 ) Available cash 15,271,064 Underwriting fee (1,250,000 ) January 2019 default interest (105,706 ) February 2019 interest (452,865 ) March 1, 2019 - March 26, 2019 interest (377,768 ) Make-whole premium (2,384,161 ) Allocated to Principal 10,700,564 Remaining Principal Balance June 30, 2019 $ 14,299,436

BASIS OF PRESENTATION AND SUM_4

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Revenues	$ 5,948,087	$ 4,625,536	$ 10,919,617	$ 6,694,468
Crude Oil [Member]
Revenues	5,549,270	4,042,615	9,728,216	5,467,848
Natural Gas Excluding Natural Gas Liquids [Member]
Revenues	205,558	397,978	822,696	792,389
Natural Gas Liquids [Member]
Revenues	$ 193,259	$ 184,943	$ 368,705	$ 434,231

GOING CONCERN (Details Narrativ

GOING CONCERN (Details Narrative) - USD ($)	3 Months Ended				6 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018	Dec. 31, 2017
GOING CONCERN
Cash	$ 3,758,009		$ 1,379,283		$ 3,758,009	$ 1,379,283	$ 2,636,943	$ 713,924
Other current assets	5,800,000				5,800,000
Current liabilities	42,764,105				42,764,105		65,137,349
Working capital	(33,200,000)				(33,200,000)
Net income (loss)	1,523,840	$ (5,604,040)	$ (110,074)	$ (1,487,743)	(4,080,200)	$ (1,597,819)
Convertible notes payable	9,358,100				9,358,100		9,358,100
Secured credit facility - related party	$ 14,299,436				$ 14,299,436		$ 20,182,264

FAIR VALUE MEASUREMENTS (Detail

FAIR VALUE MEASUREMENTS (Details)	Jun. 30, 2019USD ($)
Fair Value Disclosures [Abstract]
Registration rights penalty derivative liability	$ 90,325
Share purchase option derivative liability	0
Total	$ 90,325

FAIR VALUE MEASUREMENTS (Deta_2

FAIR VALUE MEASUREMENTS (Details 1) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Fair Value Disclosures [Abstract]
Beginning balance	$ 241,800	$ 0
Additions	0	1,670,017
Included in operations	(151,475)	(1,428,217)
Included in other comprehensive income	0	0
Ending balance	$ 90,325	$ 241,800

CRUDE OIL AND NATURAL GAS PRO_3

CRUDE OIL AND NATURAL GAS PROPERTIES (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Oil and Gas Property [Abstract]
Proved oil and gas properties	$ 41,992,807	$ 41,017,944
Unproved oil and gas properties	1,531,515	2,055,752
Wells in progress	252,607	1,194,114
Total capitalized costs	43,776,929	44,267,810
Accumulated depletion, depreciation and amortization	(17,008,211)	(14,395,458)
Net capitalized costs	$ 26,768,718	$ 29,872,352

ASSET RETIREMENT OBLIGATION (De

ASSET RETIREMENT OBLIGATION (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Activity of asset retirement obligation
Asset retirement obligation, beginning of period			$ 2,089,947	$ 1,123,444	$ 1,123,444
Liabilities settled			(130,906)		(192,666)
Liabilities incurred			0		58,511
Revisions in estimated liabilities			0		983,352
Accretion	$ 60,037	$ 27,255	121,821	$ 55,612	117,636
Asset retirement obligation, end of period	2,080,862		2,080,862		2,089,947
Current liability	1,430,985		1,430,985		843,796
Long-term liability	$ 649,877		$ 649,877		$ 1,246,151

ACCOUNTS PAYABLE AND ACCRUED _3

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES, EXCLUDING RELATED PARTIES (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Payables and Accruals [Abstract]
Trade accounts payable and accrued liabilities	$ 4,501,274	$ 2,093,428
Liabilities incurred in connection with acquisition of crude oil and natural gas properties	10,352,922	22,291,989
Total	$ 14,854,196	$ 24,385,417

SHAREHOLDERS' EQUITY (DEFICIT_2

SHAREHOLDERS' EQUITY (DEFICIT) (Details)	Jun. 30, 2019$ / sharesshares
Warrants
Shares underlying outstanding warrants	9,088,800
Underwriter Warrants [Member]
Warrants
Shares underlying outstanding warrants	255,600
Warrants exercise price | $ / shares	$ 1.25
Investor Warrants [Member]
Warrants
Shares underlying outstanding warrants	6,666,600
Warrants exercise price | $ / shares	$ 3
Placement Agent Warrants [Member]
Warrants
Shares underlying outstanding warrants	666,600
Warrants exercise price | $ / shares	$ 1.50
Secured Credit Facility Warrants [Member]
Warrants
Shares underlying outstanding warrants	1,500,000
Warrants exercise price | $ / shares	$ .01

STOCK-BASED COMPENSATION (Detai

STOCK-BASED COMPENSATION (Details) - $ / shares	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Number of Shares
Outstanding Options, Beginning of period	4,621,000
Options Granted	0
Options Exercised	0
Options Forfeited	0
Outstanding Options, End of period	5,037,000
Options Exercisable	5,037,000	5,037,000
Weighted Average Exercise Price
Outstanding, Beginning, Weighted-Average Exercise Price	$ .75
Granted	.00
Exercised	.00
Forfeited	.00
Outstanding, Ending, Weighted-Average Exercise Price	.79
Exercisable	$ .79	$ .79
Remaining Contractual Term (Years)
Outstanding, Beginning	3 years 10 months 13 days
Outstanding, Ending	3 years 4 months 17 days
Exercisable	3 years 4 months 17 days

STOCK-BASED COMPENSATION (Det_2

STOCK-BASED COMPENSATION (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Share-based Payment Arrangement [Abstract]
Stock-based compensation expense	$ 45,424	$ 400,000	$ 200,000	$ 700,000

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Revenue distribution payable and accrued liabilities
Related party transactions	$ (3,448)	$ (2,133,622)
Senior Secured Credit Facility
Related party transactions	(14,299,436)	(2,500,000)
Loan commitment fee - Senior Secured Credit Facility
Related party transactions	0	(1,250,000)
Default penalty interest - Senior Secured Credit Facility
Related party transactions	0	(312,500)
Make-whole premium - Secured Credit Facility
Related party transactions	0	(3,347,874)
Break-up fee payable, participation agreement
Related party transactions	0	(580,881)
Accounts receivable
Related party transactions	$ 102,324	$ 1,158,213

RELATED PARTY TRANSACTIONS (D_2

RELATED PARTY TRANSACTIONS (Details 1) - USD ($)	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Related Party Transactions [Abstract]
Principal balance, beginning	$ 25,000,000
Total sale proceeds received	15,538,766
Less: accrued broker fees	(250,000)
Less: expenses	(17,702)
Available cash	15,271,064
Underwriting fee	(1,250,000)
January 2019 default interest	(105,706)
February 2019 interest	(452,865)
March 1, 2019 - March 26, 2019 interest	(377,768)
Make-whole premium	(2,384,161)
Allocated to principal	10,700,564
Principal balance, ending	$ 14,299,436	$ 20,182,264

RELATED PARTY TRANSACTIONS (D_3

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019	Dec. 31, 2018
Related Party Transactions [Abstract]
Interest expense, related party	$ 0	$ 4,800,000
Accounts receivable - joint interest billing - related party	102,324	102,324	$ 1,158,213
Accounts payable and accrued liabilities - related party	$ 3,448	$ 3,448	$ 7,624,877