Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Feb. 28, 2019 | Jun. 12, 2019 | Aug. 31, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | Norris Industries, Inc. | ||
Entity Central Index Key | 0001603793 | ||
Document Type | 10-K | ||
Document Period End Date | Feb. 28, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --02-28 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | false | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding | 89,443,013 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 |
Current Assets | ||
Cash | $ 125,755 | $ 244,997 |
Account receivable - oil & gas | 71,132 | 108,644 |
Total Current Assets | 196,887 | 353,641 |
Oil and Gas Property - Full Cost Method | ||
Properties subject to amortization | 2,716,102 | 2,716,102 |
Less: accumulated depletion | (259,292) | (69,760) |
Total Oil and Gas Property, net | 2,456,810 | 2,646,342 |
Equipment, net | 7,746 | 12,646 |
Total Assets | 2,661,443 | 3,012,629 |
Current Liabilities | ||
Accounts payable and accrued expenses | 32,549 | 43,020 |
Accounts payable and accrued expenses - related parties | 69,189 | 20,412 |
Total Current Liabilities | 101,738 | 63,432 |
Convertible note payable - related party | 1,850,000 | 1,550,000 |
Asset retirement obligations | 92,850 | 76,657 |
Total Liabilities | 2,044,588 | 1,690,089 |
Stockholders' Equity | ||
Preferred stock, value | ||
Common stock, $0.001 par value per share, 150,000,000 shares authorized; 89,443,013 and 89,443.013 shares issued and outstanding | 89,443 | 89,443 |
Additional paid-in capital | 6,183,483 | 5,967,483 |
Accumulated deficit | (5,657,071) | (4,735,386) |
Total Stockholder's Equity | 616,855 | 1,322,540 |
Total Liabilities and Stockholders' Equity | 2,661,443 | 3,012,629 |
Series A Convertible Preferred Stock [Member] | ||
Stockholders' Equity | ||
Preferred stock, value | $ 1,000 | $ 1,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 89,443,013 | 89,443,013 |
Common stock, shares outstanding | 89,443,013 | 89,443,013 |
Series A Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding | 1,000,000 | 1,000,000 |
Preferred stock, liquidation preference | $ 2,250,000 | $ 2,250,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Revenues | ||
Total Revenues | $ 499,074 | $ 131,943 |
Operating Expenses | ||
Lease operating expenses | 279,815 | 131,626 |
General and administrative expenses | 878,051 | 1,273,147 |
Depletion and accretion | 210,625 | 24,146 |
Total Operating Expenses | 1,368,491 | 1,428,919 |
Loss from Operations | (869,417) | (1,296,976) |
Other Income (Expenses) | ||
Loss on extinguishment of debt | (1,228,322) | |
Interest expense | (52,268) | (23,648) |
Total Other Expense | (52,268) | (1,251,970) |
Net Loss | $ (921,685) | $ (2,548,946) |
Net loss per common share - basic and diluted | $ (0.01) | $ (0.03) |
Weighted average number of common shares outstanding - basic and diluted | 89,443,013 | 89,211,013 |
Oil and Gas Sales [Member] | ||
Revenues | ||
Total Revenues | $ 499,074 | $ 131,943 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity - USD ($) | Series A Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Feb. 28, 2017 | $ 48,696 | $ 2,791,328 | $ (2,186,440) | $ 653,584 | |
Balance, shares at Feb. 28, 2017 | 48,696,013 | ||||
Stock-based compensation | $ 315 | 482,837 | 483,152 | ||
Stock-based compensation, shares | 315,000 | ||||
Common stock issued for settlement of stock payable | $ 12 | 11,988 | 12,000 | ||
Common stock issued for settlement of stock payable, shares | 12,000 | ||||
Common stock issued for cash | $ 34,520 | 330,480 | 365,000 | ||
Common stock issued for cash, shares | 34,520,000 | ||||
Common stock issued for loan payable | $ 5,900 | 1,601,850 | 1,607,750 | ||
Common stock issued for loan payable, shares | 5,900,000 | ||||
Preferred stock issued for loan payable | $ 1,000 | 749,000 | 750,000 | ||
Preferred stock issued for loan payable, shares | 1,000,000 | ||||
Net loss | (2,548,946) | (2,548,946) | |||
Balance at Feb. 28, 2018 | $ 1,000 | $ 89,443 | 5,967,483 | (4,735,386) | 1,322,540 |
Balance, shares at Feb. 28, 2018 | 1,000,000 | 89,443,013 | |||
Stock-based compensation | 216,000 | 216,000 | |||
Net loss | (921,685) | (921,685) | |||
Balance at Feb. 28, 2019 | $ 1,000 | $ 89,443 | $ 6,183,483 | $ (5,657,071) | $ 616,855 |
Balance, shares at Feb. 28, 2019 | 1,000,000 | 89,443,013 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Cash Flow from Operating Activities | ||
Net loss | $ (921,685) | $ (2,548,946) |
Adjustments to reconcile net loss to net cash from operating activities: | ||
Depletion and accretion | 210,625 | 24,146 |
Stock-based compensation | 216,000 | 483,152 |
Loss on extinguishment of debt | 1,228,322 | |
Loss on write-off of investment | 5,000 | |
Changes in operating assets and liabilities: | ||
Accounts receivable - oil & gas | 37,512 | (100,474) |
Accounts payable and accrued expenses | (10,471) | 42,020 |
Accounts payable and accrued expenses - related parties | 48,777 | 20,412 |
Net Cash Used in Operating Activities | (419,242) | (846,368) |
Cash Flow from Investing Activities | ||
Purchase of oil and gas properties | (1,600,000) | |
Net Cash used in Investing Activities | (1,600,000) | |
Cash Flow from Financing Activities | ||
Proceeds from convertible note payable - related party | 300,000 | 2,300,000 |
Payment on loan payable | (50,000) | |
Common stock issued for cash | 365,000 | |
Net Cash provided by Financing Activities | 300,000 | 2,615,000 |
Net Increase (Decrease) in Cash | (119,242) | 168,632 |
Cash - beginning of year | 244,997 | 76,365 |
Cash - end of year | 125,755 | 244,997 |
Supplemental Cash Flow Information | ||
Cash paid for income taxes | ||
Cash paid for interest | 4,000 | |
Noncash Investing and Financing Activities | ||
Reclassification of pre-acquisition costs to oil and gas properties | 100,000 | |
Common stock issued for conversion of loan | 1,607,750 | |
Issuance of common stock for stock payable | 12,000 | |
Series A Convertible Preferred Stock issued for conversion of loan | 750,000 | |
Change of estimate in asset retirement obligation | 31,081 | |
Asset retirement obligation from acquisition of oil and gas properties | $ 29,705 |
Organization, Nature of Operati
Organization, Nature of Operations and Summary of Significant Accounting Policies | 12 Months Ended |
Feb. 28, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Nature of Operations and Summary of Significant Accounting Policies | Note 1 – Organization, Nature of Operations and summary of Significant Accounting Policies Norris Industries, Inc. (“NRIS” or the “Company”) (formerly International Western Petroleum, Inc.), was incorporated on February 19, 2014 as a Nevada corporation. The Company was formed to conduct operations in the oil and gas industry. The Company’s principal operating properties are in the Ellenberger formation in Coleman County, and in Jack County and Palo-Pinto County. Texas. The Company’s production operations are all located in the State of Texas. On April 25, 2018, the Company incorporated a Texas registered subsidiary, Norris Petroleum, Inc., as its own operating entity. Basis of Presentation The accompanying financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules of the Securities and Exchange Commission (“SEC”). The Company’s consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and entities in which the Company has a controlling financial interest. All significant inter-company accounts and transactions have been eliminated in consolidation. Liquidity and Capital Considerations The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the issuance date of these consolidated financial statements. The Company has incurred continuing losses since 2016, including a loss of approximately $922,000 for the fiscal year ended February 28, 2019. During the fiscal year ended February 28, 2019, the Company received $300,000 in funding from its credit line, and reduced its general and administrative costs, increased revenues, and incurred cash losses of approximately $419,000 from its operating activities. Further, as of February 28, 2019, the Company had $700,000 available to borrow under its existing credit line with JBB, and cash balance of approximately $125,000 and net working capital of approximately $95,000. The Company drew an additional $100,000 on its line of credit subsequent to year-end. The Company’s principal capital and exploration expenditures during next fiscal year are expected to relate to selected well workovers on its Jack and Palo Pinto County acreages. The Company believes that it has the ability to fund its costs for such expenditures from cash on-hand and available funds from its line of credit. The Company believes that it has sufficient working capital and in-place financing to fund its expected operational losses for twelve months following the issuance of these financial statements. In the event that the Company required additional capital to fund higher operational losses, or oil and gas property leases purchases for fiscal year ending February 28, 2020, the Company expects to seek additional capital from one or more sources via sales of restricted private placement of sales of equity and debt securities from those other than JBB. However, there can be no assurance that the Company would be able to secure the necessary capital to fund its costs on acceptable terms, or at all. If, for any reason, the Company is unable to fund its operations, it would have to undertake other aggressive cost cutting measures and then be subject to possible loss of some of its rights and interests in prospects to curtail operations and forced to forego opportunities or in worst case, cease operations. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expense during the period. Actual results could differ from those estimates. Risks and Uncertainties The Company’s operations are subject to significant risks and uncertainties, including financial, operational, technological, and other risks associated with operating an emerging business, including the potential risk of business failure. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of the year or less to be cash equivalents. The Company has not experienced any losses on its deposits of cash and cash equivalents . Oil and Gas Properties, Full Cost Method The Company follows the full cost method of accounting for its oil gas properties, whereby all costs incurred in connection with the acquisition, exploration for and development of petroleum and natural gas reserves are capitalized. Such costs include lease acquisition, geological and geophysical activities, rentals on non-producing leases, drilling, completing and equipping of oil wells and administrative costs directly attributable to those activities and asset retirement costs. Disposition of oil properties are accounted for as a reduction of capitalized costs, with no gain or loss recognized unless such adjustment would significantly alter the relationship between capital costs and proved reserves of oil and gas, in which case the gain or loss is recognized in the statement of operations. Depletion and depreciation of proved oil properties are calculated on the units-of-production method based upon estimates of proved reserves. Such calculations include the estimated future costs to develop proved reserves. Costs of unproved properties are not included in the costs subject to depletion. These costs are assessed periodically for impairment. At the end of each quarter, the unamortized cost of oil and gas properties, net of related deferred income taxes, is limited to the sum of the estimated future after-tax net revenues from proved properties, after giving effect to cash flow hedge positions, discounted at 10%, and the lower of cost or fair value of unproved properties, adjusted for related income tax effects. Costs in excess of the present value of estimated future net revenues are charged to impairment expense. This limitation is known as the “ceiling test,” and is based on SEC rules for the full cost oil and gas accounting method. The Company capitalizes pre-acquisition costs directly identifiable with specific properties when the acquisition of such properties is probable. Capitalized pre-acquisition costs are presented in the balance sheet. Equipment Equipment is stated at cost less accumulated depreciation. Maintenance and repairs are charged to expense as incurred. Renewals and betterments which extend the life or improve existing equipment are capitalized. Upon disposition or retirement of equipment, the cost and related accumulated depreciation are removed and any resulting gain or loss is reflected in operations. Depreciation is provided using the straight-line method over the estimated useful lives of the assets, which are 3 to 10 years. Income Taxes Income taxes are accounted for in accordance with the provisions of ASC Topic No. 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized. Revenue Recognition ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” Revenue Recognition (Topic 605) The Company’s revenue is comprised entirely of revenue from exploration and production activities. The Company’s oil is sold primarily to wholesalers and others that sell product to end use customers. Natural gas is sold primarily to interstate and intrastate natural-gas pipelines, various end-users, local distribution companies, and natural-gas marketers. NGLs are sold primarily to various end-users. Payment is generally received from the customer in the month following delivery. Contracts with customers have varying terms, including spot sales or month-to-month contracts, or contracts with a finite term, where the production from a well or group of wells is sold to one or more customers. The Company recognizes sales revenues for oil, natural gas, and NGLs based on the amount of each product sold to a customer when control transfers to the customer. Generally, control transfers at the time of delivery to the customer at a pipeline interconnect, the tailgate of a processing facility, or as a tanker lifting is completed. Revenue is measured based on the contract price, which may be index-based or fixed, and may include adjustments for market differentials and downstream costs incurred by the customer, including gathering, transportation, and fuel costs. Revenues are recognized for the sale of the Company’s net share of production volumes. Sales on behalf of other working interest owners and royalty interest owners are not recognized as revenues. The Company does not hedge nor forward sell any of its current production via derivative financial contracts. Share-based Compensation The Company estimates the fair value of each share-based compensation award at the grant date by using the Black-Scholes option pricing model. The fair value determined represents the cost for the award and is recognized over the vesting period during which an employee is required to provide service in exchange for the award. Share-based compensation expense is recognized based on awards ultimately expected to vest. Excess tax benefits, if any, are recognized as an addition to paid-in capital. Net Loss per Common Share Basic net loss per common share amounts are computed by dividing the net loss available to Norris Industries, Inc. shareholders by the weighted average number of common shares outstanding over the reporting period. In periods in which the Company reports a net loss, dilutive securities are excluded from the calculation of diluted earnings per share as the effect would be anti-dilutive. The following table summarizes the common stock equivalents excluded from the calculation of diluted net loss per as the inclusion of these shares would be anti-dilutive for the years ended February 28, 2019 and 2018: 2019 2018 Stock options 1,440,000 1,440,000 Series A Convertible Preferred Stock 66,666,667 66,666,667 Convertible debt 9,250,000 7,750,000 Total Common Shares to be issued 73,356,667 75,856,667 Concentrations of Credit Risk Financial instruments which potentially subject the Company to concentrations of credit risk include cash deposits placed with financial institutions. The Company maintains its cash in bank accounts which, at times, may exceed federally insured limits as guaranteed by the Federal Deposit Insurance Corporation (“FDIC”). At February 28, 2019, $0 of the Company’s cash balances was uninsured. The Company has not experienced any losses on such accounts. Sales to three customers comprised 77% of the Company’s total oil and gas revenues for the year ended February 28, 2019. As of February 28, 2019, majority of our receivables are from these three customers as well. The Company believes that, in the event that its primary customers are unable or unwilling to continue to purchase the Company’s production, there are a substantial number of alternative buyers for our production at comparable prices. Recent Accounting Pronouncements In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230)” In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”. The amendments in this update is to improve the effectiveness of disclosures in the notes to the financial statements by facilitating clear communication of the information required by GAAP that is most important to users of each entity’s financial statements. The amendments in this update apply to all entities that are required, under existing GAAP, to make disclosures about recurring or nonrecurring fair value measurements. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company does not expect that this guidance will have a material impact on its consolidated financial statements. In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842): Target Improvements”. The amendments in this update also clarify which Topic (Topic 842 or Topic 606) applies for the combined component. Specifically, if the non-lease component or components associated with the lease component are the predominant component of the combined component, an entity should account for the combined component in accordance with Topic 606. Otherwise, the entity should account for the combined component as an operating lease in accordance with Topic 842. An entity that elects the lessor practical expedient also should provide certain disclosures. The Company will adopt this new standard on March 1, 2019. The Company’s initial evaluation of its current leases does not indicate that the adoption of this standard will have a material impact on its consolidated statements of operations. In July 2018, the FASB issued ASU 2018-10, “Codification Improvements to Topic 842, Leases”. The amendments in this update affect narrow aspects of the guidance issued in the amendments in update 2016-02 as described in the table below. The amendments in this update related to transition do not include amendments from proposed Accounting Standards Update, Leases (Topic 842): Targeted Improvements, specific to a new and optional transition method to adopt the new lease requirements in Update 2016-02. That additional transition method will be issued as part of a forthcoming and separate update that will result in additional amendments to transition paragraphs included in this Update to conform with the additional transition method. The Company will adopt this new standard on March 1, 2019. The Company’s initial evaluation of its current leases does not indicate that the adoption of this standard will have a material impact on its consolidated statements of operations. In June 2018, the FASB issued ASU 2018-07, “Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting”. The amendments in this update maintain or improve the usefulness of the information provided to the users of financial statements while reducing cost and complexity in financial reporting. The areas for simplification in this update involve several aspects of the accounting for nonemployee share-based payment transactions resulting from expanding the scope of Topic 718, to include share-based payment transactions for acquiring goods and services from nonemployees. Some of the areas for simplification apply only to nonpublic entities. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company does not expect that this guidance will have a material impact on its consolidated financial statements. The Company does not expect the adoption of any other recently issued accounting pronouncements to have a significant impact on its financial position, results of operations, or cash flows. Subsequent Events The Company has evaluated all transactions through the date the consolidated financial statements were issued for subsequent event disclosure consideration. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 12 Months Ended |
Feb. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Note 2 – Revenue from Contracts with Customers Change in Accounting Policy The Company adopted ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, on March 1, 2018, using the modified retrospective method applied to contracts that were not completed as of March 1, 2018. Refer to Note 1 – Organization, Nature of Operations and Summary of Significant Accounting Policies for additional information. Exploration and Production There were no significant changes to the timing or valuation of revenue recognized for sales of production from exploration and production activities. Disaggregation of Revenue from Contracts with Customers The following table disaggregates revenue by significant product type for the years ended February 28, 2019 and 2018: 2019 2018 Oil sales $ 250,252 $ 82,444 Natural gas sales 248,822 49,499 Natural gas liquids sales - - Total $ 499,074 $ 131,943 There were no significant contract liabilities or transaction price allocations to any remaining performance obligations as of February 28, 2019 and 2018. |
Oil and Gas Properties
Oil and Gas Properties | 12 Months Ended |
Feb. 28, 2019 | |
Extractive Industries [Abstract] | |
Oil and Gas Properties | Note 3 – Oil and Gas Properties The following table summarizes the Company’s oil and gas activities by classification for the years ended February 28, 2019 and 2018: February 28, 2017 Additions Dispositions February 28, 2018 Oil and gas properties, subject to depletion $ 946,878 $ 1,700,000 $ - $ 2,646,878 Asset retirement costs 8,438 60,786 - 69,224 Accumulated depletion (56,340 ) (13,420 ) - (69,760 ) Total oil and gas assets $ 898,976 $ 1,747,366 $ - $ 2,646,342 February 28, 2018 Additions Dispositions February 28, 2019 Oil and gas properties, subject to depletion $ 2,646,878 $ - $ - $ 2,646,878 Asset retirement costs 69,224 - - 69,224 Accumulated depletion (69,760 ) (189,532 ) - (259,292 ) Total oil and gas assets $ 2,646,342 $ (189,532 ) $ - $ 2,456,810 The depletion recorded for production on proved properties for the years ended February 28, 2019 and 2018, amounted to $189,532 and $13,420, respectively. During the years ended February 28, 2019 and 2018, there were no ceiling test write-downs of the Company’s oil and gas properties. Jack County and Palo Pinto County Properties On December 28, 2017, the Company paid $1.6 million for the rights to 11 oil and gas leases, totaling 2,790.9 acres. These leases are located in Jack County and Palo Pinto County in Texas. The wells located on these leases have existing production and the Company plans to invest additional funds to further develop these oil and gas properties. The following tables summarize the purchase price and allocation of the purchase price to the net assets acquired in connection with the Acquisition: Consideration Given Cash paid $ 1,600,000 Net Assets Acquired Oil and gas properties $ 1,624,063 Asset retirement obligation (24,063 ) Total purchase price $ 1,600,000 |
Equipment
Equipment | 12 Months Ended |
Feb. 28, 2019 | |
Property, Plant and Equipment [Abstract] | |
Equipment | Note 4 – Equipment The Company’s fixed assets consisted of a used vehicle and has an estimated useful life of five years. Fixed assets consist of the following at February 28, 2019 and 2018: 2019 2018 Vehicle $ 24,500 $ 24,500 Accumulated depreciation (16,754 ) (11,854 ) Total $ 7,746 $ 12,646 The Company recorded depreciation expense of $4,900 and $4,940, respectively, during the years ended February 28, 2019 and 2018. |
Asset Retirement Obligations
Asset Retirement Obligations | 12 Months Ended |
Feb. 28, 2019 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | Note 5 – Asset Retirement Obligations The following table summarizes the change in the Company’s asset retirement obligations during the year ended February 28, 2019: Asset retirement obligations as of February 28, 2018 $ 76,657 Additions - Current year revision of previous estimates - Accretion during the year ended February 28, 2019 16,193 Asset retirement obligations as of February 28, 2019 $ 92,850 During the years ended February 28, 2019 and 2018, the Company recognized accretion expense of $16,193 and $5,826, respectively. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Feb. 28, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 6 – Related Party Transactions $750,000 Loan Payable to JBB Partners, Inc. (“JBB”) On April 7, 2017, the Company entered into a secured promissory note (the “Secured Promissory Note”) with JBB, an entity owned by the Company’s CEO and majority shareholder. Pursuant to the terms of the Secured Promissory Note, the Company borrowed from JBB $200,000 (the “Loan”). The Loan was funded on April 11, 2017. The Loan was secured by all of the Company’s assets and until August 2, 2017, was additionally secured by 17,920,000 shares of the Company’s common stock then owned by two of the then officers of the Company. The Loan carried interest at the rate of 3% per annum and the maturity date was April 7, 2018. On July 27, 2017, to be effective as of August 2, 2017, JBB and the Company: (a) modified the Secured Promissory Note and restated it to increase the loan principal to an aggregate of $750,000, which included the advances made on April 11, 2017, and (b) modified and added certain other provisions, including elimination of the share collateral that secured the Loan, changing the maturity date to July 27, 2018, and adding a provision to automatically convert the outstanding principal and interest into 1,000,000 shares of Series A Convertible Preferred Stock. The Company approved a name change and new corporation charter, effective on February 21, 2018. With its name change to Norris Industries, the Board approved an increase in the number of authorized common shares issuable to 150,000,000 shares, and authorized 20,000,000 shares of preferred stock, of which 1,000,000 Series A Preferred shares were issued to JBB Partners, Inc. in exchange for the $750,000 of prior debt and accrued interest outstanding (See Note 9). During the year ended February 28, 2018, the Company recognized interest expense of $12,513 related to the $750,000 loan payable to JBB Partners, Inc. $1,850,000 Promissory Note to JBB On December 28, 2017, the Company borrowed $1,550,000 from JBB to complete the purchases of a series of oil and gas leases. The loan has an interest rate of 3% per annum, a maturity date of December 28, 2018 and is secured by all assets of the Company. The loan is convertible to the Company’s common stock at the conversion rate of $0.20 per share. On June 26, 2018, the Company and JBB entered into a modification of the existing Loan Note, to add provisions to permit the Company to obtain additional advances under the Loan Note up to a maximum of $1,000,000. The Company may request an advance in increments of $100,000 no more frequently than every 30 days, provided that (i) it provides a description of the use of proceeds for the advance reasonably acceptable to JBB, and (ii) the Company is not otherwise in default of the Loan Note. The original loan amount and the advances are secured by all the assets of the Company and are convertible into common stock of the Company at the rate of $0.20 per share, subject to adjustment for any reverse and forward stock splits. The Loan Note may be repaid at any time, without penalty, however, any advance that is repaid before maturity may not be re-borrowed as a further advance. On October 11, 2018, the Company entered into an amendment of its promissory note to JBB to extend the maturity date to December 31, 2019. On May 21, 2019, the Company entered into an extension agreement with JBB to extend the maturity of its outstanding promissory note to September 30, 2020. During the year ended February 28, 2019, JBB advanced $300,000 to the Company and the Company recognized interest expense of $52,268. |
Income Taxes
Income Taxes | 12 Months Ended |
Feb. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 7 – Income Taxes Due to the Company’s net losses, there were no provisions for income taxes for the years ended February 28, 2019 and 2018. The difference between the income tax expense of zero shown in the statement of operations and pre-tax book net loss times the federal statutory rate of 21% and 32.71% for the years ended February 28, 2019 and 2018, respectively, are summarized as follows: 2019 2018 Pretax book loss $ (193,554 ) $ (833,505 ) Permanent differences: Stock-based compensation 45,360 78,995 Loss on settlement of debt - 200,831 Change in valuation allowance 136,286 243,412 Change in the effective rates - 331,363 Other adjustments 11,908 (21,096 ) Total tax expense $ - $ - Deferred income tax assets for the years ended February 28, 2019 and 2018 are as follows: Deferred Tax Assets 2019 2018 Net operating losses carry forwards $ 1,577,319 $ 1,444,810 Others - (3,777 ) Total deferred tax assets 1,577,319 1,441,033 Less valuation allowance (1,577,319 ) (1,441,033 ) Total deferred tax assets $ - $ - In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of deferred assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Based on the available objective evidence, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, management has applied a full valuation allowance against its net deferred tax assets at February 28, 2019 and 2018. The net change in the total valuation allowance from February 28, 2018 and February 28, 2019, was an increase of $136,286. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. As of February 28, 2019, and 2018, the Company did not have any significant uncertain tax positions or unrecognized tax benefits. As of February 28, 2019, the Company has federal net operating loss carryforwards of approximately $5,213,000 for federal and state tax purposes, respectively, which if not utilized, will expire beginning in 2038, respectively, for both federal and state purposes. Utilization of NOL and tax credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that may have occurred or that could occur in the future, as required by the Internal Revenue Code (the “Code”), as amended, as well as similar state provisions. In general, an “ownership change” as defined by the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percent of the outstanding stock of a company by certain shareholders or public groups. The Company experienced an “ownership change” within the meaning of IRC Section 382 during the year ended February 28, 2019. As a result, certain limitations apply to the annual amount of net operating losses that can be used to offset post ownership change taxable income. Tax Cuts and Jobs Act On December 22, 2017, the U.S. Government enacted comprehensive tax legislation referred to as the Tax Cuts and Jobs Act (the “Act”). The Act makes broad and complex changes to the U.S. tax code, including but not limited to, reducing the U.S. federal corporate rate from 35% to 21%, allowing full expensing of qualified property acquired and placed in service after September 27, 2017 and imposing new limits on the deduction of net operating losses, executive compensation and net interest expense. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Feb. 28, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 8 – Commitments and Contingencies Office Lease As of September 1, 2018, the Company moved to the offices of International Western Oil Corp. (“IWO”), a related party, in Weatherford, TX that is being rented on a month-to-month sublease basis at rate of $950 per month from IWO. Leasehold Drilling Commitments The Company’s oil and gas leasehold acreage is subject to expiration of leases if the Company does not drill and hold such acreage by production or otherwise exercises options to extend such leases, if available, in exchange for payment of additional cash consideration. In the King County, Texas lease acreage, 640 acres are due to expire in June 2021. The Company plans to hold significantly all of this acreage through a program of drilling and completing producing wells. Where the Company is not able to drill and complete a well before lease expiration, the Company may seek to extend leases where able. |
Equity Transactions
Equity Transactions | 12 Months Ended |
Feb. 28, 2019 | |
Equity [Abstract] | |
Equity Transactions | Note 9 – Equity Transactions On February 21, 2018, the Company effected an increase in the Company’s authorized shares of stock from 90,000,000 to 170,000,000, of which 150,000,000 shares are designated as common stock, par value $0.0001 per share, and 20,000,000 shares are designated as preferred stock, par value $0.0001 per share, and (3) create a single class of “blank check” Preferred Stock for the issuance of up to 20,000,000 shares of Preferred Stock, having such terms, rights and features as may be determined by the board of directors of the Company from time to time. Preferred Stock On February 21, 2018, the Company filed a Certificate of Designation with the Secretary of State of Nevada to create the Series A Convertible Preferred Stock of the Company and fulfill the Company’s obligations under the $750,000 Loan Payable to JBB described in Note 6. The Series A Convertible Preferred Stock has certain dividend, liquidation, voting and conversion rights. When, and as declared by the Company’s Board of Directors, the holders of Series A Convertible Preferred Stock may be entitled to participate prior to any dividends paid on the Company’s common stock. There are no other dividend rights. The Series A Convertible Preferred Stock Original Issuance Price is $0.75 per share. In the event of any liquidation, dissolution or winding up of the Company or any Deemed Liquidation Event (as defined in the Certificate of Designation), the holders of Series A Convertible Preferred Stock would be entitled to receive, prior to and in preference to the holders of common stock, an amount per share of Series A Preferred Stock equal to three (3) times the Series A Preferred Stock Original Issue Price plus any declared but unpaid dividends thereon, which is the full principal amount of the $750,000 Loan Payable to JBB. Holders of the Series A Convertible Preferred Stock have the right to convert shares of Series A Convertible Preferred Stock, at any time and from time to time, into such number of fully paid and non-assessable shares of common stock as is determined by the number of shares Series A Convertible Preferred Stock, divided by the product of (i) the Preferred Stock Conversion Price in effect at the time of conversion and (ii) 0.02. The “Preferred Stock Conversion Price” shall initially be equal to $0.75 will equal 666,667 shares of common stock. Such Preferred Stock Conversion Price shall be subject to adjustment as in the event of stock split, merger, reorganization and certain dividend and distribution. There is no mandatory conversion or redemption right by the Company. As of February 28, 2019, there were 1,000,000 shares of Series A Convertible Preferred Stock issued and outstanding. Common Stock There were no issuances of common stock (or common stock activity) during the year ended February 28, 2019. During the year ended February 28, 2018, the Company had the following common stock activity: - the Company sold 34,520,000 shares of its common stock for total cash proceeds of $365,000; - the Company issued 12,000 shares of its common stock to settle $12,000 of stock payable; - the Company issued 315,000 shares, valued at their fair value of $483,152, of its common stock for stock-based compensation; - on August 2, 2017, Ross Henry Ramsey, former CEO of the Company, and Benjamin Tran, former Chairman of the Company, sold 17,920,000 shares of common stock and 12,000,000 shares of common stock, respectively, to JBB Partners, Inc. Mr. Patrick Norris is the principal of JBB Partners, Inc. The Company’s related party, International Western Oil Corporation, also sold 500,000 shares of the Company’s common stock to Mr. Patrick Norris. At the same time, Mr. Norris was appointed the new CEO, President, CFO, Secretary and a director of the Company. Mr. Ramsey continued as a director of the Company, and Mr. Tran resigned as a director of the Company effective September 15, 2017. A change of control event occurred as a result of these transactions; and - on August 2, 2017, the Company and Riggs Capital, Inc. consummated a Debt Conversion Agreement to convert its outstanding debt of $379,428 into 5,900,000 shares of common stock which were distributed to Riggs Capital, Inc. and its related party, Patrick Riggs. The Debt Conversion Agreement provided for a one-year lock-up on the sale of shares issued in the transaction. The Company recorded a loss on extinguishment of debt of $1,228,322 to recognize the difference between the reacquisition price, (the fair value of the stock issued) and the net carrying amount of the extinguished debt. ASC Topic 470-50-40 provides for the difference between the net carrying amount of the extinguished debt and the reacquisition price be recognized currently in the period of extinguishment. Stock Options During the year ended February 28, 2018, the Company granted two of its officers options to purchase a total of 1,440,000 shares the Company’s common stock with an exercise price of $0.01 per share, a term of 2 years until August 3, 2019, and a vesting period of 2 years. The options had an aggregate fair value of $431,956 that was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 1.34%; (2) expected life of 2 years; (3) expected volatility of 482.51%; and (4) zero expected dividends. The fair value of all options issued and outstanding are being amortized over their respective vesting periods. These options had an intrinsic value of $68,160 as of February 28, 2019. During the year ended February 28, 2019, the Company recorded total option expense of $216,000 related to the vesting of these options. The unrecognized compensation expense on these options at February 28, 2019 was approximately $90,000. As of February 28, 2019, these options have a weighted-average remaining life of 0.43 years, and a weighted-average exercise price at $0.01 per share, with total of 1,440,000 options outstanding, of which approximately 1,140,000 options were fully vested as of February 28, 2019. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Feb. 28, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 10 – Subsequent Events On May 21, 2019, the Company entered into an extension agreement with JBB to extend the maturity of its outstanding notes payable to September 30, 2020, and also funded an additional $100,000 to the Company. |
Supplemental Oil and Gas Disclo
Supplemental Oil and Gas Disclosures (Unaudited) | 12 Months Ended |
Feb. 28, 2019 | |
Extractive Industries [Abstract] | |
Supplemental Oil and Gas Disclosures (Unaudited) | Note 11 – Supplemental Oil and Gas Disclosures (Unaudited) Capitalized Costs Relating to Oil and Gas Producing Activities The estimates of proved oil and gas reserves utilized in the preparation of these statements were prepared by Bryant M. Mook for years ended February 28, 2019 and 2018, using reserve definitions and pricing requirements prescribed by the SEC. The Company used a combination of production performance and offset analogies, along with estimated future operating and development costs as provided by the Company and based upon historical costs adjusted for known future changes in operations or developmental plans, to estimate its reserves. There are numerous uncertainties inherent in estimating quantities of proved reserves, projecting future rates of production and projecting the timing of development expenditures, including many factors beyond our control. The reserve data represents only estimates. Reservoir engineering is a subjective process of estimating underground accumulations of natural gas and oil that cannot be measured in an exact manner. The accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretations and judgment. All estimates of proved reserves are determined according to the rules prescribed by the SEC. These rules indicate that the standard of “reasonable certainty” be applied to the proved reserve estimates. This concept of reasonable certainty implies that as more technical data becomes available, a positive, or upward, revision is more likely than a negative, or downward, revision. Estimates are subject to revision based upon a number of factors, including reservoir performance, prices, economic conditions and government restrictions. In addition, results of drilling, testing and production subsequent to the date of an estimate may justify revision of that estimate. Reserve estimates are often different from the quantities of natural gas and oil that are ultimately recovered. The meaningfulness of reserve estimates is highly dependent on the accuracy of the assumptions on which they were based. In general, the volume of production from natural gas and oil properties we own declines as reserves are depleted. Except to the extent we conduct successful development activities or acquire additional properties containing proved reserves, or both, our proved reserves will decline as reserves are produced. There have been no major discoveries or other events, favorable or adverse, that may be considered to have caused a significant change in the estimated proved reserves since February 28, 2019. The Company emphasizes that reserve estimates are inherently imprecise. Accordingly, the estimates are expected to change as more current information becomes available. In addition, a portion of the Company’s proved reserves are proved developed non-producing and proved undeveloped, which increases the imprecision inherent in estimating reserves which may ultimately be produced. All of the Company’s reserves are located in the United States. February 28, 2019 February 28, 2018 Proved oil and gas properties $ 2,716,102 $ 2,716,102 Unproved oil and gas properties - - Accumulated depreciation, depletion and amortization (259,292 ) (69,760 ) Total acquisition, development and exploration costs $ 2,456,810 $ 2,646,342 Costs Incurred in Oil and Gas Property Acquisition, Exploration, and Development Activities At February 28, 2019 and 2018, unevaluated costs of $0 were excluded from the depletion base. February 28, 2019 February 28, 2018 Acquisition of properties - proved $ - $ 1,605,000 Acquisition of properties - unproved - - Exploration costs - - Development costs - - Disposition/sale - (5,000 ) Total costs incurred $ - $ 1,600,000 Estimated Quantities of Proved Oil and Gas Reserves The following table sets forth proved oil and gas reserves together with the changes therein, proved developed reserves and proved undeveloped reserves for the years ended February 28, 2019 and 2018. Units of oil are in thousands of barrels (“MBbls”) and units of gas are in millions of cubic feet (“MMcf”). Gas is converted to barrels of oil equivalents (“MBoe”) using a ratio of six Mcf of gas per Bbl of oil. 2019 2018 Oil Gas BOE Oil Gas BOE Proved reserves: Beginning of year 197 4,609 966 138 103 155 Revisions (72 ) (2,966 ) (567 ) (33 ) (91 ) (48 ) Extensions and discoveries - - - - - - Purchases of minerals-in-place 94 4,617 864 Sales of minerals-in-place - - - - - - Production (5 ) (107 ) (23 ) (2 ) (20 ) (5 ) End of year 120 1,536 376 197 4,609 966 Proved developed reserves: Beginning of year 59 861 203 12 38 18 End of year 27 210 62 59 861 203 Proved not producing reserves: Beginning of year 138 3,747 763 54 14 57 End of year 48 1,206 249 138 3,747 763 Proved undeveloped reserves: Beginning of year - - - 76 64 86 End of year 45 120 65 - - - Standardized Measure of Discounted Future Net Cash Flows and Changes Therein Relating to Proved Reserves The standardized measure of discounted future net cash flows, in management’s opinion, should be examined with caution. The basis for this table is the reserve studies prepared by the Company’s independent petroleum engineering consultants, which contain imprecise estimates of quantities and rates of future production of reserves. Revisions of previous year estimates can have a significant impact on these results. Also, exploration costs in one year may lead to significant discoveries in later years and may significantly change previous estimates of proved reserves and their valuation. Therefore, the standardized measure of discounted future net cash flow is not necessarily indicative of the fair value of the Company’s proved oil and natural gas properties. Future cash inflows for 2019 were computed by applying the average price for the year to the year-end quantities of proved reserves. The 2019 average price for the year was calculated using the 12-month period prior to the ending date of the period covered by the report, determined as an un-weighted arithmetic average of the first-day-of-the-month price for each month within such period. Adjustment in this calculation for future price changes is limited to those required by contractual arrangements in existence at the end of each reporting year. Future development, abandonment and production costs were computed by estimating the expenditures to be incurred in developing and producing proved oil and natural gas reserves at the end of the year, based on year-end costs, assuming continuation of year-end economic conditions. Future income tax expense was computed by applying statutory rates, less the effects of tax credits for each period presented, and to the difference between pre-tax net cash flows relating to the Company’s proved reserves and the tax basis of proved properties, after consideration of available net operating loss and percentage depletion carryovers. Discounted future net cash flows have been calculated using a ten percent discount factor. Discounting requires a year-by-year estimate of when future expenditures will be incurred and when reserves will be produced. The estimated present value of future cash flows relating to prove reserves is extremely sensitive to prices used at any measurement period. The prices used for each commodity for the years ended February 28, 2019 and 2018 as adjusted, were as follows: Oil (Bbl) Gas (Mcf) 2019 (average price) $ 63.43 $ 3.04 2018 (average price) $ 53.49 $ 3.00 The information provided in the tables set out below does not represent management’s estimate of the Company’s expected future cash flows or of the value of the Company’s proved oil and gas reserves. Estimates of proved reserve quantities are imprecise and change over time as new information becomes available. Moreover, probable and possible reserves, which may become proved in the future, are excluded from the calculations. The arbitrary valuation prescribed under ASC No. 932 requires assumptions as to the timing and amount of future development and production costs. The calculations should not be relied upon as an indication of the Company’s future cash flows or of the value of its oil and gas reserves. The following table sets forth the standardized measure of discounted future net cash flows relating to proven reserves for the years ended February 28, 2019 and 2018, respectively (stated in thousands): 2019 2018 Future cash inflows $ 12,571 $ 24,391 Future costs: Production costs (3,762 ) (4,530 ) Future tax expense (1,070 ) (2,209 ) Future development costs (516 ) (950 ) Future net cash flows 7,223 16,702 10% annual discount for estimated timing of cash flows (3,808 ) (8,755 ) Standardized measure of discounted net cash flows $ 3,415 $ 7,947 Summary of Changes in Standardized Measure of Discounted Future Net Cash Flows The following table summarizes the principal sources of change in the standardized measure of discounted future estimated net cash flows at 10% per annum for the years ended February 28, 2019 and 2018, respectively (stated in thousands): 2019 2018 Increase (decrease): Beginning of year $ 7,947 $ 2,544 Sales of oil produced, net of production costs (288 ) 1,595 Net changes in sales and transfer prices and in production costs and production costs related to future production 15,804 (10,443 ) Previously estimated development costs incurred during the period - - Changes in future development costs (435 ) 950 Revisions of previous quantity estimates due to prices and performance (5,138 ) (649 ) Accretion of discount 795 254 Discoveries, net of future production and development costs associated with these extensions and discoveries - - Purchases and sales of minerals in place 6,894 Timing and other (15,270 ) 6,802 End of year $ 3,415 $ 7,947 |
Organization, Nature of Opera_2
Organization, Nature of Operations and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Feb. 28, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules of the Securities and Exchange Commission (“SEC”). The Company’s consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and entities in which the Company has a controlling financial interest. All significant inter-company accounts and transactions have been eliminated in consolidation. |
Liquidity and Capital Considerations | Liquidity and Capital Considerations The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the issuance date of these consolidated financial statements. The Company has incurred continuing losses since 2016, including a loss of approximately $922,000 for the fiscal year ended February 28, 2019. During the fiscal year ended February 28, 2019, the Company received $300,000 in funding from its credit line, and reduced its general and administrative costs, increased revenues, and incurred cash losses of approximately $419,000 from its operating activities. Further, as of February 28, 2019, the Company had $700,000 available to borrow under its existing credit line with JBB, and cash balance of approximately $125,000 and net working capital of approximately $95,000. The Company drew an additional $100,000 on its line of credit subsequent to year-end. The Company’s principal capital and exploration expenditures during next fiscal year are expected to relate to selected well workovers on its Jack and Palo Pinto County acreages. The Company believes that it has the ability to fund its costs for such expenditures from cash on-hand and available funds from its line of credit. The Company believes that it has sufficient working capital and in-place financing to fund its expected operational losses for twelve months following the issuance of these financial statements. In the event that the Company required additional capital to fund higher operational losses, or oil and gas property leases purchases for fiscal year ending February 28, 2020, the Company expects to seek additional capital from one or more sources via sales of restricted private placement of sales of equity and debt securities from those other than JBB. However, there can be no assurance that the Company would be able to secure the necessary capital to fund its costs on acceptable terms, or at all. If, for any reason, the Company is unable to fund its operations, it would have to undertake other aggressive cost cutting measures and then be subject to possible loss of some of its rights and interests in prospects to curtail operations and forced to forego opportunities or in worst case, cease operations. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expense during the period. Actual results could differ from those estimates. |
Risks and Uncertainties | Risks and Uncertainties The Company’s operations are subject to significant risks and uncertainties, including financial, operational, technological, and other risks associated with operating an emerging business, including the potential risk of business failure. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of the year or less to be cash equivalents. The Company has not experienced any losses on its deposits of cash and cash equivalents . |
Oil and Gas Properties, Full Cost Method | Oil and Gas Properties, Full Cost Method The Company follows the full cost method of accounting for its oil gas properties, whereby all costs incurred in connection with the acquisition, exploration for and development of petroleum and natural gas reserves are capitalized. Such costs include lease acquisition, geological and geophysical activities, rentals on non-producing leases, drilling, completing and equipping of oil wells and administrative costs directly attributable to those activities and asset retirement costs. Disposition of oil properties are accounted for as a reduction of capitalized costs, with no gain or loss recognized unless such adjustment would significantly alter the relationship between capital costs and proved reserves of oil and gas, in which case the gain or loss is recognized in the statement of operations. Depletion and depreciation of proved oil properties are calculated on the units-of-production method based upon estimates of proved reserves. Such calculations include the estimated future costs to develop proved reserves. Costs of unproved properties are not included in the costs subject to depletion. These costs are assessed periodically for impairment. At the end of each quarter, the unamortized cost of oil and gas properties, net of related deferred income taxes, is limited to the sum of the estimated future after-tax net revenues from proved properties, after giving effect to cash flow hedge positions, discounted at 10%, and the lower of cost or fair value of unproved properties, adjusted for related income tax effects. Costs in excess of the present value of estimated future net revenues are charged to impairment expense. This limitation is known as the “ceiling test,” and is based on SEC rules for the full cost oil and gas accounting method. The Company capitalizes pre-acquisition costs directly identifiable with specific properties when the acquisition of such properties is probable. Capitalized pre-acquisition costs are presented in the balance sheet. |
Equipment | Equipment Equipment is stated at cost less accumulated depreciation. Maintenance and repairs are charged to expense as incurred. Renewals and betterments which extend the life or improve existing equipment are capitalized. Upon disposition or retirement of equipment, the cost and related accumulated depreciation are removed and any resulting gain or loss is reflected in operations. Depreciation is provided using the straight-line method over the estimated useful lives of the assets, which are 3 to 10 years. |
Income Taxes | Income Taxes Income taxes are accounted for in accordance with the provisions of ASC Topic No. 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized. |
Revenue Recognition | Revenue Recognition ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” Revenue Recognition (Topic 605) The Company’s revenue is comprised entirely of revenue from exploration and production activities. The Company’s oil is sold primarily to wholesalers and others that sell product to end use customers. Natural gas is sold primarily to interstate and intrastate natural-gas pipelines, various end-users, local distribution companies, and natural-gas marketers. NGLs are sold primarily to various end-users. Payment is generally received from the customer in the month following delivery. Contracts with customers have varying terms, including spot sales or month-to-month contracts, or contracts with a finite term, where the production from a well or group of wells is sold to one or more customers. The Company recognizes sales revenues for oil, natural gas, and NGLs based on the amount of each product sold to a customer when control transfers to the customer. Generally, control transfers at the time of delivery to the customer at a pipeline interconnect, the tailgate of a processing facility, or as a tanker lifting is completed. Revenue is measured based on the contract price, which may be index-based or fixed, and may include adjustments for market differentials and downstream costs incurred by the customer, including gathering, transportation, and fuel costs. Revenues are recognized for the sale of the Company’s net share of production volumes. Sales on behalf of other working interest owners and royalty interest owners are not recognized as revenues. The Company does not hedge nor forward sell any of its current production via derivative financial contracts. |
Stock-Based Compensation | Share-based Compensation The Company estimates the fair value of each share-based compensation award at the grant date by using the Black-Scholes option pricing model. The fair value determined represents the cost for the award and is recognized over the vesting period during which an employee is required to provide service in exchange for the award. Share-based compensation expense is recognized based on awards ultimately expected to vest. Excess tax benefits, if any, are recognized as an addition to paid-in capital. |
Net Loss Per Common Share | Net Loss per Common Share Basic net loss per common share amounts are computed by dividing the net loss available to Norris Industries, Inc. shareholders by the weighted average number of common shares outstanding over the reporting period. In periods in which the Company reports a net loss, dilutive securities are excluded from the calculation of diluted earnings per share as the effect would be anti-dilutive. The following table summarizes the common stock equivalents excluded from the calculation of diluted net loss per as the inclusion of these shares would be anti-dilutive for the years ended February 28, 2019 and 2018: 2019 2018 Stock options 1,440,000 1,440,000 Series A Convertible Preferred Stock 66,666,667 66,666,667 Convertible debt 9,250,000 7,750,000 Total Common Shares to be issued 73,356,667 75,856,667 |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments which potentially subject the Company to concentrations of credit risk include cash deposits placed with financial institutions. The Company maintains its cash in bank accounts which, at times, may exceed federally insured limits as guaranteed by the Federal Deposit Insurance Corporation (“FDIC”). At February 28, 2019, $0 of the Company’s cash balances was uninsured. The Company has not experienced any losses on such accounts. Sales to three customers comprised 77% of the Company’s total oil and gas revenues for the year ended February 28, 2019. As of February 28, 2019, majority of our receivables are from these three customers as well. The Company believes that, in the event that its primary customers are unable or unwilling to continue to purchase the Company’s production, there are a substantial number of alternative buyers for our production at comparable prices. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230)” In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”. The amendments in this update is to improve the effectiveness of disclosures in the notes to the financial statements by facilitating clear communication of the information required by GAAP that is most important to users of each entity’s financial statements. The amendments in this update apply to all entities that are required, under existing GAAP, to make disclosures about recurring or nonrecurring fair value measurements. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company does not expect that this guidance will have a material impact on its consolidated financial statements. In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842): Target Improvements”. The amendments in this update also clarify which Topic (Topic 842 or Topic 606) applies for the combined component. Specifically, if the non-lease component or components associated with the lease component are the predominant component of the combined component, an entity should account for the combined component in accordance with Topic 606. Otherwise, the entity should account for the combined component as an operating lease in accordance with Topic 842. An entity that elects the lessor practical expedient also should provide certain disclosures. The Company will adopt this new standard on March 1, 2019. The Company’s initial evaluation of its current leases does not indicate that the adoption of this standard will have a material impact on its consolidated statements of operations. In July 2018, the FASB issued ASU 2018-10, “Codification Improvements to Topic 842, Leases”. The amendments in this update affect narrow aspects of the guidance issued in the amendments in update 2016-02 as described in the table below. The amendments in this update related to transition do not include amendments from proposed Accounting Standards Update, Leases (Topic 842): Targeted Improvements, specific to a new and optional transition method to adopt the new lease requirements in Update 2016-02. That additional transition method will be issued as part of a forthcoming and separate update that will result in additional amendments to transition paragraphs included in this Update to conform with the additional transition method. The Company will adopt this new standard on March 1, 2019. The Company’s initial evaluation of its current leases does not indicate that the adoption of this standard will have a material impact on its consolidated statements of operations. In June 2018, the FASB issued ASU 2018-07, “Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting”. The amendments in this update maintain or improve the usefulness of the information provided to the users of financial statements while reducing cost and complexity in financial reporting. The areas for simplification in this update involve several aspects of the accounting for nonemployee share-based payment transactions resulting from expanding the scope of Topic 718, to include share-based payment transactions for acquiring goods and services from nonemployees. Some of the areas for simplification apply only to nonpublic entities. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company does not expect that this guidance will have a material impact on its consolidated financial statements. The Company does not expect the adoption of any other recently issued accounting pronouncements to have a significant impact on its financial position, results of operations, or cash flows. |
Subsequent Events | Subsequent Events The Company has evaluated all transactions through the date the consolidated financial statements were issued for subsequent event disclosure consideration. |
Organization, Nature of Opera_3
Organization, Nature of Operations and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Feb. 28, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table summarizes the common stock equivalents excluded from the calculation of diluted net loss per as the inclusion of these shares would be anti-dilutive for the years ended February 28, 2019 and 2018: 2019 2018 Stock options 1,440,000 1,440,000 Series A Convertible Preferred Stock 66,666,667 66,666,667 Convertible debt 9,250,000 7,750,000 Total Common Shares to be issued 73,356,667 75,856,667 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 12 Months Ended |
Feb. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table disaggregates revenue by significant product type for the years ended February 28, 2019 and 2018: 2019 2018 Oil sales $ 250,252 $ 82,444 Natural gas sales 248,822 49,499 Natural gas liquids sales - - Total $ 499,074 $ 131,943 |
Oil and Gas Properties (Tables)
Oil and Gas Properties (Tables) | 12 Months Ended |
Feb. 28, 2019 | |
Extractive Industries [Abstract] | |
Summary of Oil and Gas Activities | The following table summarizes the Company’s oil and gas activities by classification for the years ended February 28, 2019 and 2018: February 28, 2017 Additions Dispositions February 28, 2018 Oil and gas properties, subject to depletion $ 946,878 $ 1,700,000 $ - $ 2,646,878 Asset retirement costs 8,438 60,786 - 69,224 Accumulated depletion (56,340 ) (13,420 ) - (69,760 ) Total oil and gas assets $ 898,976 $ 1,747,366 $ - $ 2,646,342 February 28, 2018 Additions Dispositions February 28, 2019 Oil and gas properties, subject to depletion $ 2,646,878 $ - $ - $ 2,646,878 Asset retirement costs 69,224 - - 69,224 Accumulated depletion (69,760 ) (189,532 ) - (259,292 ) Total oil and gas assets $ 2,646,342 $ (189,532 ) $ - $ 2,456,810 |
Schedule of Purchase Price and its Allocation to Net Assets Acquired | The following tables summarize the purchase price and allocation of the purchase price to the net assets acquired in connection with the Acquisition: Consideration Given Cash paid $ 1,600,000 Net Assets Acquired Oil and gas properties $ 1,624,063 Asset retirement obligation (24,063 ) Total purchase price $ 1,600,000 |
Equipment (Tables)
Equipment (Tables) | 12 Months Ended |
Feb. 28, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Fixed Assets | Fixed assets consist of the following at February 28, 2019 and 2018: 2019 2018 Vehicle $ 24,500 $ 24,500 Accumulated depreciation (16,754 ) (11,854 ) Total $ 7,746 $ 12,646 |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 12 Months Ended |
Feb. 28, 2019 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule of Asset Retirement Obligations | The following table summarizes the change in the Company’s asset retirement obligations during the year ended February 28, 2019: Asset retirement obligations as of February 28, 2018 $ 76,657 Additions - Current year revision of previous estimates - Accretion during the year ended February 28, 2019 16,193 Asset retirement obligations as of February 28, 2019 $ 92,850 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Feb. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Expense Reconciliation | The difference between the income tax expense of zero shown in the statement of operations and pre-tax book net loss times the federal statutory rate of 21% and 32.71% for the years ended February 28, 2019 and 2018, respectively, are summarized as follows: 2019 2018 Pretax book loss $ (193,554 ) $ (833,505 ) Permanent differences: Stock-based compensation 45,360 78,995 Loss on settlement of debt - 200,831 Change in valuation allowance 136,286 243,412 Change in the effective rates - 331,363 Other adjustments 11,908 (21,096 ) Total tax expense $ - $ - |
Schedule of Deferred Income Tax Assets | Deferred income tax assets for the years ended February 28, 2019 and 2018 are as follows: Deferred Tax Assets 2019 2018 Net operating losses carry forwards $ 1,577,319 $ 1,444,810 Others - (3,777 ) Total deferred tax assets 1,577,319 1,441,033 Less valuation allowance (1,577,319 ) (1,441,033 ) Total deferred tax assets $ - $ - |
Supplemental Oil and Gas Disc_2
Supplemental Oil and Gas Disclosures (Tables) | 12 Months Ended |
Feb. 28, 2019 | |
Extractive Industries [Abstract] | |
Schedule of Capitalized Costs Relating to Oil and Gas Producing Activities | All of the Company’s reserves are located in the United States. February 28, 2019 February 28, 2018 Proved oil and gas properties $ 2,716,102 $ 2,716,102 Unproved oil and gas properties - - Accumulated depreciation, depletion and amortization (259,292 ) (69,760 ) Total acquisition, development and exploration costs $ 2,456,810 $ 2,646,342 |
Schedule of Costs Incurred in Oil and Gas Property Acquisition, Exploration, and Development Activities | At February 28, 2019 and 2018, unevaluated costs of $0 were excluded from the depletion base. February 28, 2019 February 28, 2018 Acquisition of properties - proved $ - $ 1,605,000 Acquisition of properties - unproved - - Exploration costs - - Development costs - - Disposition/sale - (5,000 ) Total costs incurred $ - $ 1,600,000 |
Schedule of Estimated Quantities of Proved Oil and Gas Reserves | The following table sets forth proved oil and gas reserves together with the changes therein, proved developed reserves and proved undeveloped reserves for the years ended February 28, 2019 and 2018. Units of oil are in thousands of barrels (“MBbls”) and units of gas are in millions of cubic feet (“MMcf”). Gas is converted to barrels of oil equivalents (“MBoe”) using a ratio of six Mcf of gas per Bbl of oil. 2019 2018 Oil Gas BOE Oil Gas BOE Proved reserves: Beginning of year 197 4,609 966 138 103 155 Revisions (72 ) (2,966 ) (567 ) (33 ) (91 ) (48 ) Extensions and discoveries - - - - - - Purchases of minerals-in-place 94 4,617 864 Sales of minerals-in-place - - - - - - Production (5 ) (107 ) (23 ) (2 ) (20 ) (5 ) End of year 120 1,536 376 197 4,609 966 Proved developed reserves: Beginning of year 59 861 203 12 38 18 End of year 27 210 62 59 861 203 Proved not producing reserves: Beginning of year 138 3,747 763 54 14 57 End of year 48 1,206 249 138 3,747 763 Proved undeveloped reserves: Beginning of year - - - 76 64 86 End of year 45 120 65 - - - |
Schedule of Estimated Present Value of Future Cash Flows Relating to Prove Reserves | The estimated present value of future cash flows relating to prove reserves is extremely sensitive to prices used at any measurement period. The prices used for each commodity for the years ended February 28, 2019 and 2018 as adjusted, were as follows: Oil (Bbl) Gas (Mcf) 2019 (average price) $ 63.43 $ 3.04 2018 (average price) $ 53.49 $ 3.00 |
Schedule of Discounted Future Net Cash Flows Relating to Proven Reserves | The following table sets forth the standardized measure of discounted future net cash flows relating to proven reserves for the years ended February 28, 2019 and 2018, respectively (stated in thousands): 2019 2018 Future cash inflows $ 12,571 $ 24,391 Future costs: Production costs (3,762 ) (4,530 ) Future tax expense (1,070 ) (2,209 ) Future development costs (516 ) (950 ) Future net cash flows 7,223 16,702 10% annual discount for estimated timing of cash flows (3,808 ) (8,755 ) Standardized measure of discounted net cash flows $ 3,415 $ 7,947 |
Summary of Changes in Standardized Measure of Discounted Future Net Cash Flows | The following table summarizes the principal sources of change in the standardized measure of discounted future estimated net cash flows at 10% per annum for the years ended February 28, 2019 and 2018, respectively (stated in thousands): 2019 2018 Increase (decrease): Beginning of year $ 7,947 $ 2,544 Sales of oil produced, net of production costs (288 ) 1,595 Net changes in sales and transfer prices and in production costs and production costs related to future production 15,804 (10,443 ) Previously estimated development costs incurred during the period - - Changes in future development costs (435 ) 950 Revisions of previous quantity estimates due to prices and performance (5,138 ) (649 ) Accretion of discount 795 254 Discoveries, net of future production and development costs associated with these extensions and discoveries - - Purchases and sales of minerals in place 6,894 Timing and other (15,270 ) 6,802 End of year $ 3,415 $ 7,947 |
Organization, Nature of Opera_4
Organization, Nature of Operations and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||
Net Loss | $ (921,685) | $ (2,548,946) |
Amount accessed for funding expenses | 300,000 | |
Net cash used in operating activities | (419,242) | (846,368) |
Cash | 125,755 | $ 244,997 |
Working capital | 95,000 | |
Portion of credit line | $ 100,000 | |
Cash flow hedge, discount | 10.00% | |
Uninsured cash balances | $ 0 | |
Three Customers [Member] | Sales Revenue [Member] | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||
Percentage of oil and gas revenue comprised | 77.00% | |
Equipment [Member] | Minimum [Member] | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||
Estimated useful lives | 3 years | |
Equipment [Member] | Maximum [Member] | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||
Estimated useful lives | 10 years | |
JBB Partners, Ltd [Member] | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||
Availability of existing credit line | $ 700,000 |
Organization, Nature of Opera_5
Organization, Nature of Operations and Summary of Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Total Common Shares to be issued | 73,356,667 | 75,856,667 |
Stock Options [Member] | ||
Total Common Shares to be issued | 1,440,000 | 1,440,000 |
Series A Convertible Preferred Stock [Member] | ||
Total Common Shares to be issued | 66,666,667 | 66,666,667 |
Convertible Debt [Member] | ||
Total Common Shares to be issued | 9,250,000 | 7,750,000 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Schedule of Disaggregation of Revenue (Details) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Total revenue from customers | $ 499,074 | $ 131,943 |
Oil Sales [Member] | ||
Total revenue from customers | 250,252 | 82,444 |
Natural Gas Sales [Member] | ||
Total revenue from customers | 248,822 | 49,499 |
Natural Gas Liquids Sales [Member] | ||
Total revenue from customers |
Oil and Gas Properties (Details
Oil and Gas Properties (Details Narrative) | Dec. 28, 2017USD ($)aInteger | Feb. 28, 2019USD ($) | Feb. 28, 2018USD ($) |
Accumulated depletion of oil and gas properties | $ 189,532 | $ 13,420 | |
Impairment of oil and gas properties | |||
Deposit made on purchase of oil & gas properties | $ 1,600,000 | ||
Jack County and Palo Pinto County Properties [Member] | |||
Deposit made on purchase of oil & gas properties | $ 1,600,000 | ||
Number of oil and gas lease | Integer | 11 | ||
Area of land, Lease | a | 2,790.9 |
Oil and Gas Properties - Summar
Oil and Gas Properties - Summary of Oil and Gas Activities (Details) - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2017 |
Oil and gas properties, subject to depletion | $ 2,646,878 | $ 2,646,878 | $ 946,878 |
Asset retirement costs | 69,224 | 69,224 | 8,438 |
Accumulated depletion | (259,292) | (69,760) | (56,340) |
Total oil and gas assets | 2,456,810 | 2,646,342 | $ 898,976 |
Additions [Member] | |||
Oil and gas properties, subject to depletion | 1,700,000 | ||
Asset retirement costs | 60,786 | ||
Accumulated depletion | (189,532) | (13,420) | |
Total oil and gas assets | (189,532) | 1,747,366 | |
Dispositions [Member] | |||
Oil and gas properties, subject to depletion | |||
Asset retirement costs | |||
Accumulated depletion | |||
Total oil and gas assets |
Oil and Gas Properties - Schedu
Oil and Gas Properties - Schedule of Purchase Price and its Allocation to Net Assets Acquired (Details) - Jack County and Palo Pinto County Properties [Member] | 12 Months Ended |
Feb. 28, 2019USD ($) | |
Cash paid | $ 1,600,000 |
Oil and gas properties | 1,624,063 |
Asset retirement obligation | (24,063) |
Total purchase price | $ 1,600,000 |
Equipment (Details Narrative)
Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Depreciation expense | $ 4,900 | $ 4,940 |
Used Vehicle [Member] | ||
Fixed assets estimated useful life | 5 years |
Equipment - Schedule of Fixed A
Equipment - Schedule of Fixed Assets (Details) - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 |
Property, Plant and Equipment [Abstract] | ||
Vehicle | $ 24,500 | $ 24,500 |
Accumulated depreciation | (16,754) | (11,854) |
Total | $ 7,746 | $ 12,646 |
Asset Retirement Obligations (D
Asset Retirement Obligations (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Asset Retirement Obligation Disclosure [Abstract] | ||
Accretion expense | $ 16,193 | $ 5,826 |
Asset Retirement Obligations -
Asset Retirement Obligations - Schedule of Asset Retirement Obligations (Details) | 12 Months Ended |
Feb. 28, 2019USD ($) | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset retirement obligations as of February 28, 2018 | $ 76,657 |
Additions | |
Current year revision of previous estimates | |
Accretion during the nine months ended February 28, 2019 | 16,193 |
Asset retirement obligations as of February 28, 2019 | $ 92,850 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Oct. 11, 2018 | Jun. 26, 2018 | Feb. 21, 2018 | Dec. 28, 2017 | Aug. 02, 2017 | Jul. 27, 2017 | Apr. 07, 2017 | Feb. 28, 2019 | Feb. 28, 2018 |
Common stock, shares authorized | 150,000,000 | 150,000,000 | |||||||
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | |||||||
Series A Convertible Preferred Stock [Member] | |||||||||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | |||||||
JBB Partners, Inc. [Member] | |||||||||
Proceed from loan payable | $ 750,000 | ||||||||
Common stock, shares authorized | 150,000,000 | ||||||||
Preferred stock, shares authorized | 20,000,000 | ||||||||
Accrued interest outstanding | $ 750,000 | ||||||||
Interest expense | $ 52,268 | $ 12,513 | |||||||
Advance amount | $ 300,000 | ||||||||
JBB Partners, Inc. [Member] | Series A Convertible Preferred Stock [Member] | |||||||||
Proceed from loan payable | $ 750,000 | ||||||||
Debt conversion price per share | $ 0.02 | ||||||||
Debt conversion of price, shares | 666,667 | 1,000,000 | |||||||
Preferred stock, shares authorized | 1,000,000 | ||||||||
JBB Partners, Inc. [Member] | Secured Promissory Note [Member] | |||||||||
Proceed from loan payable | $ 200,000 | ||||||||
Number of common stock issued | 17,920,000 | ||||||||
Loan bears interest rate | 3.00% | ||||||||
Loan maturity date | Jul. 27, 2018 | Apr. 7, 2018 | |||||||
Debt instrument principal amount | $ 750,000 | ||||||||
JBB Partners, Inc. [Member] | Promissory Note [Member] | |||||||||
Proceed from loan payable | $ 1,550,000 | ||||||||
Loan bears interest rate | 3.00% | ||||||||
Loan maturity date | Dec. 28, 2018 | ||||||||
Debt conversion price per share | $ 0.20 | ||||||||
Debt maturity date description | On October 11, 2018, the Company entered into an amendment of its promissory note to JBB to extend the maturity date to December 31, 2019. On May 21, 2019, the Company entered into an extension agreement with JBB to extend the maturity of its outstanding promissory note to September 30, 2020. | ||||||||
JBB Partners, Inc. [Member] | Promissory Note [Member] | May 21, 2019 [Member] | |||||||||
Extended maturity date | Sep. 30, 2020 | ||||||||
JBB Partners, Inc. [Member] | Promissory Note [Member] | Modification of Existing Loan Note [Member] | |||||||||
Debt instrument principal amount | $ 1,000,000 | ||||||||
Debt conversion of price, shares | 0.20 | ||||||||
Advance amount | $ 100,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | Dec. 22, 2017 | Feb. 28, 2019 | Feb. 28, 2018 |
Income Tax Disclosure [Abstract] | |||
Provisions for income taxes | |||
Income tax of federal statutory rate | 21.00% | 21.00% | 32.71% |
Valuation allowance net change | $ 136,286 | $ 136,286 | |
Net operating loss carryforwards | $ 5,213,000 | ||
Operating loss carryforwards expire date | 2038 | ||
Percentage of ownership change of outstanding stock | 50.00% | ||
Income tax description | The Act makes broad and complex changes to the U.S. tax code, including but not limited to, reducing the U.S. federal corporate rate from 35% to 21%, allowing full expensing of qualified property acquired and placed in service after September 27, 2017 and imposing new limits on the deduction of net operating losses, executive compensation and net interest expense. |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Expense Reconciliation (Details) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Income Tax Disclosure [Abstract] | ||
Pretax book loss | $ (193,554) | $ (833,505) |
Stock-based compensation | 45,360 | 78,995 |
Loss on settlement of debt | 200,831 | |
Change in valuation allowance | 136,286 | 243,412 |
Change in the effective rates | 331,363 | |
Other adjustments | 11,908 | (21,096) |
Total tax expense |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Income Tax Assets (Details) - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 |
Income Tax Disclosure [Abstract] | ||
Net operating losses carry forwards | $ 1,577,319 | $ 1,444,810 |
Others | (3,777) | |
Total deferred tax assets | 1,577,319 | 1,441,033 |
Less valuation allowance | 1,577,319 | (1,441,033) |
Total deferred tax assets |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | Sep. 02, 2018USD ($) | Feb. 28, 2019a |
Commitments and Contingencies Disclosure [Abstract] | ||
Monthly rent | $ | $ 950 | |
Area of land | a | 640 | |
Lease expire description | In the King County, Texas lease acreage, 640 acres are due to expire in June 2021. |
Equity Transactions (Details Na
Equity Transactions (Details Narrative) - USD ($) | Feb. 21, 2018 | Aug. 02, 2017 | Feb. 28, 2019 | Feb. 28, 2018 |
Common stock, shares authorized | 150,000,000 | 150,000,000 | ||
Common stock, designated | 150,000,000 | |||
Common stock, par value | $ 0.0001 | $ 0.001 | $ 0.001 | |
Preferred stock, designated | 20,000,000 | |||
Preferred stock, par value | $ 0.0001 | $ 0.001 | $ 0.001 | |
Preferred stock, shares issued | ||||
Preferred stock, shares outstanding | ||||
Net cash proceeds of common stock | $ 365,000 | |||
Debt conversion of price, value | ||||
Loss on extinguishment of debt | $ 1,228,322 | |||
Options to purchase common stock shares | 73,356,667 | 75,856,667 | ||
Stock option exercise price per share | $ 0.01 | |||
Stock option term | 2 years | |||
Options vesting period | 2 years | |||
Fair value of stock option granted | $ 431,956 | |||
Discount rate | 1.34% | |||
Expected life of years | 2 years | |||
Expected volatility | 482.51% | |||
Expected dividend | 0.00% | |||
Stock option intrinsic value | $ 68,160 | |||
Stock option expense | 216,000 | |||
Unrecognized compensation expense | $ 90,000 | |||
Stock option remaining life term | 5 months 5 days | |||
Options outstanding, weighted average exercise price | $ 0.01 | |||
Options outstanding | 1,440,000 | |||
Options fully vested, shares | 1,140,000 | |||
Mr. Patrick Norris [Member] | ||||
Number of common stock shares sold during period | 500,000 | |||
JBB Partners, Inc. [Member] | ||||
Common stock, shares authorized | 150,000,000 | |||
Proceed from loan payable | $ 750,000 | |||
JBB Partners, Inc. [Member] | Ross Henry Ramsey [Member] | ||||
Number of common stock shares sold during period | 17,920,000 | |||
JBB Partners, Inc. [Member] | Benjamin Tran [Member] | ||||
Number of common stock shares sold during period | 12,000,000 | |||
Riggs Capital, Inc. [Member] | Debt Conversion Agreement [Member] | ||||
Debt conversion of price, shares | 5,900,000 | |||
Debt conversion of price, value | $ 379,428 | |||
Series A Convertible Preferred Stock [Member] | ||||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||
Preferred stock, shares issued | 1,000,000 | 1,000,000 | ||
Preferred stock, shares outstanding | 1,000,000 | 1,000,000 | ||
Series A Convertible Preferred Stock [Member] | JBB Partners, Inc. [Member] | ||||
Proceed from loan payable | $ 750,000 | |||
Shares issued, price per share | $ 0.75 | |||
Loan payable | $ 750,000 | |||
Debt conversion of price per share | $ 0.02 | |||
Debt conversion of price, shares | 666,667 | 1,000,000 | ||
Common Stock [Member] | ||||
Stock issued during period of issuance of stock | 34,520,000 | |||
Number of common stock shares sold during period | 34,520,000 | |||
Net cash proceeds of common stock | $ 365,000 | |||
Number of common stock issued to settlement of stock payable, shares | 12,000 | |||
Number of common stock issued to settlement of stock payable, value | $ 12,000 | |||
Number of common stock issued for service | 315,000 | |||
Common stock issued for services | $ 483,152 | |||
Minimum [Member] | ||||
Common stock, shares authorized | 90,000,000 | |||
Maximum [Member] | ||||
Common stock, shares authorized | 170,000,000 | |||
Maximum [Member] | Preferred Stock [Member] | ||||
Stock issued during period of issuance of stock | 20,000,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | May 21, 2019 | Feb. 28, 2019 | Feb. 28, 2018 |
Advance amount | $ 300,000 | $ 2,300,000 | |
Subsequent Event [Member] | JBB Partners, Inc. [Member] | Extension Agreement [Member] | |||
Extended maturity date | Sep. 30, 2020 | ||
Advance amount | $ 100,000 |
Supplemental Oil and Gas Disc_3
Supplemental Oil and Gas Disclosures (Unaudited) (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Extractive Industries [Abstract] | ||
Unevaluated costs | $ 0 | $ 0 |
Standardized measure of discounted future estimated net cash flows rate | 10.00% | 10.00% |
Supplemental Oil and Gas Disc_4
Supplemental Oil and Gas Disclosures (Unaudited) - Schedule of Capitalized Costs Relating to Oil and Gas Producing Activities (Details) - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2017 |
Extractive Industries [Abstract] | |||
Proved oil and gas properties | $ 2,716,102 | $ 2,716,102 | |
Unproved oil and gas properties | |||
Accumulated depreciation, depletion and amortization | (259,292) | (69,760) | $ (56,340) |
Total acquisition, development and exploration costs | $ 2,456,810 | $ 2,646,342 |
Supplemental Oil and Gas Disc_5
Supplemental Oil and Gas Disclosures (Unaudited) - Schedule of Costs Incurred in Oil and Gas Property Acquisition, Exploration, and Development Activities (Details) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Extractive Industries [Abstract] | ||
Acquisition of properties - proved | $ 1,605,000 | |
Acquisition of properties - unproved | ||
Exploration costs | ||
Development costs | ||
Disposition/sale | (5,000) | |
Total costs incurred | $ 1,600,000 |
Supplemental Oil and Gas Disc_6
Supplemental Oil and Gas Disclosures (Unaudited) - Schedule of Estimated Quantities of Proved Oil and Gas Reserves (Details) | 12 Months Ended | |
Feb. 28, 2019MBblsMcfbbl | Feb. 28, 2018MBblsMcfbbl | |
Oil Sales [Member] | ||
Proved reserves: Beginning of year | MBbls | 197,000 | 138,000 |
Proved reserves: Revisions | MBbls | (72,000) | (33,000) |
Proved reserves: Extensions and discoveries | MBbls | ||
Proved reserves: Purchases of minerals-in-place | MBbls | 94,000 | |
Proved reserves: Sales of minerals-in-place | MBbls | ||
Proved reserves: Production | MBbls | (5,000) | (2,000) |
Proved reserves: End of year | MBbls | 120,000 | 197,000 |
Proved developed reserves: Beginning of year | MBbls | 59,000 | 12,000 |
Proved developed reserves: End of year | MBbls | 27,000 | 59,000 |
Proved behind pipe reserves: Beginning of year | MBbls | 138,000 | 54,000 |
Proved behind pipe reserves: End of year | MBbls | 48,000 | 138,000 |
Proved undeveloped reserves: Beginning of year | MBbls | 76,000 | |
Proved undeveloped reserves: End of year | MBbls | 45,000 | |
Natural Gas Sales [Member] | ||
Proved reserves: Beginning of year | Mcf | 4,609,000,000 | 103,000,000 |
Proved reserves: Revisions | Mcf | (2,966,000,000) | (91,000,000) |
Proved reserves: Extensions and discoveries | Mcf | ||
Proved reserves: Purchases of minerals-in-place | Mcf | 4,617,000,000 | |
Proved reserves: Sales of minerals-in-place | Mcf | ||
Proved reserves: Production | Mcf | (107,000,000) | (20,000,000) |
Proved reserves: End of year | Mcf | 1,536,000,000 | 4,609,000,000 |
Proved developed reserves: Beginning of year | Mcf | 861,000,000 | 38,000,000 |
Proved developed reserves: End of year | Mcf | 210,000,000 | 861,000,000 |
Proved behind pipe reserves: Beginning of year | Mcf | 3,747,000,000 | 14,000,000 |
Proved behind pipe reserves: End of year | Mcf | 1,206,000,000 | 3,747,000,000 |
Proved undeveloped reserves: Beginning of year | Mcf | 64,000,000 | |
Proved undeveloped reserves: End of year | Mcf | 120,000,000 | |
BOE [Member] | ||
Proved reserves: Beginning of year | bbl | 966,000,000 | 155,000,000 |
Proved reserves: Revisions | bbl | (567,000,000) | (48,000,000) |
Proved reserves: Extensions and discoveries | bbl | ||
Proved reserves: Purchases of minerals-in-place | bbl | 864,000,000 | |
Proved reserves: Sales of minerals-in-place | bbl | ||
Proved reserves: Production | bbl | (23,000,000) | (5,000,000) |
Proved reserves: End of year | bbl | 376,000,000 | 966,000,000 |
Proved developed reserves: Beginning of year | bbl | 203,000,000 | 18,000,000 |
Proved developed reserves: End of year | bbl | 62,000,000 | 203,000,000 |
Proved behind pipe reserves: Beginning of year | bbl | 763,000,000 | 57,000,000 |
Proved behind pipe reserves: End of year | bbl | 249,000,000 | 763,000,000 |
Proved undeveloped reserves: Beginning of year | bbl | 86,000,000 | |
Proved undeveloped reserves: End of year | bbl | 65,000,000 |
Supplemental Oil and Gas Disc_7
Supplemental Oil and Gas Disclosures (Unaudited) - Schedule of Estimated Present Value of Future Cash Flows Relating to Prove Reserves (Details) | 12 Months Ended | |
Feb. 28, 2019MBblsMcf | Feb. 28, 2018MBblsMcf | |
Oil (Bbl) Using NYMEX WTI [Member] | ||
Average price | MBbls | 63.43 | 53.49 |
Gas (Mcf) Using NYMEX Henry Hub [Member] | ||
Average price | Mcf | 3.04 | 3 |
Supplemental Oil and Gas Disc_8
Supplemental Oil and Gas Disclosures (Unaudited) - Schedule of Discounted Future Net Cash Flows Relating to Proven Reserves (Details) - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2017 |
Extractive Industries [Abstract] | |||
Future cash inflows | $ 12,571,000 | $ 24,391,000 | |
Production costs | (3,762,000) | (4,530,000) | |
Future tax expense | (1,070,000) | (2,209,000) | |
Future development costs | (516,000) | (950,000) | |
Future net cash flows | 7,223,000 | 16,702,000 | |
10% annual discount for estimated timing of cash flows | (3,808,000) | (8,755,000) | |
Standardized measure of discounted net cash flows | $ 3,415,000 | $ 7,947,000 | $ 2,544,000 |
Supplemental Oil and Gas Disc_9
Supplemental Oil and Gas Disclosures - Schedule of Discounted Future Net Cash Flows Relating to Proven Reserves (Details) (Parenthetical) | Feb. 28, 2019 | Feb. 28, 2018 |
Extractive Industries [Abstract] | ||
Percentage of discount | 10.00% | 10.00% |
Supplemental Oil and Gas Dis_10
Supplemental Oil and Gas Disclosures (Unaudited) - Summary of Changes in Standardized Measure of Discounted Future Net Cash Flows (Details) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Extractive Industries [Abstract] | ||
Beginning of year | $ 7,947,000 | $ 2,544,000 |
Sales of oil produced, net of production costs | (288,000) | 1,595,000 |
Net changes in sales and transfer prices and in production costs and production costs related to future production | 15,804,000 | (10,443,000) |
Previously estimated development costs incurred during the period | ||
Changes in future development costs | (435,000) | 950,000 |
Revisions of previous quantity estimates due to prices and performance | (5,138,000) | (649,000) |
Accretion of discount | 795,000 | 254,000 |
Discoveries, net of future production and development costs associated with these extensions and discoveries | ||
Purchases and sales of minerals in place | 6,894,000 | |
Timing and other | (15,270,000) | 6,802,000 |
End of year | $ 3,415,000 | $ 7,947,000 |