| NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Basis of Presentation of Interim Financial
Statements The accompanying unaudited financial statements
have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions
for Form 10-Q and Article 210 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered
necessary for a fair presentation have been included. All such adjustments are of a normal recurring nature. Operating results
for the three months ended June, 2018, are not necessarily indicative of the results that may be expected for the fiscal year ending
March 31, 2019. For further information, refer to the financial statements and footnotes thereto included in the Company’s
Annual Report on Form 10-K for the fiscal year ended March 31, 2018 as filed with the Securities and Exchange Commission on July
23, 2018. Use of Estimates The preparation of financial statements in
conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could
differ from those estimates. These estimates are reviewed periodically, and, as adjustments become necessary, they are reported
in earnings in the period in which they become known. The estimates on depreciation were based on the estimated useful lives of
the Company’s assets. Any estimates during the period have had an immaterial effect on earnings. Cash and Cash Equivalents Cash and cash equivalents consist of commercial
accounts and interest-bearing bank deposits and are carried at cost, which approximates current value. Items are considered to
be cash equivalents if the original maturity is three months or less. Oil and Gas Properties – Full Cost
Method The Company follows the full cost accounting
method to account for oil and natural gas properties, whereby costs incurred in the acquisition, exploration and development of
oil and gas reserves are capitalized. Such costs include lease acquisition, geological and geophysical activities, rentals on nonproducing
leases, drilling, completing and equipping of oil and gas wells and administrative costs directly attributable to those activities
and asset retirement costs. Disposition of oil and gas 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 to operations. The capitalized costs of oil and gas properties,
excluding unevaluated and unproved properties, are amortized as depreciation, depletion and amortization expense using the units-of-production
method based on estimated proved recoverable oil and gas reserves. The costs associated with unevaluated and unproved
properties, initially excluded from the amortization base, relate to unproved leasehold acreage, wells and production facilities
in progress and wells pending determination of the existence of proved reserves, together with capitalized interest costs for these
projects. Unproved leasehold costs are transferred to the amortization base with the costs of drilling the related well once a
determination of the existence of proved reserves has been made or upon impairment of a lease. Costs associated with wells in progress
and completed wells that have yet to be evaluated are transferred to the amortization base once a determination is made whether
or not proved reserves can be assigned to the property. Costs of dry wells are transferred to the amortization base immediately
upon determination that the well is unsuccessful. All items classified as unproved property are
assessed on a quarterly basis for possible impairment or reduction in value. Properties are assessed on an individual basis or
as a group if properties are individually insignificant. The assessment includes consideration of various factors, including, but
not limited to, the following: intent to drill; remaining lease term; geological and geophysical evaluations; drilling results
and activity; assignment of proved reserves; and economic viability of development if proved reserves are assigned. During any
period in which these factors indicate an impairment, the cumulative drilling costs incurred to date for such property and all
or a portion of the associated leasehold costs are transferred to the full cost pool and become subject to amortization. Under full cost accounting rules for each cost
center, capitalized costs of evaluated oil and gas properties, including asset retirement costs, less accumulated amortization
and related deferred income taxes, may not exceed an amount (the “cost ceiling”) equal to the sum of (a) the present
value of future net cash flows from estimated production of proved oil and gas reserves, based on current prices and operating
conditions, discounted at ten percent (10%), plus (b) the cost of properties not being amortized, plus (c) the lower of cost or
estimated fair value of any unproved properties included in the costs being amortized, less (d) any income tax effects related
to differences between the book and tax basis of the properties involved. If capitalized costs exceed this limit, the excess is
charged to operations. For purposes of the ceiling test calculation, current prices are defined as the unweighted arithmetic average
of the first day of the month price for each month within the 12-month period prior to the end of the reporting period. Prices
are adjusted for basis or location differentials. Unless sales contracts specify otherwise, prices are held constant for the productive
life of each well. Similarly, current costs are assumed to remain constant over the entire calculation period. Revenue Recognition Oil and gas sales result from undivided interests
held by the Company in oil and gas properties and royalty revenues. Sales of oil and gas produced from oil and gas operations are
recognized when the product is delivered to the purchaser and title transfers to the purchaser. Charges for gathering and transportation
are included in production expenses. Revenue from royalties is recognized as they
are earned, when collection is reasonably assured. Royalty revenue is recorded in the same period as the sales that generate the
royalty payment. Asset Retirement Obligations The Company records a liability for asset retirement
obligations (“ARO”) associated with its oil and gas wells when those assets are placed in service. The corresponding
cost is capitalized as an asset and included in the carrying amount of oil and gas properties and is depleted over the useful life
of the properties. Subsequently, the ARO liability is accreted to its then-present value. Inherent in the fair value calculation of an
ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount
rates, timing of settlement, and changes in the legal, regulatory, environmental and political environments. To the extent future
revisions to these assumptions impact the fair value of the existing ARO liability, a corresponding adjustment is made to the oil
and gas property balance. Settlements greater than or less than amounts accrued as ARO are recorded as a gain or loss upon settlement. Fair Value of Financial Instruments The Company measures its financial assets and
liabilities in accordance with the requirements of ASC 820, Fair Value Measurements and Disclosures. ASC 820 clarifies the definition
of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used
in measuring fair value as follows: Level 1 - Inputs are unadjusted quoted prices
in active markets for identical assets or liabilities available at the measurement date. Level 2 - Inputs are unadjusted quoted prices
for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets
that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable
market data. Level 3 - Inputs are unobservable inputs which
reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset
or liability based on the best available information, The carrying value of all assets and liabilities
approximated their fair values as June 30, 2018 and March 31, 2018, respectively. Stock-Based Compensation The Company follows the guidance included in
ASC 718 Compensation-Stock Compensation (“ASC 718”) using the modified prospective transition method. The Company recognizes
compensation expense in the financial statements for share-based awards based on the grant date fair value of those awards. Recent Accounting Pronouncements The Company has implemented all new accounting
pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new
accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
The Company regularly reviews and analyses the recent accounting pronouncements. |
