Arête Industries (ARET) 10-Q 14 Aug 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	May. 15, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2
Trading Symbol	ARET
Entity Registrant Name	ARETE INDUSTRIES INC
Entity Central Index Key	820,901
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		12,714,599

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Current Assets:
Cash and equivalents	$ 6,278	$ 30,755
Receivable from DNR Oil & Gas, Inc.:
Oil and gas sales, net of production costs	86,630	103,668
Other	8,710	78,273
Prepaid expenses and other	34,088	34,222
Total Current Assets	135,706	246,918
Oil and gas properties, at cost, successful efforts method:
Proved properties	10,296,369	10,222,668
Unevaluated properties	348,836	348,836
Natural gas gathering system	442,195	442,195
Furniture and equipment	22,522	22,522
Total property and equipment	11,109,922	11,036,221
Less accumulated depreciation, depletion and amortization	(3,169,890)	(2,840,173)
Net Property and Equipment	7,940,032	8,196,048
TOTAL ASSETS	8,075,738	8,442,966
Payable to DNR Oil & Gas, Inc.:
Operator fees and other	36,000	36,000
Unrelated parties	76,326	43,365
Notes and advances payable - current portion:
Directors and affiliates	288,567	288,258
Unrelated parties	932,400	872,239
Accrued interest expense	25,654	3,279
Accrued consulting - related party	23,700	21,800
Director fees payable in common stock	0	20,900
Current portion of asset retirement obligations	192,994	191,843
Other accrued costs and expenses	118,121	63,642
Total Current Liabilities	1,693,762	1,541,326
Long-Term Liabilities:
Contingent acquisition costs payable to DNR Oil & Gas, Inc.	250,000	250,000
Notes and advances payable, net of current portion:
DNR Oil & Gas, Inc.	792,151	792,151
Directors and affiliates	53,573	62,440
Unrelated parties	59,662	63,534
Asset retirement obligations, net of current portion	590,654	557,170
Total Long-Term Liabilities	1,746,040	1,725,295
Total Liabilities	3,439,801	3,266,621
Stockholders' Equity:
Common stock, no par value; authorized 499,000,000 shares, issued and outstanding 12,558,459 in 2014 and 12,963,747 in 2015	21,357,620	21,294,887
Accumulated deficit	(16,721,683)	(16,118,542)
Total Stockholders' Equity	4,635,937	5,176,345
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	8,075,738	8,442,966
Series 1
Stockholders' Equity:
Convertible Class A preferred stock; $10,000 face value per share, authorized 1,000,000 shares: Series 1; authorized 30,000 shares, issued and outstanding no shares in 2014 and no shares in 2015, liquidation preference of $0 in 2014 and of $0 in 2015 Series 2; authorized 2,500 shares, no shares issued and outstanding in 2014 and 2015	0	0
Series 2
Stockholders' Equity:
Convertible Class A preferred stock; $10,000 face value per share, authorized 1,000,000 shares: Series 1; authorized 30,000 shares, issued and outstanding no shares in 2014 and no shares in 2015, liquidation preference of $0 in 2014 and of $0 in 2015 Series 2; authorized 2,500 shares, no shares issued and outstanding in 2014 and 2015	$ 0	$ 0

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2015	Dec. 31, 2014
Convertible Class A
Convertible preferred stock, face value	$ 10,000
Convertible preferred stock, shares authorized	1,000,000
Series 1
Convertible preferred stock, shares authorized	30,000
Convertible preferred stock, shares issued	0	0
Convertible preferred stock, shares outstanding	0	0
Series 2
Convertible preferred stock, shares authorized	2,500
Convertible preferred stock, shares issued	0	0
Convertible preferred stock, shares outstanding	0	0
Common Stock
Common stock, shares authorized	499,000,000
Common stock, shares issued	12,963,747	12,408,459
Common stock, shares outstanding	12,963,747	12,408,459

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Revenues:
Oil and natural gas sales	$ 234,560	$ 669,488	$ 477,225	$ 1,165,239
Sale of oil and natural gas properties	0	78,815	27,120	242,472
Royalty revenue	3,000	963	3,941	1,770
Total revenues	508,286	749,266	508,286	1,409,481
Oil and gas producing activities:
Lease operating expenses	198,069	208,566	414,865	369,934
Production taxes	19,374	58,589	37,799	91,646
Depreciation, depletion, amortization and accretion	133,988	162,182	341,957	291,845
Gas gathering:
Operating expenses	0	3,385	1,406	7,370
Depreciation	11,055	11,055	22,110	22,110
General and administrative expenses:
Director fees	12,000	450	22,000	450
Investor relations	7,465	29,621	10,628	35,186
Legal, auditing and professional services	61,290	34,596	73,855	78,644
Consulting and executive services:
Related parties	36,000	97,500	83,400	127,500
Other administrative expenses	25,285	19,307	44,439	41,082
Depreciation	143	142	285	285
Total operating expenses	504,669	625,393	1,052,747	1,066,052
Operating loss	(267,108)	123,873	(544,461)	343,429
Other income (expense):
Interest income (expense), net	(31,522)	(34,808)	(58,680)	(69,978)
Total other expense	(31,522)	(34,808)	(58,680)	(69,978)
Income (loss) before income taxes	(298,631)	89,065	(603,141)	273,451
Income tax benefit (expense)	0	0	0	0
Net income (loss)	(298,631)	89,065	(603,141)	273,451
Net Income Applicable to Common Stockholders:
Net income (loss)	(298,631)	89,065	(603,141)	273,451
Accrued preferred stock dividends	0	(3,750)	0	(7,500)
Net income (loss) applicable to common stockholders	$ (298,631)	$ 85,315	$ (603,141)	$ 265,951
Earnings (Loss) Per Share Applicable to Common Stockholders:
Basic	$ (0.02)	$ 0.01	$ (0.05)	$ 0.02
Diluted	$ (0.02)	$ 0.01	$ (0.05)	$ 0.02
Weighted Average Number of Common Shares Outstanding:
Basic	12,753,000	12,408,000	12,732,000	12,607,000
Diluted	12,753,000	12,408,000	12,732,000	12,607,000

CONSOLIDATED STATEMENTS OF STOC

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - 6 months ended Jun. 30, 2015 - USD ($)	Common Stock [Member]	Retained Earnings [Member]	Total
Balances at Dec. 31, 2014	$ 21,294,887	$ (16,118,542)	$ 5,176,345
Balances (in shares) at Dec. 31, 2014	12,558,459
Common stock issued for services (related party)	$ 19,833		$ 19,833
Common stock issued for services (related party), shares	133,333		133,333
Common stock issued for directors fees	$ 42,900		$ 42,900
Common stock issued for director's fees, shares	271,955		271,955
Net Income (loss)		(603,141)	$ (603,141)
Balances at Jun. 30, 2015	$ 21,357,620	$ (16,423,052)	$ 4,934,568
Balances (in shares) at Jun. 30, 2015	12,963,747

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash Flows from Operating Activities:
Net income (loss)	$ (603,141)	$ 273,451
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization	329,717	281,110
Accretion of discount on asset retirement obligations	34,635	33,130
Gain on sale of oil and gas properties	(27,120)	(242,472)
Common stock issued in exchange for services	28,500	0
Changes in operating assets and liabilities:
Accounts receivable	(86,601)	(202,735)
Prepaid expenses and other	13,467	(4,473)
Accounts payable	29,496	357,932
Directors fees and officers services payable	0	67,950
Accrued costs and expenses	78,754	36,487
Net cash provided by (used in) operating activities	(29,091)	600,380
Cash Flows from Investing Activities:
Capital expenditures for property and equipment	93,116	(620,458)
Proceeds from sale of oil and gas properties	50,000	191,189
Net cash provided by (used in) investing activities	(43,116)	(429,269)
Cash Flows from Financing Activities:
Proceeds from notes and advance payable	60,000	532,641
Principal payments on notes payable	(12,270)	(935,966)
Redemption of common stock	0	(228,000)
Net cash provided by (used in) financing activities	47,730	(631,325)
Net increase (decrease) in cash and equivalents	(24,477)	(460,214)
Cash and equivalents, beginning of period	30,755	476,323
Cash and equivalents, end of period	6,278	16,109
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest	34,838	55,651
Cash paid for income taxes	0	0
Supplemental Disclosure of Non-cash Investing and Financing Activities:
Additions to oil & gas property financed in accounts payable	3,465	0
Common Stock Issued as a prepayment for services	13,333	0
Common Stock issued for directors fees payable	$ 20,900	$ 0

Organization and Nature of Oper

Organization and Nature of Operations	6 Months Ended
	Jun. 30, 2015
Accounting Policies [Abstract]
Organization and Nature of Operations	Arête Industries, Inc. ("Arête" or the "Company"), is a Colorado corporation that was incorporated on July 21, 1987. The Company owns 100% of Arete Energy, Inc. which is an inactive subsidiary which has no assets, liabilities or operations. Arête has operated a natural gas gathering system in Wyoming since 2006 and on July 29, 2011, the Company purchased oil & natural gas properties in Colorado, Montana, Kansas, and Wyoming. The Company seeks to focus on acquiring interests in traditional oil and gas ventures, and seek properties that offer profit potential from overlooked and by-passed reserves of oil and natural gas, which may include shut-in wells, in-field development, stripper wells, re-completion and re-working projects. In addition, the Company's strategy includes purchase and sale of acreage prospective for oil and natural gas and seeking to obtain cash flow from the sale and farm out of such prospects.

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2015
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Basis of presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information. They do not include all information and notes required by GAAP for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the notes to consolidated financial statements included in Arête's Annual Report on Form 10-K for the year ended December 31, 2014. In the opinion of management, the accompanying unaudited financial statements contain all adjustments, consisting of normal recurring accruals necessary for a fair presentation of the financial position as of December 31, 2014, and June 30, 2015, and the results of operations, changes in stockholders' equity, and cash flows for the quarters ended June 30, 2014, and 2015. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for a full year. The Company's 2014 Annual Report on Form 10-K includes certain definitions and a summary of significant accounting policies and should be read in conjunction with this Form 10-Q. In connection with the preparation of its unaudited condensed consolidated financial statements, the Company evaluated events subsequent to the balance sheet date of June 30, 2015, through the filing date of this report. Use of Estimates Preparation of the Company's financial statements in accordance with GAAP requires management to make various assumptions, judgments and estimates that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Changes in these assumptions, judgments and estimates will occur as a result of the passage of time and the occurrence of future events and, accordingly, actual results could differ from amounts initially established. The most significant areas requiring the use of assumptions, judgments and estimates relate to the volumes of natural gas and oil reserves used in calculating depreciation, depletion and amortization ("DD&A"), the amount of expected future cash flows used in determining possible impairments of oil and gas properties and the amount of future capital costs used in these calculations. Assumptions, judgments and estimates also are required in determining future asset retirement obligations, impairments of undeveloped properties, and in valuing stock-based payment awards. The only component of comprehensive income that is applicable to the Company is net income (loss). Accordingly, a separate statement of comprehensive income (loss) is not included in these financial statements. Principles of Consolidation The consolidated financial statements of the Company include the accounts of Arête and its inactive subsidiary, Arete Energy, Inc. All intercompany accounts and transactions have been eliminated in consolidation. Earnings per share Basic net income (loss) per share of common stock is calculated by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during each period. Diluted net income (loss) attributable to common stockholders is calculated by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding and other dilutive securities. New Accounting Pronouncements In April 2015, the FASB issued new authoritative accounting guidance requiring debt issuance costs to be presented on the balance sheet as a direct deduction from the carrying value of the related debt liability. This guidance is to be applied using a retrospective method and is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early application is permitted. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company's financial statements and disclosures. There are no other new significant accounting standards applicable to the Company that have been issued but not yet adopted by the Company as of June 30, 2015, and through the filing date of this report that have not been disclosed above or in the 2014 Form 10-K.

Oil and Gas Properties

Oil and Gas Properties	6 Months Ended
	Jun. 30, 2015
Extractive Industries [Abstract]
Oil and Gas Properties	The 1) The Thielen #1-21 is in Section 21 Township 43N Campbell County Wyoming. This well was drilled to a total depth of approximately 15,350 including the lateral. The Company has an approximate 1.06% working interest and the well is producing. 2) The Thielen #2-21 is in Section 21 Township 43N Campbell County Wyoming. This well was drilled to a total depth of approximately 15,330 feet including the lateral. The Company has an approximate 1.06% working interest and the well is producing. 3) The Starlight Federal 28H is located in Section 7, Township 43N Campbell County Wyoming. This well was drilled to a total depth of approximately 15,310 including the lateral. The Company has an approximate 0.7025% working interest and the well is producing. 4) The Starlight Federal 30H is located in Section 7, Township 43N Campbell County Wyoming. This well was drilled to a total depth of approximately 15,310 including the lateral. The Company has an approximate 1.450088% working interest and the well is producing. 5) The Wibaux Gold Federal 4076-10-03-1SH is located in Section 10, Township 43N Converse County Wyoming. This well was drilled to a total depth of approximately 20,185 including the lateral. The Company has an approximate 0.2697755% working interest and the well is producing.

Income taxes

Income taxes	6 Months Ended
	Jun. 30, 2015
Income Tax Disclosure [Abstract]
Income taxes	The book to tax temporary differences resulting in deferred tax assets and liabilities are primarily net operating loss carry forwards of approximately $8.2 million which expire in 2018 through 2030. A 100% valuation allowance has been established against the deferred tax assets, as utilization of the loss carry forwards and realization of other deferred tax assets cannot be reasonably assured. For the quarter ended June 30, 2015, the Company did not recognize any income tax benefit due to the valuation allowance.

Stock transactions and preferre

Stock transactions and preferred stock dividends	6 Months Ended
	Jun. 30, 2015
Equity [Abstract]
Stock transactions and preferred stock dividends	During the six month period ended June 30, 2015, the Company issued 405,288 shares of common stock for compensation for services; 106,140 shares of common stock were issued for board services at $0.20 per share in 2014 and 165,815 shares of common stock were issued for board services at $0.13 per share in 2015, and 50,000 and 83,333 shares of common stock were issued at $0.13 and $0.16, respectively, for service and consulting by three related parties.

Notes and advances payable

Notes and advances payable	6 Months Ended
	Jun. 30, 2015
Text Block [Abstract]
Notes and advances payable	Notes payable consist of the following as of the date indicated: December 31, 2014 June 30, 2015 Officers, directors and affiliates: Note payable, interest at 7.5%, due March 2016 $ 150,000 $ 150,000 Notes payable, interest 7.0%, due January 2017 79,970 71,412 Notes payable, interest varies (see explanation below) 792,151 792,151 Collateralized note payable (see below) 120,728 120,728 Total officers, directors and affiliates 1,142,849 1,134,291 Less: Current portion of officers, directors, and affiliates 288,258 288,567 Long-term portion of officers, directors, and affiliates $ 854,591 $ 845,724 Unrelated parties: Notes payable, interest at 7.5%, due March 2016 $ 100,000 $ 100,000 Note payable, interest variable (see below) 549,105 609,105 Note payable, interest at 7.0%, due August 2016 62,000 62,000 Notes payable, interest at 7.0%, due January 2017 41,668 37,956 Notes payable, interest at 7.0%, due August 2015 183,000 183,000 Total unrelated parties 935,773 992,061 Less: Current portion of unrelated parties 872,239 932,400 Long-term portion of unrelated parties $ 63,534 $ 59,661 On April 29, 2013, the Company executed a promissory note under which the Company agreed to pay Apex Financial Services Corp, a Colorado corporation, ("Apex") the principal sum of $1,000,000, with interest accruing at an annual rate of 7.5%, with principal and interest due on May 31, 2014. The Company also agreed to assign 75% of its operating income from its oil and gas operations and any lease or well sale or any other assets sales to Apex to secure the debt. Apex is 100% owned by the CEO, director, and shareholder of the Company, Nicholas L. Scheidt. The Company borrowed the full amount of principal on the note, and also paid a loan fee of $10,000. In the event of default on the note and failure to cure the default in ten days, Apex may accelerate payment and the annual interest rate on the note will accrue at 18%. Default includes failure to pay the note when due or if the Company borrows any other monies or offers security in the Company or in the collateral securing the note prior to the note being paid in full. The outstanding principal balance as of March 31, 2015 was $120,728. During March 2015, the Company and Apex entered into an amendment extending the maturity date to March 30, 2016. On January 28, 2014, the Company entered into a line of credit loan agreement for $1,500,000 due January 15, 2015 extended to October 28, 2015. The terms of the note are as follows: 1) the accrued interest is payable monthly starting February 28, 2014, 2) the interest rate is variable based on an index calculated based on a prime rate as published by the Wall Street Journal index (currently 3.25%) plus an add on index with the current and minimum rate of 6.5%., the note has draw provisions, with the first draw of $479,701 4) the note is secured by seven wells and leases owned by the Company, a certificate of deposit for $500,000 at CityWide Bank pledged by a related party, and 5) the personal guarantee of the Nicholas Scheidt, Chief Executive Officer. The amount eligible for borrowing on the Credit Facility is limited to the lesser of (i) 65% of the Company's PV10 value of its carbon reserves based upon the most current engineering reserve report or (ii) 48 month cumulative cash flow based upon the most current engineering reserve report. In addition to the borrowing base limitation, the Company is required to maintain and meet certain affirmative and negative covenants and conditions in order to draw advances on the Credit Facility. The Credit Facility contains certain representations, warranties, and affirmative and negative covenants applicable to the Company, which are customarily applicable to senior secured loan facilities. Key covenants include limitations on indebtedness, restricted payments, creation of liens on oil and gas properties, hedging transactions, mergers and consolidations, sales of assets, use of loan proceeds, change in business, and change in control. The above-referenced promissory notes contain customary default and acceleration provisions and provide for a default interest rate of 21% per annum. In addition, the Credit Facility contains customary events of default, including: (a) failure to pay any obligations when due; (b) failure to comply with certain restrictive covenants; (c) false or misleading representations or warranties; (d) defaults of other indebtedness; (e) specified events of bankruptcy, insolvency or similar proceedings; (f) one or more final, non-appealable judgments in excess of $50,000 that is not covered by insurance; (g) change in control (25% threshold); (h) negative events affecting the Guarantor; and (i) lender in good faith believes itself insecure. In an event of default arising from the specified events, the Credit Facility provides that the commitments thereunder will terminate and the Lender may take such other actions as permitted including, declaring any principal and accrued interest owed on the line of credit to become immediately due and payable. The Credit Facility is secured by a security interest in substantially all of the assets of the Company, pursuant to a Security Agreement, Deed of Trust and Assignment of As-Extracted Collateral entered into between the Company and Citywide Banks. The outstanding principal balance as of June 30, 2015 was $609,105. On January 1, 2014, we memorialized our short-term liabilities into formal promissory notes. These certain outstanding advances and other notes payable are now included in single promissory notes, all have been reported previously in our financial statements. Information concerning these promissory notes is set forth in the table below. Name of Holder Position Principal Amount Interest Rate Monthly P&I Payment Amount Number of Monthly Payments Donald W. Prosser Director $ 28,500 7.00 % $ 564.33 60 Charles B. Davis COO & Director $ 66,500 7.00 % $ 1,316.78 60 William Stewart (Sold to an unrelated party) Director $ 49,500 7.00 % $ 980.16 36 The above-referenced promissory notes contain customary default and acceleration provisions and provide for a default interest rate of 18% per annum. The outstanding principal balances as of June 30, 2015 was $71,412. In addition, we also issued an unsecured promissory note in the amount of $792,151 on January 1, 2014 to DNR Oil & Gas, Inc. ("DNR"). DNR is a company controlled by the Chief Operating Officer and director, Charles B. Davis. The DNR note accrues interest at the rate of 2.50% for the calendar years 2014 and 2015, 4.00% for the calendar year 2016, 6.00% for the calendar year 2017 and 8.00% for the remainder of the term of the DNR note. The DNR note matures on January 1, 2019. The DNR note requires payments as follows: · One payment of $250,000 in 2016; · One payment of $250,000 in 2017; · One payment of $250,000 in 2018; and · The balance of principal and accrued interest on or before January 1, 2019. The DNR note contains customary default and acceleration provisions and provides for a default interest rate of 18% per annum. The note is subordinated to the Bank Line of Credit. The outstanding principal balance as of June 30, 2015 was $792,151. In June 2013, in connection with the conversions of Series A1 Preferred Stock by Burlingame Equity Investors II, LP and Burlingame Equity Investors Master Fund, LP, the Company issued unsecured promissory notes in the original principal amounts of $48,000 and $552,000, respectively, with interest at 7% per annum payable quarterly and all unpaid interest and principal due on July 23, 2014. The Company entered into an extension agreement with the holders of these two existing notes, whereby the Company made a principal payment on the balance in exchange for an extension of the maturity date to January 15, 2015, and entered into another extension agreement further extending the maturity date to October 28, 2015. Information concerning the principal pay down is set forth in the following table. Name of Holder Principal Balance Before Pay down Principal Pay down Remaining Principal Balance Burlingame Equity Investors II, LP $ 44,000 $ 26,251 $ 17,749 Burlingame Equity Investors Master Fund, LP 506,000 $ 340,749 $ 165,251 On August 15, 2014, the Company executed a Promissory Note to an individual for the redemption of 10 shares of Series A-1 Preferred Stock. The terms of the Promissory Note are as follows: $62,000 with an interest rate of 7% payable in two payments of $31,000 each plus interest, due August 15, 2015, and August 15, 2016, respectively. All of the notes payable shown above are unsecured, except the Apex note. Accrued interest on notes amounted to $3,279 as of December 31, 2014 and $25,654 as of June 30, 2015.

Asset retirement obligations (A

Asset retirement obligations (ARO)	6 Months Ended
	Jun. 30, 2015
Asset Retirement Obligation Disclosure [Abstract]
Asset retirement obligations (ARO)	A reconciliation of the Company's asset retirement obligations for the quarter ended June 30, 2015, is as follows: Balance, December 31, 2014 $ 749,013 Liabilities incurred — Accretion expense 34,635 Revisions to estimate — Balance, June 30, 2015 783,648 Less current asset retirement obligations (192,994 ) Long-term asset retirement obligations $ 590,654

Subsequent events

Subsequent events	6 Months Ended
	Jun. 30, 2015
Subsequent Events [Abstract]
Subsequent events	There are no material subsequent events after June 30, 2015.

Summary of Significant Accoun15

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2015
Accounting Policies [Abstract]
Basis of presentation	The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information. They do not include all information and notes required by GAAP for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the notes to consolidated financial statements included in Arête's Annual Report on Form 10-K for the year ended December 31, 2014. In the opinion of management, the accompanying unaudited financial statements contain all adjustments, consisting of normal recurring accruals necessary for a fair presentation of the financial position as of December 31, 2014, and June 30, 2015, and the results of operations, changes in stockholders' equity, and cash flows for the quarters ended June 30, 2014, and 2015. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for a full year. The Company's 2014 Annual Report on Form 10-K includes certain definitions and a summary of significant accounting policies and should be read in conjunction with this Form 10-Q. In connection with the preparation of its unaudited condensed consolidated financial statements, the Company evaluated events subsequent to the balance sheet date of June 30, 2015, through the filing date of this report.
Use of Estimates	Preparation of the Company's financial statements in accordance with GAAP requires management to make various assumptions, judgments and estimates that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Changes in these assumptions, judgments and estimates will occur as a result of the passage of time and the occurrence of future events and, accordingly, actual results could differ from amounts initially established. The most significant areas requiring the use of assumptions, judgments and estimates relate to the volumes of natural gas and oil reserves used in calculating depreciation, depletion and amortization ("DD&A"), the amount of expected future cash flows used in determining possible impairments of oil and gas properties and the amount of future capital costs used in these calculations. Assumptions, judgments and estimates also are required in determining future asset retirement obligations, impairments of undeveloped properties, and in valuing stock-based payment awards. The only component of comprehensive income that is applicable to the Company is net income (loss). Accordingly, a separate statement of comprehensive income (loss) is not included in these financial statements.
Principles of Consolidation	The consolidated financial statements of the Company include the accounts of Arête and its inactive subsidiary, Arete Energy, Inc. All intercompany accounts and transactions have been eliminated in consolidation.
Earnings per share	Basic net income (loss) per share of common stock is calculated by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during each period. Diluted net income (loss) attributable to common stockholders is calculated by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding and other dilutive securities.
New Accounting Pronouncements	In April 2015, the FASB issued new authoritative accounting guidance requiring debt issuance costs to be presented on the balance sheet as a direct deduction from the carrying value of the related debt liability. This guidance is to be applied using a retrospective method and is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early application is permitted. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company's financial statements and disclosures. There are no other new significant accounting standards applicable to the Company that have been issued but not yet adopted by the Company as of June 30, 2015, and through the filing date of this report that have not been disclosed above or in the 2014 Form 10-K.

Notes and advances payable (Tab

Notes and advances payable (Tables)	6 Months Ended
	Jun. 30, 2015
Text Block [Abstract]
Notes and Advances Payable	Notes payable consist of the following as of the date indicated: December 31, 2014 June 30, 2015 Officers, directors and affiliates: Note payable, interest at 7.5%, due March 2016 $ 150,000 $ 150,000 Notes payable, interest 7.0%, due January 2017 79,970 71,412 Notes payable, interest varies (see explanation below) 792,151 792,151 Collateralized note payable (see below) 120,728 120,728 Total officers, directors and affiliates 1,142,849 1,134,291 Less: Current portion of officers, directors, and affiliates 288,258 288,567 Long-term portion of officers, directors, and affiliates $ 854,591 $ 845,724 Unrelated parties: Notes payable, interest at 7.5%, due March 2016 $ 100,000 $ 100,000 Note payable, interest variable (see below) 549,105 609,105 Note payable, interest at 7.0%, due August 2016 62,000 62,000 Notes payable, interest at 7.0%, due January 2017 41,668 37,956 Notes payable, interest at 7.0%, due August 2015 183,000 183,000 Total unrelated parties 935,773 992,061 Less: Current portion of unrelated parties 872,239 932,400 Long-term portion of unrelated parties $ 63,534 $ 59,661
Related Party Notes Payable	Name of Holder Position Principal Amount Interest Rate Monthly P&I Payment Amount Number of Monthly Payments Donald W. Prosser Director $ 28,500 7.00 % $ 564.33 60 Charles B. Davis COO & Director $ 66,500 7.00 % $ 1,316.78 60 William Stewart (Sold to an unrelated party) Director $ 49,500 7.00 % $ 980.16 36
Information concerning principal pay down and new maturity date	Name of Holder Principal Balance Before Pay down Principal Pay down Remaining Principal Balance Burlingame Equity Investors II, LP $ 44,000 $ 26,251 $ 17,749 Burlingame Equity Investors Master Fund, LP 506,000 $ 340,749 $ 165,251

Asset retirement obligations 17

Asset retirement obligations (ARO) (Tables)	6 Months Ended
	Jun. 30, 2015
Asset Retirement Obligation Disclosure [Abstract]
Reconciliation of Asset Retirement Obligations (ARO)	Balance, December 31, 2014 $ 749,013 Liabilities incurred — Accretion expense 34,635 Revisions to estimate — Balance, June 30, 2015 783,648 Less current asset retirement obligations (192,994 ) Long-term asset retirement obligations $ 590,654

Organization and Nature of Op18

Organization and Nature of Operations - Additional Information (Details Narrative)	Jun. 30, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Ownership percentage of Arete Energy, Inc.	100.00%

Stock Transactions and Prefer19

Stock Transactions and Preferred Stock Dividends - Additional Information (Detail) - shares	3 Months Ended	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Jun. 30, 2015	Dec. 31, 2014
Uncategorized [Abstract]
Common stock issued for compensation or services	405,288
Common stock issued for board service		271,955	271,955
Common stock issued for services and consulting		133,333	133,333

Notes and Advances Payable (Det

Notes and Advances Payable (Detail) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Notes Payable [Line Items]
Current portion of officers, directors, and affiliates	$ 288,567	$ 288,258
Long-term portion of officers, directors, and affiliates	53,573	62,440
Less: Current portion of unrelated parties	932,400	872,239
Long-term portion of unrelated parties	59,662	63,534
Officers Directors And Affiliates [Member]
Notes Payable [Line Items]
Notes payable, related parties	1,134,291	1,142,849
Current portion of officers, directors, and affiliates	288,567	288,258
Long-term portion of officers, directors, and affiliates	845,724	854,591
Unrelated Parties [Member]
Notes Payable [Line Items]
Notes and advances payable, unrelated parties	992,061	935,773
Less: Current portion of unrelated parties	932,400	872,239
Long-term portion of unrelated parties	59,661	63,534
Note Payable Interest At Seven Point Five Percent Due March Twenty Sixteen [Member] | Officers Directors And Affiliates [Member]
Notes Payable [Line Items]
Notes payable, related parties	150,000	150,000
Note Payable Interest At Seven Point Five Percent Due March Twenty Sixteen [Member] | Unrelated Parties [Member]
Notes Payable [Line Items]
Notes and advances payable, unrelated parties	100,000	100,000
Note Payable Interest At Seven Point Zero Percent Due January Twenty Seventeen [Member] | Officers Directors And Affiliates [Member]
Notes Payable [Line Items]
Notes payable, related parties	71,412	79,970
Note Payable Interest At Seven Point Zero Percent Due January Twenty Seventeen [Member] | Unrelated Parties [Member]
Notes Payable [Line Items]
Notes and advances payable, unrelated parties	37,956	41,668
Note Payable Interest at Varies Rate [Member] | Officers Directors And Affiliates [Member]
Notes Payable [Line Items]
Notes payable, related parties	792,151	792,151
Note Payable Interest at Varies Rate [Member] | Unrelated Parties [Member]
Notes Payable [Line Items]
Notes and advances payable, unrelated parties	609,105	549,105
Collateralized Note Payable | Officers Directors And Affiliates [Member]
Notes Payable [Line Items]
Notes payable, related parties	120,728	120,728
Note Payable Interest At Seven Point Zero Percent Due August Twenty Sixteen [Member] | Unrelated Parties [Member]
Notes Payable [Line Items]
Notes and advances payable, unrelated parties	62,000	62,000
Note Payable Interest At Seven Point Zero Percent Due August Twenty Fifteen [Member] | Unrelated Parties [Member]
Notes Payable [Line Items]
Notes and advances payable, unrelated parties	$ 183,000	$ 183,000

Related Party Notes Payable (De

Related Party Notes Payable (Detail) - Jan. 31, 2014	USD ($)mo
Prosser Director
Notes Payable [Line Items]
Principal Amount	$ 28,500
Interest Rate	7.00%
Monthly P&I Payment Amount	$ 564
Number of Monthly Payments | mo	60
Chief Operatingl Officer And Director
Notes Payable [Line Items]
Principal Amount	$ 66,500
Interest Rate	7.00%
Monthly P&I Payment Amount	$ 1,317
Number of Monthly Payments | mo	60
Director
Notes Payable [Line Items]
Principal Amount	$ 49,500
Interest Rate	7.00%
Monthly P&I Payment Amount	$ 980
Number of Monthly Payments | mo	36

Transactions for Cash Considera

Transactions for Cash Consideration, Promissory Notes and Cancellation of Certain Series A1 Preferred Shares (Detail) - Jun. 30, 2015 - USD ($)	Total
Burlingame Equity Investors Two L- p- [Member]
Stockholders Equity Note [Line Items]
Principal Balance Before Pay down	$ 44,000
Principal Pay down	26,251
Remaining Principal Balance	17,749
Burlingame Equity Investors Master Fund L- P- [Member]
Stockholders Equity Note [Line Items]
Principal Balance Before Pay down	506,000
Principal Pay down	340,749
Remaining Principal Balance	$ 165,251

Reconciliation of Asset Retirem

Reconciliation of Asset Retirement Obligations (ARO) (Detail) - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Asset Retirement Obligation Disclosure [Abstract]
Beginning balance	$ 749,013
Liabilities incurred	0
Accretion expense	34,635	$ 33,130
Revisions to estimate	0
Ending balance	783,648
Less current asset retirement obligations	(192,994)		$ (191,843)
Long-term asset retirement obligations	$ 590,654		$ 557,170