Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | May 01, 2016 | Jun. 30, 2015 | |
Document and Entity Information: | |||
Entity Registrant Name | ALPHA ENERGY INC | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Trading Symbol | alpha | ||
Amendment Flag | false | ||
Entity Central Index Key | 855,787 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 16,866,428 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Entity Public Float | $ 0 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash | $ 116 | $ 3,290 |
Prepaid expenses | 2,750 | 2,955 |
Total current assets | 2,866 | 6,245 |
Oil and gas lease, unproved, full cost method | 35,432 | 24,000 |
Total assets | 38,298 | 30,245 |
Current liabilities | ||
Accounts payable | 11,336 | 115 |
Notes payable, related party | 775 | 275 |
Total current liabilities | 12,111 | 390 |
Stockholders' equity | ||
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; none issued or outstanding | 0 | 0 |
Common stock, $0.0001 par value; 65,000,000 shares authorized; 16,866,428 and 16,714,000 issued and outstanding at December 31, 2015 and 2014, respectively | 1,687 | 1,672 |
Additional paid in capital | 81,043 | 69,626 |
Accumulated deficit | (56,543) | (41,443) |
Total stockholders' equity | 26,187 | 29,855 |
Total liabilities and stockholders' equity | $ 38,298 | $ 30,245 |
BALANCE SHEETS PARENTHETICALS
BALANCE SHEETS PARENTHETICALS - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common Stock, par value | $ 0.0001 | $ 0.0001 |
Common Stock, shares authorized | 65,000,000 | 65,000,000 |
Common Stock, shares issued | 16,866,428 | 16,866,428 |
Common Stock, shares outstanding | 16,714,000 | 16,714,000 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue: | ||
Revenues | $ 0 | $ 0 |
Operating expenses | ||
Professional services | 11,665 | 23,105 |
General and administrative | 2,864 | 8,192 |
Total operating expenses | 14,529 | 31,297 |
Loss from operations | (14,529) | (31,297) |
Other income (expense) | ||
Other income | 0 | 7,743 |
Interest expense | (571) | 0 |
Total other expense | (571) | 7,743 |
Provision for income taxes | 0 | 0 |
Net loss | $ (15,100) | $ (23,554) |
Weighted average common shares outstanding, basic and diluted | 16,817,568 | 16,603,590 |
STATEMENT OF CHANGES IN STOCKHO
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Preferred Stock Shares | Preferred Stock Amount | Common Stock Shares | Common Stock Amount | Additional Paid in Capital | Accumulated Deficit | Total |
Balance, at Dec. 31, 2013 | 0 | 0 | 16,314,000 | 1,632 | 39,666 | (17,889) | 23,409 |
Common stock issued for services | 160,000 | 16 | 11,984 | 12,000 | |||
Common stock issued for cash | 240,000 | 24 | 17,976 | 18,000 | |||
Net loss | $ (23,554) | $ (23,554) | |||||
Balance at Dec. 31, 2014 | 16,714,000 | 1,672 | 69,626 | (41,443) | 29,855 | ||
Common stock issued for oil & gas lease, unproved | 152,428 | 15 | 11,417 | 11,432 | |||
Net loss | $ (15,100) | $ (15,100) | |||||
Balance at Dec. 31, 2015 | 16,866,428 | 1,687 | 81,043 | (56,543) | 26,187 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities | ||
Net loss | $ (15,100) | $ (23,554) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Common stock issued for services | 0 | 12,000 |
Changes in operating assets and liabilities | ||
Prepaid expenses | 205 | (2,500) |
Accounts payable | 11,221 | (2,885) |
Net cash used in operating activities | (3,674) | (16,939) |
Cash flows from financing activities | ||
Proceeds from related party notes | 500 | 0 |
Proceeds from sale of common stock | 0 | 18,000 |
Net cash provided by financing activities | 500 | 18,000 |
Net change in cash | (3,174) | 1,061 |
Cash, beginning of period | 3,290 | 2,229 |
Cash, end of period | 116 | 3,290 |
Supplemental cash flow information | ||
Cash paid for interest | 0 | 0 |
Cash paid for income taxes | 0 | 0 |
Supplemental disclosure of non-cash investing activities | ||
Issuance of common stock for oil and gas lease- unproved | $ 11,432 | $ 0 |
NATURE OF BUSINESS AND SUMMARY
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A summary of significant accounting policies of Alpha Energy, Inc. (the Company) is presented to assist in understanding the Companys financial statements. The accounting policies presented in these footnotes conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the accompanying financial statements. These financial statements and notes are representations of the Companys management who are responsible for their integrity and objectivity. Organization, Nature of Business and Trade Name The Company was incorporated in the State of Colorado on September 26, 2013 for the purpose of acquiring and executing on oil and gas leases. The Company has not realized revenues from its planned business activities. Basis of Presentation and 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 at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Companys system of internal accounting control is designed to assure, among other items, that (1) recorded transactions are valid; (2) all valid transactions are recorded and (3) transactions are recorded in the period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the company for the respective periods being presented. Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all short-term debt securities purchased with maturity of three months or less to be cash equivalents. Revenue and Cost Recognition The Company has no operations outside of those organizational in nature to date. The Company has not yet recognized revenues from its planned business activities. Net Income (Loss) Per Share Basic net loss per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed using the weighted-average number of common shares outstanding and potentially dilutive common shares outstanding during the period that have a dilutive effect on net income per share. There were no potentially dilutive shares as of December 31, 2015 or 2014. Related Party Transactions The Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions. Share-Based Compensation ASC 718, Compensation Stock Compensation The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity Based Payments to Non-Employees. The Company had no stock-based compensation plans as of December 31, 2015 and 2014. The Companys stock based compensation for December 31, 2015 and 2014 was $0 and $12,000, respectively. Fair Value of Financial Instruments The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 Level 2 Level 3 The Companys valuation techniques used to measure the fair value of money market funds and certain marketable equity securities were derived from quoted prices in active markets for identical assets or liabilities. The valuation techniques used to measure the fair value of all other financial instruments, all of which have counterparties with high credit ratings, were valued based on quoted market prices or model driven valuations using significant inputs derived from or corroborated by observable market data. In accordance with the fair value accounting requirements, companies may choose to measure eligible financial instruments and certain other items at fair value. The Company has not elected the fair value option for any eligible financial instruments. Oil and natural gas properties We account for our oil and natural gas producing activities using the full cost method of accounting as prescribed by the United States Securities and Exchange Commission (SEC). Under this method, subject to a limitation based on estimated value, all costs incurred in the acquisition, exploration, and development of proved oil and natural gas properties, including internal costs directly associated with acquisition, exploration, and development activities, the costs of abandoned properties, dry holes, geophysical costs, and annual lease rentals are capitalized within a cost center. Costs of production and general and administrative corporate costs unrelated to acquisition, exploration, and development activities are expensed as incurred. Costs associated with unevaluated properties are capitalized as oil and natural gas properties but are excluded from the amortization base during the evaluation period. When we determine whether the property has proved recoverable reserves or not, or if there is an impairment, the costs are transferred into the amortization base and thereby become subject to amortization. We assess all items classified as unevaluated property on at least an annual basis for inclusion in the amortization base. We assess properties on an individual basis or as a group if properties are individually insignificant. The assessment includes consideration of the following factors, among others: intent to drill; remaining lease term; geological and geophysical evaluations; drilling results and activity; the assignment of proved reserves; and the economic viability of development if proved reserves are assigned. During any period in which these factors indicate that there would be impairment, or if proved reserves are assigned to a property, the cumulative costs incurred to date for such property are transferred to the amortizable base and are then subject to amortization. Capitalized costs included in the amortization base, including estimated asset retirement costs, plus the estimated future expenditures to be incurred in developing proved reserves, net of estimated salvage values. Sales or other dispositions of oil and natural gas properties are accounted for as adjustments to capitalized costs, with no gain or loss recorded unless the ratio of cost to proved reserves would significantly change. Impairment The net book value of all capitalized oil and natural gas properties within a cost center, less related deferred income taxes, is subject to a full cost ceiling limitation which is calculated quarterly. Under the ceiling limitation, costs may not exceed an aggregate of the present value of future net revenues attributable to proved oil and natural gas reserves discounted at 10 percent using current prices, plus the lower of cost or market value of unproved properties included in the amortization base, plus the cost of unevaluated properties, less any associated tax effects. Any excess of the net book value, less related deferred tax benefits, over the ceiling is written off as expense. Impairment expense recorded in one period may not be reversed in a subsequent period even though higher oil and gas prices may have increased the ceiling applicable to the subsequent period. At December 31, 2015 and 2014, it was not necessary to record an impairment charge. Asset retirement obligation We record the fair value of an asset retirement cost, and corresponding liability as part of the cost of the related long-lived asset and the cost is subsequently allocated to expense using a systematic and rational method. We record an asset retirement obligation to reflect our legal obligations related to future plugging and abandonment of our oil and natural gas wells and gathering systems. We estimate the expected cash flow associated with the obligation and discount the amount using a credit-adjusted, risk-free interest rate. At least annually, we reassess the obligation to determine whether a change in the estimated obligation is necessary. We evaluate whether there are indicators that suggest the estimated cash flows underlying the obligation have materially changed. Should those indicators suggest the estimated obligation may have materially changed on an interim basis (quarterly), we will update our assessment accordingly. Additional retirement obligations increase the liability associated with new oil and natural gas wells and gathering systems as these obligations are incurred. Capital Stock The Company has authorized sixty five million (65,000,000) shares of common stock with $0.0001 par value and ten million (10,000,000) shares of preferred stock with $0.0001 par value. There were 16,866,428 and 16,714,000 shares of common stock and no shares of preferred stock issued and outstanding at December 31, 2015 and 2014, respectively. Income Taxes Income taxes are provided in accordance with ASC Topic 740 Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment Recently Issued Accounting Pronouncements In June 2014, the FASB issued ASU 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. ASU 2014-10 eliminates the distinction of a development stage entity and certain related disclosure requirements, including the elimination of inception-to-date information on the statements of operations, cash flows and stockholders' equity. The amendments in ASU 2014-10 will be effective prospectively for annual reporting periods beginning after December 15, 2014, and interim periods within those annual periods, however early adoption is permitted. The Company evaluated and adopted ASU 2014-10 for the reporting period ended December 31, 2014. The Company does not expect the adoption of any other recently issued accounting pronouncements to have a material impact on their financial position, results of operations or cash flows. |
GOING CONCERN
GOING CONCERN | 12 Months Ended |
Dec. 31, 2015 | |
GOING CONCERN | |
GOING CONCERN | NOTE 2 GOING CONCERN The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company does not have significant cash or other current assets, nor does it have an established source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. These conditions raise substantial doubt about the companys ability to continue as a going concern Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading, or seeking protection from creditors pursuant to laws or regulations. Accordingly, assets and liabilities are recorded on the basis that the entity will be able to realize its assets and discharge its liabilities in the normal course of business. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the Business paragraph and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern. During the next year, the Companys foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing and making the requisite filings with the Securities and Exchange Commission, and the payment of expenses associated with research and development. The Company may experience a cash shortfall and be required to raise additional capital. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes: | |
Income Tax Disclosure | NOTE 3 INCOME TAXES The Company has losses carried forward for income tax purposes through December 31, 2015. There are no current or deferred tax expenses for the years ended December 31, 2015 and 2014 due to the Company's loss position. The Company has fully reserved for any benefits of these losses. The deferred tax consequences of temporary differences in reporting items for financial statement and income tax purposes are recognized, as appropriate. Realization of the future tax benefits related to the deferred tax assets is dependent on many factors, including the Company's ability to generate taxable income within the net operating loss carry-forward period. Management has considered these factors in reaching its conclusion as to the valuation allowance for financial reporting purposes. The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences for the periods presented are as follows: Income tax provision at the federal statutory rate 35.00% Income tax provision at the state statutory rate 4.63% Effect on operating loss carry forward (39.63%) - Changes in the net deferred tax assets consist of the following: 2015 2014 Net operating loss carry forward $ 43,745 $ 28,645 Valuation allowance (43,745) (28,645) Net deferred tax asset $ - $ - A reconciliation of income taxes computed at the statutory rate is as follows: 2015 2014 Tax at statutory rate (39.63%) $ 17,336 $ 11,352 Increase in valuation allowance (17,336) (11,352) Net deferred tax asset $ - $ - The net federal operating loss carry forward will expire in 2033. This carry forward may be limited upon the consummation of a business combination under IRC Section 381. |
STOCK
STOCK | 12 Months Ended |
Dec. 31, 2015 | |
Equity: | |
Stockholders' Equity Note Disclosure | NOTE 4 STOCK The Company is authorized to issue up to 10,000,000 shares of $0.0001 par value preferred stock and 65,000,000 shares of $0.0001 par value common stock. During the year ended December 31, 2014, the Company issued a total of 160,000 common shares in exchange for services valued at $12,000 and 240,000 common shares for net cash proceeds of $18,000. During the year ended December 31, 2015, the Company issued a total of 152,428 common shares in exchange for an oil and gas lease valued at $11,432. There were no shares of preferred stock issued or outstanding at December 31, 2015 or 2014. There were 16,866,428 and 16,714,000 shares of common stock issued and outstanding at December 31, 2015 and 2014, respectively. On April 10, 2015, the Company effected a 2:1 forward common stock split. There were 8,357,000 common shares issued and outstanding immediately prior to the forward split and 16,714,000 immediately after. These financial statements have been adjusted retroactively to present the effects of the split. |
RELATED PARTY TRANSATIONS
RELATED PARTY TRANSATIONS | 12 Months Ended |
Dec. 31, 2015 | |
RELATED PARTY TRANSATIONS: | |
RELATED PARTY TRANSATIONS | NOTE 5 - RELATED PARTY TRANSACTIONS The Company neither owns nor leases any real or personal property. The officers and directors for the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interest. The Company has not formulated a policy for the resolution of such conflicts. On October 1, 2013, the Company entered into an oil and gas lease agreement with a related party whereby it issued 40,000 common shares on a post-split basis (20,000 pre-split) valued at $8,000 for the purchase of the lease. The lease had an original term of three years and was set to expire on October 1, 2016. However, as discussed in Note 7, the lease was extended for an additional three years on April 20, 2016. The Company received advances from related parties totaling $500 during the year ended December 31, 2015. The advances from related parties are due on demand with no interest incurred. There was $775 and $275 due to related parties as of December 31, 2015 and 2014, respectively. |
STOCK WARRANTS
STOCK WARRANTS | 12 Months Ended |
Dec. 31, 2015 | |
Compensation Related Costs, Retirement Benefits: | |
Compensation and Employee Benefit Plans | NOTE 6 STOCK WARRANTS During the year ended December 31, 2014, the Company issued warrants in connection with common stock issued for cash. The following table summarizes all stock warrant activity for the year ended December 31, 2014 and December 31, 2015: Weighted-Average Exercise Price Shares Per Share Outstanding, December 31, 2013 260,000 $ 0.125 Granted 240,000 0.125 Exercised - - Forfeited - - Expired - - Outstanding, December 31, 2014 500,000 $ 0.125 Granted - - Exercised - - Forfeited - - Expired - - Outstanding, December 31, 2015 500,000 $ 0.125 The weighted average remaining contractual life of options outstanding as of December 31, 2015 and 2014, was approximately 1.05 and 2.05 years, respectively. The exercise price of these options was $0.125 and the intrinsic value of the options as of December 31, 2015 and 2014 is $0.00, respectively. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2015 | |
SUBSEQUENT EVENTS: | |
SUBSEQUENT EVENTS | NOTE 7 SUBSEQUENT EVENTS Subsequent to December 31, 2015, the Company received total advances from related parties of $6,100 to fund operations. The loans are non-interest bearing but interest will be paid contingent upon successful financing. On April 20, 2016, the Company entered into a lease extension agreement with a related party to extend the term of the lease for a period of three years for consideration of $10 cash. The original lease was entered into on October 1, 2013 and set to expire on October 1, 2016. The extension is under the same terms as the original lease agreement and will expire on October 1, 2019. On April 20, 2016, the Company entered into a lease extension agreement with an unrelated party to extend the term of the lease for a period of three years for consideration of $10 cash. The original lease was entered into on October 1, 2013 and was set to expire on October 1, 2016. The extension is under the same terms as the original lease agreement and will expire on October 1, 2019. |
NATURE OF BUSINESS AND SUMMAR14
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Organization, Nature of Business and Trade Name | Organization, Nature of Business and Trade Name The Company was incorporated in the State of Colorado on September 26, 2013 for the purpose of acquiring and executing on oil and gas leases. The Company has not realized revenues from its planned business activities. |
Basis of Presentation and Use of Estimates | Basis of Presentation and 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 at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Companys system of internal accounting control is designed to assure, among other items, that (1) recorded transactions are valid; (2) all valid transactions are recorded and (3) transactions are recorded in the period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the company for the respective periods being presented. |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all short-term debt securities purchased with maturity of three months or less to be cash equivalents. |
Revenue and Cost Recognition | Revenue and Cost Recognition The Company has no operations outside of those organizational in nature to date. The Company has not yet recognized revenues from its planned business activities. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic net loss per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed using the weighted-average number of common shares outstanding and potentially dilutive common shares outstanding during the period that have a dilutive effect on net income per share. There were no potentially dilutive shares as of December 31, 2015 or 2014. |
Related Party Transactions | Related Party Transactions The Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions. |
Share-Based Compensation | Share-Based Compensation ASC 718, Compensation Stock Compensation The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity Based Payments to Non-Employees. The Company had no stock-based compensation plans as of December 31, 2015 and 2014. The Companys stock based compensation for December 31, 2015 and 2014 was $0 and $12,000, respectively. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 Level 2 Level 3 The Companys valuation techniques used to measure the fair value of money market funds and certain marketable equity securities were derived from quoted prices in active markets for identical assets or liabilities. The valuation techniques used to measure the fair value of all other financial instruments, all of which have counterparties with high credit ratings, were valued based on quoted market prices or model driven valuations using significant inputs derived from or corroborated by observable market data. In accordance with the fair value accounting requirements, companies may choose to measure eligible financial instruments and certain other items at fair value. The Company has not elected the fair value option for any eligible financial instruments. |
Oil and natural gas properties | Oil and natural gas properties We account for our oil and natural gas producing activities using the full cost method of accounting as prescribed by the United States Securities and Exchange Commission (SEC). Under this method, subject to a limitation based on estimated value, all costs incurred in the acquisition, exploration, and development of proved oil and natural gas properties, including internal costs directly associated with acquisition, exploration, and development activities, the costs of abandoned properties, dry holes, geophysical costs, and annual lease rentals are capitalized within a cost center. Costs of production and general and administrative corporate costs unrelated to acquisition, exploration, and development activities are expensed as incurred. Costs associated with unevaluated properties are capitalized as oil and natural gas properties but are excluded from the amortization base during the evaluation period. When we determine whether the property has proved recoverable reserves or not, or if there is an impairment, the costs are transferred into the amortization base and thereby become subject to amortization. We assess all items classified as unevaluated property on at least an annual basis for inclusion in the amortization base. We assess properties on an individual basis or as a group if properties are individually insignificant. The assessment includes consideration of the following factors, among others: intent to drill; remaining lease term; geological and geophysical evaluations; drilling results and activity; the assignment of proved reserves; and the economic viability of development if proved reserves are assigned. During any period in which these factors indicate that there would be impairment, or if proved reserves are assigned to a property, the cumulative costs incurred to date for such property are transferred to the amortizable base and are then subject to amortization. Capitalized costs included in the amortization base, including estimated asset retirement costs, plus the estimated future expenditures to be incurred in developing proved reserves, net of estimated salvage values. Sales or other dispositions of oil and natural gas properties are accounted for as adjustments to capitalized costs, with no gain or loss recorded unless the ratio of cost to proved reserves would significantly change. |
Impairment | Impairment The net book value of all capitalized oil and natural gas properties within a cost center, less related deferred income taxes, is subject to a full cost ceiling limitation which is calculated quarterly. Under the ceiling limitation, costs may not exceed an aggregate of the present value of future net revenues attributable to proved oil and natural gas reserves discounted at 10 percent using current prices, plus the lower of cost or market value of unproved properties included in the amortization base, plus the cost of unevaluated properties, less any associated tax effects. Any excess of the net book value, less related deferred tax benefits, over the ceiling is written off as expense. Impairment expense recorded in one period may not be reversed in a subsequent period even though higher oil and gas prices may have increased the ceiling applicable to the subsequent period. At December 31, 2015 and 2014, it was not necessary to record an impairment charge. |
Asset retirement obligation | Asset retirement obligation We record the fair value of an asset retirement cost, and corresponding liability as part of the cost of the related long-lived asset and the cost is subsequently allocated to expense using a systematic and rational method. We record an asset retirement obligation to reflect our legal obligations related to future plugging and abandonment of our oil and natural gas wells and gathering systems. We estimate the expected cash flow associated with the obligation and discount the amount using a credit-adjusted, risk-free interest rate. At least annually, we reassess the obligation to determine whether a change in the estimated obligation is necessary. We evaluate whether there are indicators that suggest the estimated cash flows underlying the obligation have materially changed. Should those indicators suggest the estimated obligation may have materially changed on an interim basis (quarterly), we will update our assessment accordingly. Additional retirement obligations increase the liability associated with new oil and natural gas wells and gathering systems as these obligations are incurred. |
Capital Stock | Capital Stock The Company has authorized sixty five million (65,000,000) shares of common stock with $0.0001 par value and ten million (10,000,000) shares of preferred stock with $0.0001 par value. There were 16,866,428 and 16,714,000 shares of common stock and no shares of preferred stock issued and outstanding at December 31, 2015 and 2014, respectively. |
Income Taxes | Income Taxes Income taxes are provided in accordance with ASC Topic 740 Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In June 2014, the FASB issued ASU 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. ASU 2014-10 eliminates the distinction of a development stage entity and certain related disclosure requirements, including the elimination of inception-to-date information on the statements of operations, cash flows and stockholders' equity. The amendments in ASU 2014-10 will be effective prospectively for annual reporting periods beginning after December 15, 2014, and interim periods within those annual periods, however early adoption is permitted. The Company evaluated and adopted ASU 2014-10 for the reporting period ended December 31, 2014. The Company does not expect the adoption of any other recently issued accounting pronouncements to have a material impact on their financial position, results of operations or cash flows. |
Schedule of income taxes differ
Schedule of income taxes differs from the amount computed by applying the statutory federal income tax rate (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of income taxes differs from the amount computed by applying the statutory federal income tax rate | |
Schedule of income taxes differs from the amount computed by applying the statutory federal income tax rate | The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences for the periods presented are as follows: Income tax provision at the federal statutory rate 35.00% Income tax provision at the state statutory rate 4.63% Effect on operating loss carry forward (39.63%) - Changes in the net deferred tax assets consist of the following: 2015 2014 Net operating loss carry forward $ 43,745 $ 28,645 Valuation allowance (43,745) (28,645) Net deferred tax asset $ - $ - A reconciliation of income taxes computed at the statutory rate is as follows: 2015 2014 Tax at statutory rate (39.63%) $ 17,336 $ 11,352 Increase in valuation allowance (17,336) (11,352) Net deferred tax asset $ - $ - |
Schedule of Stock Warrants (Tab
Schedule of Stock Warrants (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of Stock Warrants | |
Schedule of summarizes all stock warrant activity | During the year ended December 31, 2014, the Company issued warrants in connection with common stock issued for cash. The following table summarizes all stock warrant activity for the year ended December 31, 2014 and December 31, 2015: Weighted-Average Exercise Price Shares Per Share Outstanding, December 31, 2013 260,000 $ 0.125 Granted 240,000 0.125 Exercised - - Forfeited - - Expired - - Outstanding, December 31, 2014 500,000 $ 0.125 Granted - - Exercised - - Forfeited - - Expired - - Outstanding, December 31, 2015 500,000 $ 0.125 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Share-Based Compensation Details | ||
Stock based compensation | $ 0 | $ 12,000 |
Capital Stock Details | ||
Authorized shares of common stock | 65,000,000 | 65,000,000 |
Shares of common stock par value | $ 0.0001 | $ 0.0001 |
Shares of preferred stock | 10,000,000 | 10,000,000 |
Shares of preferred stock par value | $ 0.0001 | $ 0.0001 |
Shares of preferred stock issued and outstanding | 16,866,428 | 16,714,000 |
THE PROVISION FOR INCOME TAXES
THE PROVISION FOR INCOME TAXES (DETAILS) | 12 Months Ended |
Dec. 31, 2015 | |
THE PROVISION FOR INCOME TAXES DETAILS | |
Income tax provision at the federal statutory rate | 35.00% |
Income tax provision at the state statutory rate | 4.63% |
Effect on operating loss carry forward | (39.63%) |
Total Provision for income taxes | 0.00% |
CHANGES IN THE NET DEFERRED TAX
CHANGES IN THE NET DEFERRED TAX ASSETS (DETAILS) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
CHANGES IN THE NET DEFERRED TAX ASSETS DETAILS | ||
Net operating loss carry forward | $ 43,745 | $ 28,645 |
Valuation allowance | (43,745) | $ (28,645) |
Net deferred tax asset | $ 0 |
A RECONCILIATION OF INCOME TAXE
A RECONCILIATION OF INCOME TAXES COMPUTED AT THE STATUTORY RATE (DETAILS) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
A RECONCILIATION OF INCOME TAXES COMPUTED AT THE STATUTORY RATE (DETAILS) | ||
Tax at statutory rate (39.63%) | $ 17,336 | $ 11,352 |
Increase in valuation allowance | (17,336) | $ (11,352) |
Net deferred tax asset | $ 0 |
STOCK (DETAILS)
STOCK (DETAILS) | 12 Months Ended | |
Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)shares | |
STOCK DETAILS | ||
Company is authorized to issue shares of preferred stock | 10,000,000 | |
Company is authorized to issue shares of preferred stock par value | $ / shares | $ 0.0001 | |
Company is authorized to issue shares of common stock | 65,000,000 | |
Company is authorized to issue shares of common stock par value | $ / shares | $ 0.0001 | |
Company issued a total of common shares in exchange for services | 160,000 | |
Issued a total of common shares in exchange for services valued | $ | $ 12,000 | |
240,000 Common shares for net cash proceeds | $ | $ 18,000 | |
Common shares for the acquisition of an oil and gas lease | 152,428 | |
Common shares for the acquisition of an oil and gas lease valued at | $ | $ 11,432 | |
Shares of common stock issued and outstanding | 16,866,428 | 16,714,000 |
Company effected a 2 forward common stock split for | 1 | |
Common shares issued and outstanding prior to forward split | 8,357,000 | |
Common shares issued and outstanding after to forward split | 16,714,000 |
RELATED PARTY TRANSACTIONS (DET
RELATED PARTY TRANSACTIONS (DETAILS) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
RELATED PARTY TRANSACTIONS DETAILS | |
Company received advances from related parties totaling | $ 500 |
DUE TO RELATED PARTIES (DETAILS
DUE TO RELATED PARTIES (DETAILS) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 | Oct. 01, 2013 |
DUE TO RELATED PARTIES DETAILS | |||
Oil and gas lease agreement with a related party issued common shares on a post-split basis | 40,000 | ||
Oil and gas lease agreement with a related party issued common shares on a pre-split basis | 20,000 | ||
Oil and gas lease agreement with a related party issued common shares value | $ 8,000 | ||
Due to related parties | $ 775 | $ 275 |
STOCK WARRANTS (DETAILS)
STOCK WARRANTS (DETAILS) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
STOCK WARRANTS DETAILS | |||
Shares Outstanding | 260,000 | 500,000 | 500,000 |
Shares Granted | 240,000 | ||
Weighted-Average Exercise Price Per Share Outstanding | $ 0.125 | $ 0.125 | $ 0.125 |
Weighted-Average Exercise Price Per Share Granted | $ 0.125 |
OUSTANDING AND EXERCISABLE OPTI
OUSTANDING AND EXERCISABLE OPTIONS (DETAILS) | Dec. 31, 2015USD ($)$ / shares | Dec. 31, 2014USD ($) |
OUSTANDING AND EXERCISABLE OPTIONS DETAILS | ||
Weighted average remaining contractual life of options outstanding in years | 1.05 | 2.05 |
Exercise price of these options | $ / shares | $ 0.125 | |
Intrinsic value of the options | $ | $ 0 | $ 0 |
SUBSEQUENT EVENTS (DETAILS)
SUBSEQUENT EVENTS (DETAILS) - USD ($) | Apr. 20, 2016 | Dec. 31, 2015 |
SUBSEQUENT EVENTS DETAILS | ||
Company received total advances from related parties to fund operations | $ 6,100 | |
Company entered into a lease extension agreement with a related party of three years for cash | $ 10 |