Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Jun. 30, 2013 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'ROYALE ENERGY INC | ' |
Document Type | '10-K | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Common Stock, Shares Outstanding | 14,942,728 | ' |
Entity Public Float | ' | $27,346,141 |
Amendment Flag | 'false | ' |
Entity Central Index Key | '0000864839 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Voluntary Filers | 'No | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Document Period End Date | 31-Dec-13 | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'FY | ' |
BALANCE_SHEETS
BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Current Assets | ' | ' |
Cash and Cash Equivalents | $4,878,233 | $1,489,930 |
Accounts Receivable, net | 1,680,792 | 3,969,160 |
Prepaid Expenses | 684,848 | 469,038 |
Available for Sale Securities | 16,448 | 0 |
Inventory | 317,043 | 612,464 |
Total Current Assets | 7,577,364 | 6,540,592 |
Other Assets | 946 | 6,946 |
Oil And Gas Properties (Successful Efforts Basis), Real Property and Equipment and Fixtures | 7,237,382 | 6,522,186 |
Total Assets | 14,815,692 | 13,069,724 |
Current Liabilities: | ' | ' |
Accounts Payable and Accrued Expenses | 5,332,323 | 4,932,468 |
Current Portion of Long-Term Debt, Net | 22,916 | 2,258,668 |
Current Portion of Deferred Tax Liability | 1,775 | 1,775 |
Deferred Drilling Obligations | 6,125,933 | 8,693,743 |
Total Current Liabilities | 11,482,947 | 15,886,654 |
Noncurrent Liabilities: | ' | ' |
Asset Retirement Obligation | 862,369 | 954,088 |
Note Payable | 1,477,084 | 0 |
Total Noncurrent Liabilities | 2,339,453 | 954,088 |
Total Liabilities | 13,822,400 | 16,840,742 |
Stockholders' Equity | ' | ' |
Common Stock, No Par Value, 20,000,000 Shares Authorized; 14,942,728 and 12,545,465 Shares Issued and Outstanding, Respectively | 37,996,866 | 33,247,571 |
Convertible Preferred Stock, Series AA, No Par Value, 147,500 Shares Authorized; 52,784 Shares Issued and Outstanding, Respectively | 154,014 | 154,014 |
Accumulated (Deficit) | -37,471,388 | -38,620,541 |
Paid in Capital | 303,855 | 1,447,938 |
Accumulated Other Comprehensive Income | 9,945 | 0 |
Total Stockholders' Equity (Deficit) | 993,292 | -3,771,018 |
Total Liabilities and Stockholders' Equity (Deficit) | $14,815,692 | $13,069,724 |
BALANCE_SHEETS_Parentheticals
BALANCE SHEETS (Parentheticals) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Common stock, no par value (in Dollars per share) | ' | ' |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 14,942,728 | 12,545,465 |
Common Stock, shares outstanding | 14,942,728 | 12,545,465 |
Convertible Preferred Stock, Series AA, no par value (in Dollars per share) | ' | ' |
Convertible Preferred Stock, Series AA, shares authorized | 147,500 | 147,500 |
Convertible Preferred Stock, Series AA, shares issued | 52,784 | 52,784 |
Convertible preferred stock, Series AA, shares outstanding | 52,784 | 52,784 |
STATEMENTS_OF_OPERATIONS
STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Revenues: | ' | ' |
Sale of Oil and Gas | $1,913,364 | $1,673,538 |
Supervisory Fees and Other | 659,697 | 692,344 |
Total Revenues | 2,573,061 | 2,365,882 |
Costs and Expenses: | ' | ' |
General and Administrative | 3,279,505 | 3,640,336 |
Lease Operating | 936,631 | 1,090,948 |
Delay Rentals | 457,554 | 48,802 |
Lease Impairment | 70,203 | 145,461 |
Geological and Geophysical | 50,145 | 423,459 |
Inventory Write Down | 39,185 | 62,744 |
Bad Debt Expense | 146,704 | 263,767 |
Legal and Accounting | 326,270 | 518,511 |
Marketing | 332,482 | 594,118 |
Depreciation, Depletion and Amortization | 309,806 | 664,131 |
Total Costs and Expenses | 5,948,485 | 7,452,277 |
Gain on Turnkey Drilling Programs | 2,008,734 | 763,461 |
Gain on Sale of Assets | 2,820,315 | 8,100 |
Income (Loss) from Operations | 1,453,625 | -4,314,834 |
Other Income (Expense): | ' | ' |
Interest Expense | -304,472 | -195,009 |
Gain on sale of Marketable Securities | 0 | 7,048 |
Income Before Income Tax Expense | 1,149,153 | -4,502,795 |
Income Tax Provision (Benefit) | 0 | -9,187,821 |
Net Income (Loss) | 1,149,153 | -13,690,616 |
Basic Earnings (Loss) Per Share: (in Dollars per share) | $0.08 | ($1.23) |
Diluted Earnings (Loss) Per Share (in Dollars per share) | $0.08 | ($1.23) |
Other Comprehensive Income (Loss) | ' | ' |
Unrealized Gain on Equity Securities | 9,945 | 0 |
Less: Reclassification Adjustment for Gains Included in Net Income | 0 | -3,035 |
Other Comprehensive Income (Loss) , before tax | 9,945 | -3,035 |
Other Comprehensive Income (Loss), net of tax | 9,945 | -3,035 |
Comprehensive Income (Loss) | $1,159,098 | ($13,693,651) |
STATEMENTS_OF_STOCKHOLDERS_EQU
STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Common Stock [Member] | Series A Preferred Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Balance at Dec. 31, 2010 | $28,298,228 | $154,014 | ($179,376) | $632,004 | ($22,225,904) | $3,035 | $6,682,001 |
Balance (in Shares) at Dec. 31, 2010 | 10,823,050 | 52,784 | 32,619 | ' | ' | ' | ' |
Prior Period adjustment | ' | ' | ' | ' | -2,704,021 | ' | -2,704,021 |
Balance at Dec. 31, 2011 | 28,298,228 | 154,014 | -179,376 | 632,004 | -22,225,904 | 3,035 | 3,977,980 |
Balance (in Shares) at Dec. 31, 2011 | 10,823,050 | 52,784 | 32,619 | ' | ' | ' | ' |
Common Stock Options Exercised | 299,500 | ' | ' | ' | ' | ' | 299,500 |
Common Stock Options Exercised (in Shares) | 165,038 | ' | ' | ' | ' | ' | ' |
Common Stock Private Placement | 4,649,843 | ' | 146,515 | -174,451 | ' | ' | 4,621,907 |
Common Stock Private Placement (in Shares) | 1,562,352 | ' | -26,644 | ' | ' | ' | ' |
Directors’ Stock Option Grant | ' | ' | ' | 39,260 | ' | ' | 39,260 |
Treasury Stock Retirement | ' | ' | 27,361 | -173,876 | ' | ' | -146,515 |
Treasury Stock Retirement (in Shares) | -4,975 | ' | -4,975 | ' | ' | ' | ' |
Common Stock Donation | ' | ' | 5,500 | -2,110 | ' | ' | 3,390 |
Common Stock Donation (in Shares) | ' | ' | -1,000 | ' | ' | ' | ' |
Discount on Warrant Value | ' | ' | ' | 1,127,111 | ' | ' | 1,127,111 |
Available for Sale Securities – Unrealized Gain (Loss), net of tax | ' | ' | ' | ' | ' | -3,035 | -3,035 |
Net Income (Loss) | ' | ' | ' | ' | -13,690,615 | ' | -13,690,616 |
Balance at Dec. 31, 2012 | 33,247,571 | 154,014 | 0 | 0 | 1,447,938 | 0 | -3,771,018 |
Balance (in Shares) at Dec. 31, 2012 | 12,545,465 | 52,784 | ' | ' | ' | ' | ' |
Common Stock Warrant Exercise | 1,227,626 | ' | ' | ' | ' | ' | 1,227,626 |
Common Stock Warrant Exercise (in Shares) | 630,619 | ' | ' | ' | ' | ' | ' |
Common Stock Private Placement | 1,021,667 | ' | ' | ' | ' | ' | 1,021,668 |
Common Stock Private Placement (in Shares) | 500,000 | ' | ' | ' | ' | ' | ' |
Note Payable Conversion | 2,500,000 | ' | ' | -1,144,083 | ' | ' | 1,355,917 |
Note Payable Conversion (in Shares) | 1,266,644 | ' | ' | ' | ' | ' | ' |
Available for Sale Securities – Unrealized Gain (Loss), net of tax | ' | ' | ' | ' | ' | 9,945 | 9,945 |
Net Income (Loss) | ' | ' | ' | ' | 1,149,153 | ' | 1,149,153 |
Balance at Dec. 31, 2013 | $37,996,866 | $154,014 | $0 | $303,855 | ($37,471,387) | $9,945 | $993,292 |
Balance (in Shares) at Dec. 31, 2013 | 14,942,728 | 52,784 | 0 | ' | ' | ' | ' |
STATEMENTS_OF_CASH_FLOWS
STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net Income (Loss) | $1,149,153 | ($13,690,616) |
Adjustments to Reconcile Net Income (Loss) to Net Cash Used by Operating Activities: | ' | ' |
Depreciation, Depletion, and Amortization | 309,806 | 664,131 |
Lease Impairment | 70,203 | 145,461 |
Gain on Sale of Assets | -2,820,315 | -8,100 |
Gain on Turnkey Drilling Programs | -2,008,734 | -763,461 |
Realized (Gain on Sale of Available for Sale Securities | 0 | -7,048 |
Bad Debt Expense | 146,704 | 263,767 |
Stock-Based Compensation | 0 | 39,260 |
Debt Discount Amortization | 280,582 | 100,779 |
Inventory and Other Assets Write Down | 39,185 | 62,744 |
Treasury Stock Donation | 0 | 3,390 |
(Increase) Decrease in: | ' | ' |
Accounts Receivable | 2,141,664 | 145,333 |
Prepaid Expenses and Other Assets | 40,426 | -47,620 |
Increase (Decrease) in: | ' | ' |
Accounts Payable and Accrued Expenses | 308,136 | 768,203 |
Deferred –Drilling Obligations | -2,567,810 | 1,784,077 |
Deferred Income Taxes | 0 | 9,186,566 |
Net Cash Used by Operating Activities | -2,911,000 | -1,353,134 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Expenditures For Oil And Gas Properties and Other Capital Expenditures | -6,998,949 | -4,425,434 |
Proceeds from Turnkey Drilling Programs | 8,025,535 | 1,468,403 |
Proceeds from Sale of Assets | 4,206,755 | 14,690 |
Sale of Available for Sale Securities | 0 | 35,575 |
Net Cash Provided (Used) in Investing Activities | 5,233,341 | -2,906,766 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Proceeds from Long-Term Debt | 0 | 2,784,689 |
Principal Payments on Long-Term Debt | -1,183,333 | -2,400,000 |
Proceeds from Stock Options and Warrant Exercises | 1,227,627 | 299,500 |
Proceeds from Sale of Common Stock | 1,021,668 | 2,119,510 |
Net Cash Provided by Financing Activities | 1,065,962 | 2,803,699 |
Net Increase (Decrease) in Cash and Cash Equivalents | 3,388,303 | -1,456,201 |
Cash & Cash Equivalents at Beginning of Year | 1,489,930 | 2,946,131 |
Cash & Cash Equivalents at End of Year | 4,878,233 | 1,489,930 |
Cash Paid for Interest | 23,890 | 94,229 |
Cash Paid for Taxes | 925 | 800 |
Supplemental Schedule of Non-Cash Investing and Financing Transactions: | ' | ' |
Purchase of Office building with note payable financing | 1,500,000 | 0 |
Conversion of convertible notes to common stock | 2,500,000 | ' |
Accretion of discount to paid-in-capital upon early conversion of convertible notes | 1,144,083 | ' |
Receivable from sale of common stock | 0 | 2,506,023 |
Unrealized Gain on Available-for-Sale Securities, net of tax effect | $9,945 | $0 |
NOTE_1_SUMMARY_OF_SIGNIFICANT_
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||||||||
Dec. 31, 2013 | |||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||
Significant Accounting Policies [Text Block] | ' | ||||||||||||||
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||
This summary of significant accounting policies of Royale Energy, Inc. (“Royale Energy” or the “Company”) is presented to assist in understanding Royale Energy's financial statements. The financial statements and notes are representations of Royale Energy's management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements. | |||||||||||||||
Description of Business | |||||||||||||||
Royale Energy is an independent oil and gas producer which also has operations in the area of turnkey drilling. Royale Energy owns wells and leases in major geological basins located primarily in California, Texas, and Utah. Royale Energy offers fractional working interests and seeks to minimize the risks of oil and gas drilling by selling multiple well drilling projects which do not include the use of debt financing. | |||||||||||||||
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 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. | |||||||||||||||
Material estimates that are particularly susceptible to significant change relate to the estimate of Company oil and gas reserves prepared by an independent engineering consultant. Such estimates are subject to numerous uncertainties inherent in the estimation of quantities of proven reserves. Estimated reserves are used in the calculation of depletion, depreciation and amortization, unevaluated property costs, impairment of oil and natural gas properties, estimated future net cash flows, taxes, and contingencies. | |||||||||||||||
Revenue Recognition | |||||||||||||||
Royale’s primary business is oil and gas production. Natural gas flows from the wells into gathering line systems, which are equipped occasionally with compressor systems, which in turn flow into metered transportation and customer pipelines. Monthly, price data and daily production are used to invoice customers for amounts due to Royale Energy and other working interest owners. Royale Energy operates virtually all of its own wells and receives industry standard operator fees. | |||||||||||||||
Royale Energy generally sells crude oil and natural gas under short-term agreements at prevailing market prices. Revenues are recognized when the products are delivered, which occurs when the customer has taken title and has assumed the risks and rewards of ownership, prices are fixed or determinable and collectability is reasonably assured. | |||||||||||||||
Revenues from the production of oil and natural gas properties in which the Royale Energy has an interest with other producers are recognized on the basis of Royale Energy’s net working interest. Differences between actual production and net working interest volumes are not significant. | |||||||||||||||
Royale Energy’s financial statements include its pro rata ownership of wells. Royale Energy usually sells a portion of the working interest in each well it drills or participates in to third party investors and retains a portion of the prospect for its own account. Royale Energy generally retains about a 50% working interest. All results, successful or not, are included at its pro rata ownership amounts: revenue, expenses, assets, and liabilities as defined in FASB ASC 932-323-25 and 932-360. | |||||||||||||||
Oil and Gas Property and Equipment | |||||||||||||||
Depreciation, depletion and amortization, based on cost less estimated salvage value of the asset, are primarily determined under either the unit-of-production method or the straight-line method, which is based on estimated asset service life taking obsolescence into consideration. Maintenance and repairs, including planned major maintenance, are expensed as incurred. Major renewals and improvements are capitalized and the assets replaced are retired. | |||||||||||||||
The project construction phase commences with the development of the detailed engineering design and ends when the constructed assets are ready for their intended use. Interest costs, to the extent they are incurred to finance expenditures during the construction phase, are included in property, plant and equipment and are depreciated over the service life of the related assets. | |||||||||||||||
Royale Energy uses the “successful efforts” method to account for its exploration and production activities. Under this method, Royale Energy accumulates its proportionate share of costs on a well-by-well basis with certain exploratory expenditures and exploratory dry holes being expensed as incurred, and capitalizes expenditures for productive wells. Royale Energy amortizes the costs of productive wells under the unit-of-production method. | |||||||||||||||
Royale Energy carries, as an asset, exploratory well costs when the well has found a sufficient quantity of reserves to justify its completion as a producing well and where Royale Energy is making sufficient progress assessing the reserves and the economic and operating viability of the project. Exploratory well costs not meeting these criteria are charged to expense. Other exploratory expenditures, including geophysical costs and annual lease rentals, are expensed as incurred. | |||||||||||||||
Acquisition costs of proved properties are amortized using a unit-of-production method, computed on the basis of total proved oil and gas reserves. | |||||||||||||||
Capitalized exploratory drilling and development costs associated with productive depletable extractive properties are amortized using unit-of-production rates based on the amount of proved developed reserves of oil and gas that are estimated to be recoverable from existing facilities using current operating methods. | |||||||||||||||
Under the unit-of-production method, oil and gas volumes are considered produced once they have been measured through meters at custody transfer or sales transaction points at the outlet valve on the lease or field storage tank. | |||||||||||||||
Production costs are expensed as incurred. Production involves lifting the oil and gas to the surface and gathering, treating, field processing and field storage of the oil and gas. The production function normally terminates at the outlet valve on the lease or field production storage tank. Production costs are those incurred to operate and maintain Royale Energy’s wells and related equipment and facilities. They become part of the cost of oil and gas produced. These costs, sometimes referred to as lifting costs, include such items as labor costs to operate the wells and related equipment; repair and maintenance costs on the wells and equipment; materials, supplies and energy costs required to operate the wells and related equipment; and administrative expenses related to the production activity. | |||||||||||||||
Proved oil and gas properties held and used by Royale Energy are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. | |||||||||||||||
Royale Energy estimates the future undiscounted cash flows of the affected properties to judge the recoverability of carrying amounts. Cash flows used in impairment evaluations are developed using annually updated evaluation assumptions for crude oil commodity prices. Annual volumes are based on field production profiles, which are also updated annually. Prices for natural gas and other products are based on assumptions developed annually for evaluation purposes. | |||||||||||||||
Impairment analyses are generally based on proved reserves. An asset group would be impaired if the undiscounted cash flows were less than its carrying value. Impairments are measured by the amount the carrying value exceeds fair value. During 2013 and 2012, impairment losses of $70,203 and $145,461, respectively, were recorded on various capitalized lease and land costs that were no longer viable. | |||||||||||||||
Significant unproved properties are assessed for impairment individually, and valuation allowances against the capitalized costs are recorded based on the estimated economic chance of success and the length of time that Royale Energy expects to hold the properties. The valuation allowances are reviewed at least annually. | |||||||||||||||
Upon the sale or retirement of a complete field of a proved property, Royale Energy eliminates the cost from its books, and the resultant gain or loss is recorded to Royale Energy’s Statement of Operations. Upon the sale of an entire interest in an unproved property where the property has been assessed for impairment individually, a gain or loss is recognized in Royale Energy’s Statement of Operations. If a partial interest in an unproved property is sold, any funds received are accounted for as a recovery of the cost in the interest retained with any excess funds recognized as a gain. Should Royale Energy’s turnkey drilling agreements include unproved property, total drilling costs incurred to satisfy its obligations are recovered by the total funds received under the agreements. Any excess funds are recorded as a Gain on Turnkey Drilling Programs, and any costs not recovered are capitalized and accounted for under the “successful efforts” method. | |||||||||||||||
Royale Energy sponsors turnkey drilling agreement arrangements in unproved properties as a pooling of assets in a joint undertaking, whereby proceeds from participants are reported as Deferred Drilling Obligations, and then reduced as costs to complete its obligations are incurred with any excess booked against its property account to reduce any basis in its own interest. Gains on Turnkey Drilling Programs represent funds received from turnkey drilling participants in excess of all costs Royale incurs during the drilling programs (e.g., lease acquisition, exploration and development costs), including costs incurred on behalf of participants and costs incurred for its own account; and are recognized only upon making this determination after Royale’s obligations have been fulfilled. | |||||||||||||||
The contracts require the participants pay Royale Energy the full contract price upon execution of the agreement. Royale Energy completes the drilling activities typically between 10 and 30 days after drilling begins. The participant retains an undivided or proportional beneficial interest in the property, and is also responsible for its proportionate share of operating costs. Royale Energy retains legal title to the lease. The participants purchase a working interest directly in the well bore. | |||||||||||||||
In these working interest arrangements, the participants are responsible for sharing in the risk of development, but also sharing in a proportional interest in rights to revenues and proportional liability for the cost of operations after drilling is completed and the interest is conveyed to the participant. | |||||||||||||||
A certain portion of the turnkey drilling participant’s funds received are non-refundable. The company holds all funds invested as Deferred Drilling Obligations until drilling is complete. Occasionally, drilling is delayed due to the permitting process or drilling rig availability. At December 31, 2013 and 2012, Royale Energy had Deferred Drilling Obligations of $6,125,933 and $8,693,743 respectively. | |||||||||||||||
If Royale Energy is unable to drill the wells, and a suitable replacement well is not found, Royale would retain the non-refundable portion of the contact and return the remaining funds to the participant. Included in cash and cash equivalents are amounts for use in completion of turnkey drilling programs in progress. | |||||||||||||||
Losses on properties sold are recognized when incurred or when the properties are held for sale and the fair value of the properties is less than the carrying value. | |||||||||||||||
Cash and Cash Equivalents | |||||||||||||||
Cash and cash equivalents include cash on hand and on deposit, and highly liquid debt instruments with maturities of three months or less. | |||||||||||||||
Inventory | |||||||||||||||
Inventory consists of well supplies, pipeline and spare parts and is carried at lower of cost or market. During 2013, we had a write down of $39,185 on certain oil and gas inventory and in 2012 we had a write down of $62,744 on certain oil and gas inventory to its estimated current market value. | |||||||||||||||
Accounts Receivable | |||||||||||||||
The Company provides for uncollectible accounts receivable using the allowance method of accounting for bad debts. Under this method of accounting, a provision for uncollectible accounts is charged to earnings. The allowance account is increased or decreased based on past collection history and management’s evaluation of accounts receivable. All amounts considered uncollectible are charged against the allowance account and recoveries of previously charged off accounts are added to the allowance. At December 31, 2013 and 2012, the Company established an allowance for uncollectable accounts of $1,081,580 and $934,876, respectively, for receivables from direct working interest investors whose expenses on non-producing wells were unlikely to be collected from revenue. | |||||||||||||||
Equipment and Fixtures | |||||||||||||||
Equipment and fixtures are stated at cost and depreciated over the estimated useful lives of the assets, which range from three to seven years, using the straight-line method. Repairs and maintenance are charged to expense as incurred. When assets are sold or retired, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in income. Maintenance and repairs, which neither materially add to the value of the property nor appreciably prolong its life, are charged to expense as incurred. Gains or losses on dispositions of property and equipment, other than oil and gas, are reflected in operations. | |||||||||||||||
Income (Loss) Per Share | |||||||||||||||
Basic and diluted income (losses) per share are calculated as follows: | |||||||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||
Income | Shares | Per-Share | |||||||||||||
(Numerator) | (Denominator) | Amount | |||||||||||||
Basic Income Per Share: | |||||||||||||||
Net income available to common stock | $ | 1,149,153 | 13,853,290 | $ | 0.08 | ||||||||||
Diluted Income Per Share: | |||||||||||||||
Effect of dilutive securities and stock options | 435,195 | $ | 0.00 | ||||||||||||
Net income available to common stock | $ | 1,149,153 | 14,288,485 | $ | 0.08 | ||||||||||
For the Year Ended December 31, 2012 | |||||||||||||||
Income | Shares | Per-Share | |||||||||||||
(Numerator) | (Denominator) | Amount | |||||||||||||
Basic Loss Per Share: | |||||||||||||||
Net loss available to common stock | $ | (13,690,616 | ) | 11,133,377 | $ | (1.23 | ) | ||||||||
Loss Per Share: | |||||||||||||||
Effect of dilutive securities and stock options | - | - | - | ||||||||||||
Net loss available to common stock | $ | (13,690,616 | ) | 11,133,377 | $ | (1.23 | ) | ||||||||
For the year ended December 31, 2012, Royale Energy had dilutive securities of 1,104,314. These securities were not included in the dilutive earnings per share due to their anti-dilutive nature. | |||||||||||||||
Stock Based Compensation | |||||||||||||||
Royale Energy has a stock-based employee compensation plan, which is more fully described in Note 12. Effective January 1, 2006, the Company adopted the Compensation – Stock Compensation Topic of the FASB Accounting Standards Codification, which addresses the accounting for stock-based payment transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments. The Company uses the Black-Scholes option-pricing model to determine the fair value of stock-based awards. | |||||||||||||||
Income Taxes | |||||||||||||||
Royale utilizes the asset and liability approach to measure deferred tax assets and liabilities based on temporary differences existing at each balance sheet date using currently enacted tax rates in accordance with the Income Taxes Topic of the FASB Accounting Standards Codification. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Under the Topic, deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. | |||||||||||||||
The provision for income taxes is based on pretax financial accounting income. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax basis of assets and liabilities and their reported net amounts. | |||||||||||||||
Fair Value Measurements | |||||||||||||||
According to Fair Value Measurements and Disclosures Topic of the FASB Accounting Standards Codification, assets and liabilities that are measured at fair value on a recurring and nonrecurring basis in period subsequent to initial recognition, the reporting entity shall disclose information that enable users of its financial statements to assess the inputs used to develop those measurements and for recurring fair value measurements using significant unobservable inputs, the effect of the measurements on earnings for the period. | |||||||||||||||
At December 31, 2013, Royale Energy reported the fair value of $16,448 in available for sale securities. The fair value was determined using the number of shares owned as of December 31, 2013, multiplied by the market price of those securities on December 31, 2013. | |||||||||||||||
The table below summarizes Royale’s fair value measurements and the level within the fair value hierarchy in which the fair value measurements fall. At December 31, 2012, Royale Energy quoted prices in active markets for identical assets when determining the fair value measurements at the reporting date. | |||||||||||||||
Description | 12/31/13 | Level 1 | 12/31/12 | Level 1 | |||||||||||
Available for Sale Securities | $ | 16,448 | $ | 16,448 | $ | - | $ | - | |||||||
Reclassifications | |||||||||||||||
Certain items in the financial statements have been reclassified to maintain consistency and comparability for all | |||||||||||||||
periods presented herein. The company has determined that Delay Rentals expenses are more fairly broken out of Lease Operating Expenses. The reclassification is reflected in all years presented. | |||||||||||||||
Recently Issued Accounting Pronouncements | |||||||||||||||
The Company has reviewed the updates issued by the Financial Accounting Standards Board (FASB) during the year ended December 31, 2013, and have determined that the updates are not applicable to the Company. | |||||||||||||||
NOTE_2_OIL_AND_GAS_PROPERTIES_
NOTE 2 - OIL AND GAS PROPERTIES, EQUIPMENT AND FIXTURES | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | ' | ||||||||
Oil and Gas Exploration and Production Industries Disclosures [Text Block] | ' | ||||||||
NOTE 2 - OIL AND GAS PROPERTIES, EQUIPMENT AND FIXTURES | |||||||||
Oil and gas properties, equipment and fixtures consist of the following at December 31: | |||||||||
2013 | 2012 | ||||||||
Oil and Gas | |||||||||
Producing properties, including intangible drilling costs | $ | 4,862,657 | $ | 5,025,723 | |||||
Undeveloped properties | 2,779,672 | 4,034,292 | |||||||
Lease and well equipment | 4,075,320 | 4,000,524 | |||||||
11,717,649 | 13,060,539 | ||||||||
Accumulated depletion, depreciation and amortization | (7,065,362 | ) | (7,163,943 | ) | |||||
4,652,287 | $ | 5,896,596 | |||||||
2013 | 2012 | ||||||||
Commercial and Other | |||||||||
Real estate, including furniture and fixtures | $ | 2,503,803 | $ | 502,344 | |||||
Vehicles | 120,314 | 151,669 | |||||||
Furniture and equipment | 1,300,523 | 1,299,300 | |||||||
3,924,640 | 1,953,313 | ||||||||
Accumulated depreciation | (1,339,545 | ) | (1,327,723 | ) | |||||
2,585,095 | 625,590 | ||||||||
$ | 7,237,382 | 6,522,186 | |||||||
The following sets forth costs incurred for oil and gas property acquisition and development activities, whether capitalized or expensed: | |||||||||
2013 | 2012 | ||||||||
Acquisition - Proved | $ | 7,663 | 24,298 | ||||||
Acquisition- Unproved | $ | 0 | 24,606 | ||||||
Development | $ | 1,080,043 | 577,708 | ||||||
Exploration | $ | 4,822,260 | 1,077,001 | ||||||
The guidance set forth in the Continued Capitalization of Exploratory Well Costs paragraph of the Extractive Activities Topic of the FASB Accounting Standards Codification requires that we evaluate all existing capitalized exploratory well costs and disclose the extent to which any such capitalized costs have become impaired and are expensed or reclassified during a fiscal period. We did not make any additions to capitalized exploratory well costs pending a determination of proved reserves during 2013 or 2012. We did not charge any previously capitalized exploratory well costs to expense upon adoption of Topic. | |||||||||
12 Months Ended December 31, | |||||||||
2013 | 2012 | ||||||||
Beginning balance at January 1 | $ | 0 | $ | 0 | |||||
Additions to capitalized exploratory well costs pending the determination of proved reserves | $ | 410,303 | $ | 0 | |||||
Reclassifications to wells, facilities, and equipment based on the determination of proved reserves | $ | (410,303 | ) | $ | 0 | ||||
Ending balance at December 31 | $ | 0 | $ | 0 | |||||
Results of Operations from Oil and Gas Producing and Exploration Activities | |||||||||
The results of operations from oil and gas producing and exploration activities (excluding corporate overhead and interest costs) for the two years ended December 31, are as follows: | |||||||||
2013 | 2012 | ||||||||
Oil and gas sales | $ | 1,913,364 | 1,673,538 | ||||||
Production related costs | (1,394,185 | ) | (1,139,750 | ) | |||||
Lease Impairment | (70,203 | ) | (145,461 | ) | |||||
Depreciation, depletion and amortization | (309,806 | ) | (664,131 | ) | |||||
Results of operations from producing and | $ | 139,170 | (275,804 | ) | |||||
exploration activities | |||||||||
Income Taxes (Benefit) | 0 | (9,187,821 | ) | ||||||
Net Results | $ | 139,170 | (9,463,625 | ) | |||||
NOTE_3_ASSET_RETIREMENT_OBLIGA
NOTE 3 - ASSET RETIREMENT OBLIGATION | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Asset Retirement Obligation Disclosure [Abstract] | ' | ||||||||
Asset Retirement Obligation Disclosure [Text Block] | ' | ||||||||
NOTE 3 – ASSET RETIREMENT OBLIGATION | |||||||||
The Asset Retirement and Environmental Obligations Topic of the FASB Accounting Standards Codification requires that an asset retirement obligation (ARO) associated with the retirement of a tangible long-lived asset be recognized as a liability in the period in which it is incurred or becomes determinable (as defined by the standard), with an associated increase in the carrying amount of the related long-lived asset. The cost of the tangible asset, including the initially recognized asset retirement cost, is depreciated over the useful life of the asset. The ARO is recorded at fair value, and accretion expense will be recognized over time as the discounted liability is accreted to its expected settlement value. The fair value of the ARO is measured using expected future cash outflows discounted at the Company’s credit-adjusted risk-free interest rate. The provisions of this Topic apply to legal obligations associated with the retirement of long-lived assets that result from the acquisition, development, and operation of a long-lived asset. | |||||||||
2013 | 2012 | ||||||||
Asset retirement obligation Beginning of the year | $ | 954,088 | $ | 575,612 | |||||
Liabilities incurred during the period | 12,358 | 347,947 | |||||||
Settlements | (97,522 | ) | 0 | ||||||
Accretion expense | 17,106 | 6,741 | |||||||
Revisions in estimated cash flow | 23,661 | 23,788 | |||||||
Asset retirement obligation End of year | $ | 862,369 | $ | 954,088 | |||||
NOTE_4_TURNKEY_DRILLING_CONTRA
NOTE 4 - TURNKEY DRILLING CONTRACTS | 12 Months Ended |
Dec. 31, 2013 | |
Deferred Revenue Disclosure [Abstract] | ' |
Deferred Revenue Disclosure [Text Block] | ' |
NOTE 4 - TURNKEY DRILLING OBLIGATION | |
Royale Energy receives funds under turnkey drilling contracts, which require Royale Energy to drill oil and gas wells within a reasonable time period from the date of receipt of the funds. As of December 31, 2013 and 2012 Royale Energy had recorded deferred turnkey drilling associated with undrilled wells of $6,125,933 and $8,693,743, respectively, as a current liability. | |
NOTE_5_LONGTERM_DEBT
NOTE 5 - LONG-TERM DEBT | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Disclosure Text Block [Abstract] | ' | ||||||||
Long-term Debt [Text Block] | ' | ||||||||
NOTE 5 - LONG-TERM DEBT | |||||||||
2013 | 2012 | ||||||||
Revolving line of credit secured by oil and gas properties, with a maximum available of $14,250,000 at December 31, 2012, issued by Texas Capital Bank, N.A. for the purposes of refinancing Royale’s existing debt and to fund development, exploration and acquisition activities as well as other general corporate purposes. The agreement was entered into on February 13, 2009. Interest is at Texas Capital Bank’s “Base Rate” plus 1.00% with an “Adjusted Base Rate” of 5.00%, resulting in a rate of 5.00% at December 31, 2013 and 2012, payable monthly with borrowing base reductions of $100,000 commencing on January 1, 2012. As part of this agreement, Texas Capital Bank has issued letters of credit in the amount of $750,000 on behalf of the Company to various agencies. At December 31, 2012, Royale’s borrowing base with Texas Capital Bank was $350,000. The revolving line of credit matured in February 2013. | $ | 0 | $ | 350,000 | |||||
On December 24, 2013, Royale Energy, Inc. entered into an agreement between the Company, as buyer, and North Island Financial Credit Union as seller, for the purchase of commercial property in San Diego, California, for a purchase price of $2,000,000, of which $500,000 was paid in cash on the date of purchase, and $1,500,000 was borrowed from AmericanWest Bank, NA, with a note secured by the property being purchased. The note carries an interest rate of 5.75% until paid in full. Royale will pay this loan in 119 regular payments of $9,525 each and one balloon payment estimated at $1,150,435. Royale’s first payment is due February 1, 2014, and all subsequent payments are due on the same day of each month after that. Royale’s final payment will be due on January 1, 2024, and will be for all principal and all accrued interest not yet paid. Payments include principal and interest. | $ | 1,500,000 | $ | 0 | |||||
Note Payable convertible into shares of Royale’s Common stock and a Warrant Agreement with certain institutional investors. The Note has a face value of $3,333,333 and issued with an original issue discount of 10% for an aggregate purchase price of $3 million. The Note is not interest bearing unless Royale is in default of the Note, in which case the Note carries an interest rate of 18% per annum. During each calendar quarter from January 1, 2013 through December 31, 2013, the holder of the Note required Royale to redeem 25% of the original principal amount each quarter. . Once notification is received, Royale, in its sole discretion, may satisfy its obligation either in cash or in shares of its common stock. However, at the Note’s maturity on December 31, 2014, any outstanding balance on the Note is required to be repaid in cash. Note is net of the Discount of Warrant Value in the amount of $1,229,354. In April 2013, 479,589 common shares were issued in lieu of the scheduled payment of $833,333. According to the note agreement, the note holders may elect to convert the principal balance into shares of the Company's common stock. During 2013, the note holders submitted conversion notices to the Company such that 787,055 common shares were issued for a reduction in the note principal of $1,666,666. In September 2013, this note was paid in full. | 1,908,668 | ||||||||
Total Long Term Debt | $ | 1,500,000 | $ | 2,258,668 | |||||
Less Current Maturity | 22,916 | $ | 2,258,668 | ||||||
Long Term Debt Less Current Portion | $ | 1,477,084 | $ | ||||||
The Warrant Agreement entitles the holder to purchase, in whole or in part, an aggregate of 500,000 shares of Royale’s Common stock at an initial exercise price of $3.00 per share. During 2013, the exercise price of these warrants was adjusted from $3.00 to $2.1176 due to the issuance of shares under the Company’s Securities Purchase Agreement. The warrant has a three year term and becomes exercisable on April 29, 2013. The value of the warrant was determined using the Black-Scholes pricing method utilizing a strike price of $3.00, 3 year maturity, a risk free interest of 0.8805%, and expected volatility of 107.7%. Based upon these inputs, the value of each warrant share was calculated to be $1.9536. | |||||||||
Maturities of long-term debt for the years subsequent to December 31, 2013 are as follows: | |||||||||
Year Ended December 31, | |||||||||
2014 | $ | 22,916 | |||||||
2015 | $ | 28,921 | |||||||
2016 | $ | 30,654 | |||||||
2017 | $ | 32,490 | |||||||
2018 | $ | 34,437 | |||||||
Thereafter | $ | 1,350,582 | |||||||
Total | $ | 1,500,000 | |||||||
NOTE_6_INCOME_TAXES
NOTE 6 - INCOME TAXES | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Income Tax Disclosure [Text Block] | ' | ||||||||
NOTE 6 - INCOME TAXES | |||||||||
Deferred tax assets and liabilities reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. | |||||||||
Significant components of the Company’s deferred assets and liabilities at December 31, 2013 and 2012, respectively, are as follows: | |||||||||
2013 | 2012 | ||||||||
Deferred Tax Assets (Liabilities): | |||||||||
Statutory Depletion Carry Forward | $ | 678,617 | $ | 776,534 | |||||
Net Operating Loss | 4,053,001 | 4,951,345 | |||||||
Other | 702,275 | 212,798 | |||||||
Share-Based Compensation | 55,990 | 58,558 | |||||||
Capital Loss / AMT Credit Carry Forward | 76,410 | 76,410 | |||||||
Charitable Contributions Carry Forward | 15,510 | 16,022 | |||||||
Allowance for Doubtful Accounts | 412,353 | 372,772 | |||||||
Oil and Gas Properties and Fixed Assets | 4,723,641 | 5,479,647 | |||||||
$ | 10,717,797 | $ | 11,944,086 | ||||||
Valuation Allowance | (10,717,797 | ) | (11,944,086 | ) | |||||
Net Deferred Tax Asset | $ | - | $ | - | |||||
Deferred Tax Assets: | |||||||||
Current | $ | 62,333 | $ | 107,563 | |||||
Non-current | (62,333 | ) | (107,563 | ) | |||||
Deferred Tax Liabilities: | |||||||||
Current | |||||||||
Non-current | |||||||||
Net Deferred Tax Asset | $ | $ | - | ||||||
At the end of 2012, management reviewed the realizability of the Company’s net deferred tax assets. Due to the Company’s cumulative losses in recent years and its inability to conclude a transaction concerning its Alaska acreage by the end of 2012, Royale and its management concluded that it is not “more-likely-than-not” its deferred tax assets will be realized. As a result, the Company recorded a full valuation allowance against the net deferred tax assets in 2012. At the end of 2013, management again reviewed the reliability of the Company’s net deferred tax assets, and due to the Company’s continued cumulative losses in recent years, Royale and it management concluded it is not “more-likely-than-not” its deferred tax assets will be realized. As a result, the Company will continue to record a full valuation allowance against the deferred tax assets in 2013. The Company will assess the realizability of the deferred tax assets at least yearly and make appropriate updates as needed. The Company had statutory percentage depletion carry forwards of approximately $1,800,000 at December 31, 2013. The depletion has no expiration date. The Company also has a net operating loss carry forward of approximately $10,400,000 at December 31, 2013, which will begin to expire in 2027. | |||||||||
A reconciliation of Royale Energy's provision for income taxes and the amount computed by applying the statutory income tax rates at December 31, 2013 and 2012, respectively, to pretax income is as follows: | |||||||||
2013 | 2012 | ||||||||
Tax (benefit) computed at statutory rate of 34% | $ | 390,712 | $ | (1,530,950 | ) | ||||
Increase (decrease) in taxes resulting from: | |||||||||
State tax / percentage depletion / other | 1,389,218 | ||||||||
Other non-deductible expenses | 3,078 | 2,889 | |||||||
Change in valuation allowance | (393,790 | ) | 9,326,664 | ||||||
Provision (benefit) | $ | - | $ | (9,187,821 | ) | ||||
The components of the Company’s tax provision are as follows: | |||||||||
2013 | 2012 | ||||||||
Current tax provision (benefit) – federal | $ | - | - | ||||||
Current tax provision (benefit) – state | - | 1,790 | |||||||
Deferred tax provision (benefit) – federal | - | (7,623,800 | ) | ||||||
Deferred tax provision (benefit) – state | - | (1,562,231 | ) | ||||||
Total provision (benefit) | $ | - | (9,187,821 | ) | |||||
In January 2007, Royale adopted additional provisions from the Income Taxes Topic of the FASB Accounting Standards Codification, which clarified the accounting for uncertainty in income taxes recognized in an entity’s financial statements and prescribes a recognition threshold and measurement attribute for financial statement disclosure of tax positions taken or expected to be taken on a tax return. As a result of our implementation of the Topic at the time of adoption and at December 31, 2013, the Company did not recognize a liability for uncertain tax positions. Currently, the only differences between our financial statements and our income tax returns relate to normal timing differences such as depreciation, depletion and amortization, which are recorded as deferred taxes on our balance sheets. We do not expect our unrecognized tax benefits to change significantly over the next 12 months. The tax years 2009 through 2012 remain open to examination by the taxing jurisdictions in which we file income tax returns. | |||||||||
NOTE_7_SERIES_AA_PREFERRED_STO
NOTE 7 - SERIES AA PREFERRED STOCK | 12 Months Ended |
Dec. 31, 2013 | |
Disclosure Text Block Supplement [Abstract] | ' |
Preferred Stock [Text Block] | ' |
NOTE 7 - SERIES AA PREFERRED STOCK | |
In April 1992, Royale Energy's Board of Directors authorized the sale of Series AA Convertible Preferred Stock. Holders of Series AA Convertible Preferred Stock have dividend, conversion and preference rights identical to Series A Convertible Preferred Stockholders. The Series AA Convertible Preferred Stock does not have the right of redemption at the stockholders' option. During the years ending December 31, 2013, and 2012, there were no conversions of Series AA Preferred stock, and as of December 31, 2013, and 2012 there were 52,784 shares of Series AA Preferred stock issued and outstanding. | |
NOTE_8_COMMON_STOCK
NOTE 8 - COMMON STOCK | 12 Months Ended |
Dec. 31, 2013 | |
Stockholders' Equity Note [Abstract] | ' |
Stockholders' Equity Note Disclosure [Text Block] | ' |
NOTE 8 - COMMON STOCK | |
In February 2013, Royale Energy entered into a Sales Agreement with C. K. Cooper & Company, Inc. (“CKCC”), under which the Company may issue and sell shares of its common stock for consideration of up to $10,000,000, from time to time in an at the market equity offering program with CKCC acting as the Company’s sales agent (the “Offering”). Sales of common stock if any, under the program will depend upon market conditions and other factors to be determined by the Company and may be made in negotiated transactions or transactions that are deemed to be “at the market offerings” as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made directly on the NASDAQ Capital Market, on any other existing trading market for the common stock or through a market maker. The Company has no obligation to sell any common shares in the program and may at any time suspend solicitation and offers under the program or terminate the program. The Company will pay CKCC a commission equal to 3.5% of the gross sales price of any such shares sold, through it as sales agent, as set forth in the Sales Agreement. The Company has also agreed to reimburse CKCC for certain expenses incurred in connection with entering into the Sales Agreement and has provided CKCC with customary indemnification rights. | |
In June 2008, Royale Energy entered into a Securities Purchase Agreement with Cranshire Capital, L.P. to issue and sell 547,945 shares of its common stock in exchange for approximately $4,000,000 (i.e. $7.30 per share). As part of the agreement, Cranshire was also issued a warrant to acquire additional shares of its common stock. The warrant is exercisable for an aggregate of 191,781 shares at an exercise price of $7.30 per share. The $7.30 per share price was negotiated as a 15% discount from the 10 day dollar volume weighted average price of the Company’s Common Stock on the NASDAQ Global Market. In conjunction with the August 2009 agreement (see below) the price of these share were adjusted to an exercise price of $1.99 per share. In March 2011, warrants were exercised for 71,918 shares of the Company’s common stock for approximately $143,117 ($1.99 per share). In May and June 2013 warrants were exercised for 321,443 shares of the Company’s Common Stock for approximately $639,672. The net proceeds from the private placement and warrant exercises went towards general corporate purposes, including the acquisition of oil and natural gas properties for future development. | |
On August 4, 2009, Royale Energy, Inc., entered into a Securities Purchase Agreement with Cranshire Capital, L.P. The terms of the agreement include the sale of 552,764 shares of common stock at $1.99 per share. The warrants include: (i) Series A Warrants, which are immediately exercisable for a period of 5 years into 329,850 shares at $2.19 per share; (ii) Series A-1 Warrants, which are exercisable beginning February 6, 2010 for a period of 5 years into 1,808 shares at $2.19 per share, (iii) Series B Warrants, which are immediately exercisable for a period of up to 1 year into 511,628 shares at $2.15 per share and (iv) Series C Warrants, which are immediately exercisable for a period of 5 years into 306,977 shares at $2.19 per share but only to the extent that the Series B Warrants are exercised and only in the same percentage that the Series B Warrants are exercised. All of such warrants contain customary adjustments for corporate events such as reorganizations, splits, dividends, and the exercise prices of all such warrants are subject to weighted-average anti-dilution adjustments in the event of additional issuances of common stock below the exercise price then in effect. The exercise price of the Series B Warrants is also subject to increases if the market price of the common stock equals or exceeds $2.40, in which case the exercise price of such Series B warrant will be increased to 90% of the closing sale price of the common stock on the trading day immediately preceding the date of exercise thereof. The Company will also provide customary registration rights in connection with the transaction. In September and October 2009, the Series B warrants were exercised for 511,628 shares of Royale Energy common stock. The net proceeds received for the shares, $1,080,650, were used for general working capital purposes. During March and April 2011, the Series A warrants were exercised for 329,850 shares of Royale Energy common stock. The net proceeds received for the shares, approximately $722,372, were used for general working capital purposes. During February and March 2012, in a separate exercise, warrants were exercised for 67,160 of the Company’s common stock. The net proceeds of approximately $185,999 were used for general working capital purposes. | |
NOTE_9_OPERATING_LEASES
NOTE 9 - OPERATING LEASES | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Disclosure Text Block Supplement [Abstract] | ' | ||||
Commitments Disclosure [Text Block] | ' | ||||
NOTE 9 - OPERATING LEASES | |||||
Royale Energy occupies office space through the use of two leases, one for their office in San Diego, CA and one for an office and yard in Woodland, CA. The San Diego lease is under a 120 month noncancellable lease contract, which expires in July 2015. The San Diego lease calls for monthly payments ranging from $27,010 to $35,271, and the Woodland lease calls for monthly payments of $900. Future minimum lease obligations as of December 31, 2013 are as follows: | |||||
Year Ended | |||||
December 31, | |||||
2014 | $ | 415,842 | |||
2015 | $ | 246,900 | |||
Thereafter | $ | - | |||
Total | $ | 662,742 | |||
Rental expense for the years ended December 31, 2013 and 2012 was $ 361,020 and $370,750 respectively. | |||||
NOTE_10_RELATED_PARTY_TRANSACT
NOTE 10 - RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2013 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions Disclosure [Text Block] | ' |
NOTE 10 - RELATED PARTY TRANSACTIONS | |
Significant Ownership Interests | |
Donald H. Hosmer, Royale Energy’s co-president and co-chief executive officer owns 6.24% of Royale Energy common stock. Donald H. Hosmer is the brother of Stephen M. Hosmer, and son of Harry E. Hosmer. | |
Stephen M. Hosmer, Royale Energy’s co-president, co-chief executive officer and chief financial officer, owns 8.41% of Royale Energy common stock. Stephen M. Hosmer is the brother of Donald H. Hosmer and son of Harry E. Hosmer. | |
Harry E. Hosmer, Royale Energy's former president and former chief executive officer, owns 4.32% of Royale Energy common stock. Donald H. and Stephen M. Hosmer are sons of Harry E. Hosmer. Donald H. Hosmer and Stephen M. Hosmer are also officers and directors of Royale Energy. | |
NOTE_11_STOCK_BASED_COMPENSATI
NOTE 11 - STOCK BASED COMPENSATION | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | ' | ||||||||||||||||
NOTE 11 - STOCK COMPENSATION PLAN | |||||||||||||||||
During the Board of Directors meeting held in December 2010, directors and executive officers of Royale Energy were each granted 50,000 stock options, a total of 400,000 options, to purchase common stock at an exercise or base price of $3.25 per share. These options are to vest in two parts; the first 200,000 options vested on January 1, 2012; the remaining 200,000 options vested on January 1, 2013. The options were granted with a legal life of five years, and a service period of two years beginning January 1, 2012. During 2012, Royale recognized compensation costs of $39,260 and a tax expense of $38,652 relating to this option grant. In 2013, Royale did not recognize any compensation costs or tax effect related to this grant. | |||||||||||||||||
The fair value of the options was calculated using the Black-Scholes option pricing method. Since, at the time of option grant, there was currently no market for options of Royale’s common stock, expected volatilities are based on historical volatility of the Company’s stock and other factors. Royale Energy uses historical data to estimate option exercise and board member turnover within the valuation model. The risk-free rate for the periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. | |||||||||||||||||
A summary of the status of Royale Energy's stock option plan as of December 31, 2013 and 2012, and changes during the years ending on those dates is presented below: | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Weighted- | Weighted- | ||||||||||||||||
Average | Average | ||||||||||||||||
Exercise | Exercise | ||||||||||||||||
Shares | Price | Shares | Price | ||||||||||||||
Options | |||||||||||||||||
Outstanding at Beginning of Year | 346,308 | $ | 3.25 | 675,000 | $ | 3.36 | |||||||||||
Granted | - | - | |||||||||||||||
Exercised | - | (283,692 | ) | $ | 3.46 | ||||||||||||
Expired or Ineligible | - | (45,000 | ) | 3.5 | |||||||||||||
Outstanding at End of Year | 346,308 | $ | 3.25 | 346,308 | $ | 3.25 | |||||||||||
Options Exercisable at Year End | 346,308 | $ | 3.25 | 346,308 | $ | 3.25 | |||||||||||
Weighted-average Fair Value of Options | $ | - | $ | - | |||||||||||||
Granted During the Year | |||||||||||||||||
At December 31, 2013, Royale Energy’s stock price, $2.59, was less than the weighted average exercise price, and as such the outstanding and exercisable stock options had no intrinsic value. These stock options have a weighted-average remaining contractual term of 2 years as of December 31, 2013. There were no new stock options granted during 2013. | |||||||||||||||||
A summary of the status of Royale Energy's restricted stock grant plans as of December 31, 2013 and 2012, and changes during the years ending on those dates is presented below: | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Weighted- | Weighted- | ||||||||||||||||
Average | Average | ||||||||||||||||
Grant-Date | Grant-Date | ||||||||||||||||
Shares | Fair Value | Shares | Fair Value | ||||||||||||||
Non-vested Shares | |||||||||||||||||
Non-vested at Beginning of Year | - | $ | - | 31,670 | $ | 3.31 | |||||||||||
Granted | - | - | |||||||||||||||
Reinstated | - | - | |||||||||||||||
Vested | - | 31,670 | $ | 3.31 | |||||||||||||
Expired or Ineligible | - | $ | - | ||||||||||||||
Non-vested at End of Year | - | - | $ | 3.31 | |||||||||||||
NOTE_12_SIMPLE_IRA_PLAN
NOTE 12 - SIMPLE IRA PLAN | 12 Months Ended |
Dec. 31, 2013 | |
Compensation and Retirement Disclosure [Abstract] | ' |
Pension and Other Postretirement Benefits Disclosure [Text Block] | ' |
NOTE 12 - SIMPLE IRA PLAN | |
In April 1998, the Company established a Simple IRA pension plan covering all employees. The Company will contribute a matching contribution to each eligible employee’s Simple IRA equal to the employee’s salary reduction contributions up to a limit of 3% of the employee’s compensation for the year. The employer contribution for the years ending December 31, 2013 and 2012, were $49,846, and $57,405 respectively. | |
NOTE_13_ENVIRONMENTAL_MATTERS
NOTE 13 - ENVIRONMENTAL MATTERS | 12 Months Ended |
Dec. 31, 2013 | |
Environmental Remediation Obligations [Abstract] | ' |
Environmental Loss Contingency Disclosure [Text Block] | ' |
NOTE 13 - ENVIRONMENTAL MATTERS | |
Royale Energy has established procedures for the continuing evaluation of its operations to identify potential environmental exposures and assure compliance with regulatory policies and procedures. Management monitors these laws and regulations and periodically assesses the propriety of its operational and accounting policies related to environmental issues. The nature of Royale Energy's business requires routine day-to-day compliance with environmental laws and regulations. Royale Energy incurred no material environmental investigation, compliance and remediation costs in 2013 or 2012. | |
Royale Energy is unable to predict whether its future operations will be materially affected by these laws and regulations. It is believed that legislation and regulations relating to environmental protection will not materially affect the results of operations of Royale Energy. | |
NOTE_14_CONCENTRATIONS_OF_CRED
NOTE 14 - CONCENTRATIONS OF CREDIT RISK | 12 Months Ended |
Dec. 31, 2013 | |
Risks and Uncertainties [Abstract] | ' |
Concentration Risk Disclosure [Text Block] | ' |
NOTE 14 - CONCENTRATIONS OF CREDIT RISK | |
The Company bids its gas sales on a month to month basis and generally sells to a single customer without commitment to future gas sales to any particular customer. The Company normally sells approximately 80% of its monthly natural gas production to one customer on a month to month basis. Since we are able to sell our natural gas to other readily available customers, the loss of any one customer would not have an adverse effect on our overall sales operations. | |
The Company maintains cash in depository institutions that are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per institution for our interest bearing accounts in the years ended December 31, 2013, and 2012. At December 31, 2013, and 2012, the Company’s non-interest bearing accounts were fully insured by the FDIC. At December 31, 2013 and 2012, cash in banks exceeded the FDIC limits by approximately $4.3 million and $1.2 million, respectively. The Company has not experienced any losses on deposits. | |
NOTE_15_COMMITMENTS_AND_CONTIN
NOTE 15 - COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies Disclosure [Text Block] | ' |
NOTE 15 - COMMITMENTS AND CONTINGENCIES | |
The Company may become involved from time to time in litigation on various matters, which are routine to the conduct of its business. The Company believes that none of these actions, individually or in the aggregate, will have a material adverse effect on its financial position or results of operations, though any adverse decision in these cases or the costs of defending or settling such claims could have a material effect on its business. | |
Douglas Jones v. Royale Energy, Broward County Circuit Court, Florida. On July 1, 2010, Douglas Jones filed a lawsuit against the Company in the Circuit Court, 17th Judicial District, Broward County, Florida. Mr. Jones was an independent contractor handling certain aspects of sales for the Company prior to July 2, 2008. He asserts that he is entitled to an unspecified amount for commissions and expenses. The Company denies that any money is owed to Mr. Jones. On August 16, 2010, the Company, through Florida counsel Adam Hodkin, filed a motion to dismiss the lawsuit for lack of jurisdiction in the Florida courts. The Court ruled that it wanted to have an evidentiary hearing on the motion. The Court has finally set a date for the evidentiary hearing on whether to grant or deny the motion to dismiss. That date is May 5, 2014. If the motion to dismiss is denied, Royale intends to answer the complaint and oppose the lawsuit vigorously. At this time, we do not expect to incur any material losses resulting from these proceedings. | |
NOTE_16_RESTATEMENT_TO_REFLECT
NOTE 16 - RESTATEMENT TO REFLECT CHANGE IN REVENUE RECOGNITION POLICY | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Accounting Changes and Error Corrections [Abstract] | ' | ||||||||||||
Accounting Changes and Error Corrections [Text Block] | ' | ||||||||||||
NOTE 16 – RESTATEMENT TO REFLECT CHANGE IN REVENUE RECOGNITION POLICY | |||||||||||||
In response to comments from the staff of the Securities and Exchange Commission’s Division of Corporation Finance, and after consultation with the Company’s Chief Financial Officer and with Padgett Stratemann & Co., LLP, the Company’s independent registered public accounting firm, the Audit Committee concluded that the Company’s revenue recognition policies incorrectly recognized (a) amounts received from sales of direct working interests to third parties as revenue, and (b) expenditures to complete development obligations for those working interests as expense. Rather, the receipt of funds from sales of direct working interests should be treated as a recovery of the Company’s capitalized costs of oil and gas properties until such costs are fully recovered. Accordingly, the financial statements as of December 31, 2012, and for the year then ended, have been restated to correct an error in our method of revenue recognition to reduce its basis in oil and gas properties, and to reduce both revenue and expense related to turnkey drilling and related depletion expense. Changes occurred in Retained Earnings, Deferred Income Tax Asset, Turnkey Drilling Revenue, Drilling and Development Expenses, Lease Impairment Expense, and Oil and Gas Properties (Successful Efforts Basis) and Equipment and Fixtures. | |||||||||||||
The revisions to the balance sheet dated December 31, 2012, results in a reduction of the carrying value of the Company’s oil and gas properties, although there has been no change in the actual ownership, market value, or reserve value (at December 31,2012) of those properties. The revision to the statement of comprehensive loss for fiscal 2012 reduces revenue from turnkey drilling activity and reduces expenses from turnkey drilling and development, lease impairment, and depreciation, depletion and amortization, increasing the loss by $1,729,590 to $13,693,651 from $11,964,061. | |||||||||||||
Royale’s Oil and Gas Properties (Successful Efforts Basis) and Equipment and Fixtures were evaluated at December 31, 2011 based upon the revised policies. An adjustment of $4,456,933 was recorded against Royale’s oil and gas properties offset by corresponding entries to its deferred tax asset and retained earnings. | |||||||||||||
For a detailed explanation of the changes to the Company’s revenue recognition policies and its effect on the Company’s balance sheet and statement of operations, see our revenue recognition policy and policy on property, plant and equipment. | |||||||||||||
The following table illustrates the effect of these changes in 2012. | |||||||||||||
As of December 31, 2012 | |||||||||||||
As Previously Reported | Adjustment | As Restated | |||||||||||
Balance Sheet | |||||||||||||
ASSETS: | |||||||||||||
Oil and Gas Properties (Successful Efforts Basis) and Equipment and Fixtures | $ | 10,955,797 | $ | (4,433,611 | ) | $ | 6,522,186 | ||||||
Total Assets | 17,503,335 | (4,433,611 | ) | 13,069,724 | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT): | |||||||||||||
Accumulated Deficit | (34,186,930 | ) | (4,433,611 | ) | (38,620,541 | ) | |||||||
Total Stockholder’s Equity (Deficit) | 662,593 | (4,433,611 | ) | (3,771,018 | ) | ||||||||
Total Liabilities and Stockholder’s Equity (Deficit) | $ | 17,503,335 | $ | (4,433,611 | ) | $ | 13,069,724 | ||||||
Statement of Operations | |||||||||||||
REVENUES: | |||||||||||||
Turnkey Drilling | $ | 2,028,863 | $ | (2,028,863 | ) | $ | 0 | ||||||
Total Revenues | 4,394,745 | (2,028,863 | ) | 2,365,882 | |||||||||
COSTS AND EXPENSES | |||||||||||||
Turnkey Drilling and Development | 449,536 | (449,536 | ) | 0 | |||||||||
Lease Impairment | 200,778 | (55,317 | ) | 145,461 | |||||||||
Depreciation, Depletion and Amortization | 1,448,002 | (783,871 | ) | 664,131 | |||||||||
Total Costs and Expenses | 8,741,001 | (1,288,724 | ) | 7,452,277 | |||||||||
Gain on Turnkey Drilling Programs | 0 | 763,461 | 763,461 | ||||||||||
Income From Operations | (4,338,156 | ) | 23,322 | (4,314,834 | ) | ||||||||
Income (Loss) Before Income Tax Expense | (4,526,117 | ) | 23,322 | (4,502,795 | ) | ||||||||
Income Tax Provision | 7,434,909 | 1,752,912 | 9,187,820 | ||||||||||
Net Income (Loss) | $ | (11,961,026 | ) | $ | (1,729,590 | ) | $ | (13,690,616 | ) | ||||
Comprehensive Income (Loss) | $ | (11,964,061 | ) | $ | (1,729,590 | ) | $ | (13,693,651 | ) | ||||
Basic Loss Per Share | (1.07 | ) | (0.16 | ) | (1.23 | ) | |||||||
Accounting_Policies_by_Policy_
Accounting Policies, by Policy (Policies) | 12 Months Ended | ||||||||||||||
Dec. 31, 2013 | |||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||
Basis of Accounting, Policy [Policy Text Block] | ' | ||||||||||||||
Description of Business | |||||||||||||||
Royale Energy is an independent oil and gas producer which also has operations in the area of turnkey drilling. Royale Energy owns wells and leases in major geological basins located primarily in California, Texas, and Utah. Royale Energy offers fractional working interests and seeks to minimize the risks of oil and gas drilling by selling multiple well drilling projects which do not include the use of debt financing. | |||||||||||||||
Use of Estimates, Policy [Policy Text Block] | ' | ||||||||||||||
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 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. | |||||||||||||||
Material estimates that are particularly susceptible to significant change relate to the estimate of Company oil and gas reserves prepared by an independent engineering consultant. Such estimates are subject to numerous uncertainties inherent in the estimation of quantities of proven reserves. Estimated reserves are used in the calculation of depletion, depreciation and amortization, unevaluated property costs, impairment of oil and natural gas properties, estimated future net cash flows, taxes, and contingencies | |||||||||||||||
Revenue Recognition, Policy [Policy Text Block] | ' | ||||||||||||||
Revenue Recognition | |||||||||||||||
Royale’s primary business is oil and gas production. Natural gas flows from the wells into gathering line systems, which are equipped occasionally with compressor systems, which in turn flow into metered transportation and customer pipelines. Monthly, price data and daily production are used to invoice customers for amounts due to Royale Energy and other working interest owners. Royale Energy operates virtually all of its own wells and receives industry standard operator fees. | |||||||||||||||
Royale Energy generally sells crude oil and natural gas under short-term agreements at prevailing market prices. Revenues are recognized when the products are delivered, which occurs when the customer has taken title and has assumed the risks and rewards of ownership, prices are fixed or determinable and collectability is reasonably assured. | |||||||||||||||
Revenues from the production of oil and natural gas properties in which the Royale Energy has an interest with other producers are recognized on the basis of Royale Energy’s net working interest. Differences between actual production and net working interest volumes are not significant. | |||||||||||||||
Royale Energy’s financial statements include its pro rata ownership of wells. Royale Energy usually sells a portion of the working interest in each well it drills or participates in to third party investors and retains a portion of the prospect for its own account. Royale Energy generally retains about a 50% working interest. All results, successful or not, are included at its pro rata ownership amounts: revenue, expenses, assets, and liabilities as defined in FASB ASC 932-323-25 and 932-360. | |||||||||||||||
Oil and Gas Properties Policy [Policy Text Block] | ' | ||||||||||||||
Oil and Gas Property and Equipment | |||||||||||||||
Depreciation, depletion and amortization, based on cost less estimated salvage value of the asset, are primarily determined under either the unit-of-production method or the straight-line method, which is based on estimated asset service life taking obsolescence into consideration. Maintenance and repairs, including planned major maintenance, are expensed as incurred. Major renewals and improvements are capitalized and the assets replaced are retired. | |||||||||||||||
The project construction phase commences with the development of the detailed engineering design and ends when the constructed assets are ready for their intended use. Interest costs, to the extent they are incurred to finance expenditures during the construction phase, are included in property, plant and equipment and are depreciated over the service life of the related assets. | |||||||||||||||
Royale Energy uses the “successful efforts” method to account for its exploration and production activities. Under this method, Royale Energy accumulates its proportionate share of costs on a well-by-well basis with certain exploratory expenditures and exploratory dry holes being expensed as incurred, and capitalizes expenditures for productive wells. Royale Energy amortizes the costs of productive wells under the unit-of-production method. | |||||||||||||||
Royale Energy carries, as an asset, exploratory well costs when the well has found a sufficient quantity of reserves to justify its completion as a producing well and where Royale Energy is making sufficient progress assessing the reserves and the economic and operating viability of the project. Exploratory well costs not meeting these criteria are charged to expense. Other exploratory expenditures, including geophysical costs and annual lease rentals, are expensed as incurred. | |||||||||||||||
Acquisition costs of proved properties are amortized using a unit-of-production method, computed on the basis of total proved oil and gas reserves. | |||||||||||||||
Capitalized exploratory drilling and development costs associated with productive depletable extractive properties are amortized using unit-of-production rates based on the amount of proved developed reserves of oil and gas that are estimated to be recoverable from existing facilities using current operating methods. | |||||||||||||||
Under the unit-of-production method, oil and gas volumes are considered produced once they have been measured through meters at custody transfer or sales transaction points at the outlet valve on the lease or field storage tank. | |||||||||||||||
Production costs are expensed as incurred. Production involves lifting the oil and gas to the surface and gathering, treating, field processing and field storage of the oil and gas. The production function normally terminates at the outlet valve on the lease or field production storage tank. Production costs are those incurred to operate and maintain Royale Energy’s wells and related equipment and facilities. They become part of the cost of oil and gas produced. These costs, sometimes referred to as lifting costs, include such items as labor costs to operate the wells and related equipment; repair and maintenance costs on the wells and equipment; materials, supplies and energy costs required to operate the wells and related equipment; and administrative expenses related to the production activity. | |||||||||||||||
Proved oil and gas properties held and used by Royale Energy are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. | |||||||||||||||
Royale Energy estimates the future undiscounted cash flows of the affected properties to judge the recoverability of carrying amounts. Cash flows used in impairment evaluations are developed using annually updated evaluation assumptions for crude oil commodity prices. Annual volumes are based on field production profiles, which are also updated annually. Prices for natural gas and other products are based on assumptions developed annually for evaluation purposes. | |||||||||||||||
Impairment analyses are generally based on proved reserves. An asset group would be impaired if the undiscounted cash flows were less than its carrying value. Impairments are measured by the amount the carrying value exceeds fair value. During 2013 and 2012, impairment losses of $70,203 and $145,461, respectively, were recorded on various capitalized lease and land costs that were no longer viable. | |||||||||||||||
Significant unproved properties are assessed for impairment individually, and valuation allowances against the capitalized costs are recorded based on the estimated economic chance of success and the length of time that Royale Energy expects to hold the properties. The valuation allowances are reviewed at least annually. | |||||||||||||||
Upon the sale or retirement of a complete field of a proved property, Royale Energy eliminates the cost from its books, and the resultant gain or loss is recorded to Royale Energy’s Statement of Operations. Upon the sale of an entire interest in an unproved property where the property has been assessed for impairment individually, a gain or loss is recognized in Royale Energy’s Statement of Operations. If a partial interest in an unproved property is sold, any funds received are accounted for as a recovery of the cost in the interest retained with any excess funds recognized as a gain. Should Royale Energy’s turnkey drilling agreements include unproved property, total drilling costs incurred to satisfy its obligations are recovered by the total funds received under the agreements. Any excess funds are recorded as a Gain on Turnkey Drilling Programs, and any costs not recovered are capitalized and accounted for under the “successful efforts” method. | |||||||||||||||
Royale Energy sponsors turnkey drilling agreement arrangements in unproved properties as a pooling of assets in a joint undertaking, whereby proceeds from participants are reported as Deferred Drilling Obligations, and then reduced as costs to complete its obligations are incurred with any excess booked against its property account to reduce any basis in its own interest. Gains on Turnkey Drilling Programs represent funds received from turnkey drilling participants in excess of all costs Royale incurs during the drilling programs (e.g., lease acquisition, exploration and development costs), including costs incurred on behalf of participants and costs incurred for its own account; and are recognized only upon making this determination after Royale’s obligations have been fulfilled. | |||||||||||||||
The contracts require the participants pay Royale Energy the full contract price upon execution of the agreement. Royale Energy completes the drilling activities typically between 10 and 30 days after drilling begins. The participant retains an undivided or proportional beneficial interest in the property, and is also responsible for its proportionate share of operating costs. Royale Energy retains legal title to the lease. The participants purchase a working interest directly in the well bore. | |||||||||||||||
In these working interest arrangements, the participants are responsible for sharing in the risk of development, but also sharing in a proportional interest in rights to revenues and proportional liability for the cost of operations after drilling is completed and the interest is conveyed to the participant. | |||||||||||||||
A certain portion of the turnkey drilling participant’s funds received are non-refundable. The company holds all funds invested as Deferred Drilling Obligations until drilling is complete. Occasionally, drilling is delayed due to the permitting process or drilling rig availability. At December 31, 2013 and 2012, Royale Energy had Deferred Drilling Obligations of $6,125,933 and $8,693,743 respectively. | |||||||||||||||
If Royale Energy is unable to drill the wells, and a suitable replacement well is not found, Royale would retain the non-refundable portion of the contact and return the remaining funds to the participant. Included in cash and cash equivalents are amounts for use in completion of turnkey drilling programs in progress. | |||||||||||||||
Losses on properties sold are recognized when incurred or when the properties are held for sale and the fair value of the properties is less than the carrying value. | |||||||||||||||
Cash and Cash Equivalents, Policy [Policy Text Block] | ' | ||||||||||||||
Cash and Cash Equivalents | |||||||||||||||
Cash and cash equivalents include cash on hand and on deposit, and highly liquid debt instruments with maturities of three months or less | |||||||||||||||
Inventory, Policy [Policy Text Block] | ' | ||||||||||||||
Inventory | |||||||||||||||
Inventory consists of well supplies, pipeline and spare parts and is carried at lower of cost or market. During 2013, we had a write down of $39,185 on certain oil and gas inventory and in 2012 we had a write down of $62,744 on certain oil and gas inventory to its estimated current market value | |||||||||||||||
Receivables, Policy [Policy Text Block] | ' | ||||||||||||||
Accounts Receivable | |||||||||||||||
The Company provides for uncollectible accounts receivable using the allowance method of accounting for bad debts. Under this method of accounting, a provision for uncollectible accounts is charged to earnings. The allowance account is increased or decreased based on past collection history and management’s evaluation of accounts receivable. All amounts considered uncollectible are charged against the allowance account and recoveries of previously charged off accounts are added to the allowance. At December 31, 2013 and 2012, the Company established an allowance for uncollectable accounts of $1,081,580 and $934,876, respectively, for receivables from direct working interest investors whose expenses on non-producing wells were unlikely to be collected from revenue | |||||||||||||||
Property, Plant and Equipment, Policy [Policy Text Block] | ' | ||||||||||||||
Equipment and Fixtures | |||||||||||||||
Equipment and fixtures are stated at cost and depreciated over the estimated useful lives of the assets, which range from three to seven years, using the straight-line method. Repairs and maintenance are charged to expense as incurred. When assets are sold or retired, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in income. Maintenance and repairs, which neither materially add to the value of the property nor appreciably prolong its life, are charged to expense as incurred. Gains or losses on dispositions of property and equipment, other than oil and gas, are reflected in operations | |||||||||||||||
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | ' | ||||||||||||||
Stock Based Compensation | |||||||||||||||
Royale Energy has a stock-based employee compensation plan, which is more fully described in Note 12. Effective January 1, 2006, the Company adopted the Compensation – Stock Compensation Topic of the FASB Accounting Standards Codification, which addresses the accounting for stock-based payment transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments. The Company uses the Black-Scholes option-pricing model to determine the fair value of stock-based awards. | |||||||||||||||
Income Tax, Policy [Policy Text Block] | ' | ||||||||||||||
Income Taxes | |||||||||||||||
Royale utilizes the asset and liability approach to measure deferred tax assets and liabilities based on temporary differences existing at each balance sheet date using currently enacted tax rates in accordance with the Income Taxes Topic of the FASB Accounting Standards Codification. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Under the Topic, deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. | |||||||||||||||
The provision for income taxes is based on pretax financial accounting income. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax basis of assets and liabilities and their reported net amounts | |||||||||||||||
Fair Value Measurement, Policy [Policy Text Block] | ' | ||||||||||||||
Fair Value Measurements | |||||||||||||||
According to Fair Value Measurements and Disclosures Topic of the FASB Accounting Standards Codification, assets and liabilities that are measured at fair value on a recurring and nonrecurring basis in period subsequent to initial recognition, the reporting entity shall disclose information that enable users of its financial statements to assess the inputs used to develop those measurements and for recurring fair value measurements using significant unobservable inputs, the effect of the measurements on earnings for the period. | |||||||||||||||
At December 31, 2013, Royale Energy reported the fair value of $16,448 in available for sale securities. The fair value was determined using the number of shares owned as of December 31, 2013, multiplied by the market price of those securities on December 31, 2013. | |||||||||||||||
The table below summarizes Royale’s fair value measurements and the level within the fair value hierarchy in which the fair value measurements fall. At December 31, 2012, Royale Energy quoted prices in active markets for identical assets when determining the fair value measurements at the reporting date. | |||||||||||||||
Description | 12/31/13 | Level 1 | 12/31/12 | Level 1 | |||||||||||
Available for Sale Securities | $ | 16,448 | $ | 16,448 | $ | - | $ | - | |||||||
Reclassification, Policy [Policy Text Block] | ' | ||||||||||||||
Reclassifications | |||||||||||||||
Certain items in the financial statements have been reclassified to maintain consistency and comparability for all | |||||||||||||||
periods presented herein. The company has determined that Delay Rentals expenses are more fairly broken out of Lease Operating Expenses. The reclassification is reflected in all years presented. | |||||||||||||||
New Accounting Pronouncements, Policy [Policy Text Block] | ' | ||||||||||||||
Recently Issued Accounting Pronouncements | |||||||||||||||
The Company has reviewed the updates issued by the Financial Accounting Standards Board (FASB) during the year ended December 31, 2013, and have determined that the updates are not applicable to the Company |
NOTE_1_SUMMARY_OF_SIGNIFICANT_1
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||||||||
Dec. 31, 2013 | |||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | 'Basic and diluted income (losses) per share are calculated as follows: | ||||||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||
Income | Shares | Per-Share | |||||||||||||
(Numerator) | (Denominator) | Amount | |||||||||||||
Basic Income Per Share: | |||||||||||||||
Net income available to common stock | $ | 1,149,153 | 13,853,290 | $ | 0.08 | ||||||||||
Diluted Income Per Share: | |||||||||||||||
Effect of dilutive securities and stock options | 435,195 | $ | 0.00 | ||||||||||||
Net income available to common stock | $ | 1,149,153 | 14,288,485 | $ | 0.08 | ||||||||||
For the Year Ended December 31, 2012 | |||||||||||||||
Income | Shares | Per-Share | |||||||||||||
(Numerator) | (Denominator) | Amount | |||||||||||||
Basic Loss Per Share: | |||||||||||||||
Net loss available to common stock | $ | (13,690,616 | ) | 11,133,377 | $ | (1.23 | ) | ||||||||
Loss Per Share: | |||||||||||||||
Effect of dilutive securities and stock options | - | - | - | ||||||||||||
Net loss available to common stock | $ | (13,690,616 | ) | 11,133,377 | $ | (1.23 | ) | ||||||||
Available-for-sale Securities [Table Text Block] | 'The table below summarizes Royale’s fair value measurements and the level within the fair value hierarchy in which the fair value measurements fall. At December 31, 2012, Royale Energy quoted prices in active markets for identical assets when determining the fair value measurements at the reporting date. | ||||||||||||||
Description | 12/31/13 | Level 1 | 12/31/12 | Level 1 | |||||||||||
Available for Sale Securities | $ | 16,448 | $ | 16,448 | $ | - | $ | - |
NOTE_2_OIL_AND_GAS_PROPERTIES_1
NOTE 2 - OIL AND GAS PROPERTIES, EQUIPMENT AND FIXTURES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | ' | ||||||||
Schedule of Oil and Gas Properties, Equipment and Fixtures [Table Text Block] | 'Oil and gas properties, equipment and fixtures consist of the following at December 31: | ||||||||
2013 | 2012 | ||||||||
Oil and Gas | |||||||||
Producing properties, including intangible drilling costs | $ | 4,862,657 | $ | 5,025,723 | |||||
Undeveloped properties | 2,779,672 | 4,034,292 | |||||||
Lease and well equipment | 4,075,320 | 4,000,524 | |||||||
11,717,649 | 13,060,539 | ||||||||
Accumulated depletion, depreciation and amortization | (7,065,362 | ) | (7,163,943 | ) | |||||
4,652,287 | $ | 5,896,596 | |||||||
2013 | 2012 | ||||||||
Commercial and Other | |||||||||
Real estate, including furniture and fixtures | $ | 2,503,803 | $ | 502,344 | |||||
Vehicles | 120,314 | 151,669 | |||||||
Furniture and equipment | 1,300,523 | 1,299,300 | |||||||
3,924,640 | 1,953,313 | ||||||||
Accumulated depreciation | (1,339,545 | ) | (1,327,723 | ) | |||||
2,585,095 | 625,590 | ||||||||
$ | 7,237,382 | 6,522,186 | |||||||
Cost Incurred in Oil and Gas Property Acquisition, Exploration, and Development Activities Disclosure [Table Text Block] | 'The following sets forth costs incurred for oil and gas property acquisition and development activities, whether capitalized or expensed: | ||||||||
2013 | 2012 | ||||||||
Acquisition - Proved | $ | 7,663 | 24,298 | ||||||
Acquisition- Unproved | $ | 0 | 24,606 | ||||||
Development | $ | 1,080,043 | 577,708 | ||||||
Exploration | $ | 4,822,260 | 1,077,001 | ||||||
Capitalized Exploratory Well Costs, Roll Forward [Table Text Block] | 'The guidance set forth in the Continued Capitalization of Exploratory Well Costs paragraph of the Extractive Activities Topic of the FASB Accounting Standards Codification requires that we evaluate all existing capitalized exploratory well costs and disclose the extent to which any such capitalized costs have become impaired and are expensed or reclassified during a fiscal period. We did not make any additions to capitalized exploratory well costs pending a determination of proved reserves during 2013 or 2012. We did not charge any previously capitalized exploratory well costs to expense upon adoption of Topic. | ||||||||
12 Months Ended December 31, | |||||||||
2013 | 2012 | ||||||||
Beginning balance at January 1 | $ | 0 | $ | 0 | |||||
Additions to capitalized exploratory well costs pending the determination of proved reserves | $ | 410,303 | $ | 0 | |||||
Reclassifications to wells, facilities, and equipment based on the determination of proved reserves | $ | (410,303 | ) | $ | 0 | ||||
Ending balance at December 31 | $ | 0 | $ | 0 | |||||
Results of Operations for Oil and Gas Producing Activities Disclosure [Table Text Block] | 'The results of operations from oil and gas producing and exploration activities (excluding corporate overhead and interest costs) for the two years ended December 31, are as follows: | ||||||||
2013 | 2012 | ||||||||
Oil and gas sales | $ | 1,913,364 | 1,673,538 | ||||||
Production related costs | (1,394,185 | ) | (1,139,750 | ) | |||||
Lease Impairment | (70,203 | ) | (145,461 | ) | |||||
Depreciation, depletion and amortization | (309,806 | ) | (664,131 | ) | |||||
Results of operations from producing and | $ | 139,170 | (275,804 | ) | |||||
exploration activities | |||||||||
Income Taxes (Benefit) | 0 | (9,187,821 | ) | ||||||
Net Results | $ | 139,170 | (9,463,625 | ) |
NOTE_3_ASSET_RETIREMENT_OBLIGA1
NOTE 3 - ASSET RETIREMENT OBLIGATION (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Asset Retirement Obligation Disclosure [Abstract] | ' | ||||||||
Schedule of Change in Asset Retirement Obligation [Table Text Block] | ' | ||||||||
2013 | 2012 | ||||||||
Asset retirement obligation Beginning of the year | $ | 954,088 | $ | 575,612 | |||||
Liabilities incurred during the period | 12,358 | 347,947 | |||||||
Settlements | (97,522 | ) | 0 | ||||||
Accretion expense | 17,106 | 6,741 | |||||||
Revisions in estimated cash flow | 23,661 | 23,788 | |||||||
Asset retirement obligation End of year | $ | 862,369 | $ | 954,088 |
NOTE_5_LONGTERM_DEBT_Tables
NOTE 5 - LONG-TERM DEBT (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Disclosure Text Block [Abstract] | ' | ||||||||
Schedule of Debt [Table Text Block] | ' | ||||||||
2013 | 2012 | ||||||||
Revolving line of credit secured by oil and gas properties, with a maximum available of $14,250,000 at December 31, 2012, issued by Texas Capital Bank, N.A. for the purposes of refinancing Royale’s existing debt and to fund development, exploration and acquisition activities as well as other general corporate purposes. The agreement was entered into on February 13, 2009. Interest is at Texas Capital Bank’s “Base Rate” plus 1.00% with an “Adjusted Base Rate” of 5.00%, resulting in a rate of 5.00% at December 31, 2013 and 2012, payable monthly with borrowing base reductions of $100,000 commencing on January 1, 2012. As part of this agreement, Texas Capital Bank has issued letters of credit in the amount of $750,000 on behalf of the Company to various agencies. At December 31, 2012, Royale’s borrowing base with Texas Capital Bank was $350,000. The revolving line of credit matured in February 2013. | $ | 0 | $ | 350,000 | |||||
On December 24, 2013, Royale Energy, Inc. entered into an agreement between the Company, as buyer, and North Island Financial Credit Union as seller, for the purchase of commercial property in San Diego, California, for a purchase price of $2,000,000, of which $500,000 was paid in cash on the date of purchase, and $1,500,000 was borrowed from AmericanWest Bank, NA, with a note secured by the property being purchased. The note carries an interest rate of 5.75% until paid in full. Royale will pay this loan in 119 regular payments of $9,525 each and one balloon payment estimated at $1,150,435. Royale’s first payment is due February 1, 2014, and all subsequent payments are due on the same day of each month after that. Royale’s final payment will be due on January 1, 2024, and will be for all principal and all accrued interest not yet paid. Payments include principal and interest. | $ | 1,500,000 | $ | 0 | |||||
Note Payable convertible into shares of Royale’s Common stock and a Warrant Agreement with certain institutional investors. The Note has a face value of $3,333,333 and issued with an original issue discount of 10% for an aggregate purchase price of $3 million. The Note is not interest bearing unless Royale is in default of the Note, in which case the Note carries an interest rate of 18% per annum. During each calendar quarter from January 1, 2013 through December 31, 2013, the holder of the Note required Royale to redeem 25% of the original principal amount each quarter. . Once notification is received, Royale, in its sole discretion, may satisfy its obligation either in cash or in shares of its common stock. However, at the Note’s maturity on December 31, 2014, any outstanding balance on the Note is required to be repaid in cash. Note is net of the Discount of Warrant Value in the amount of $1,229,354. In April 2013, 479,589 common shares were issued in lieu of the scheduled payment of $833,333. According to the note agreement, the note holders may elect to convert the principal balance into shares of the Company's common stock. During 2013, the note holders submitted conversion notices to the Company such that 787,055 common shares were issued for a reduction in the note principal of $1,666,666. In September 2013, this note was paid in full. | 1,908,668 | ||||||||
Total Long Term Debt | $ | 1,500,000 | $ | 2,258,668 | |||||
Less Current Maturity | 22,916 | $ | 2,258,668 | ||||||
Long Term Debt Less Current Portion | $ | 1,477,084 | $ | ||||||
Schedule of Maturities of Long-term Debt [Table Text Block] | 'Maturities of long-term debt for the years subsequent to December 31, 2013 are as follows: | ||||||||
Year Ended December 31, | |||||||||
2014 | $ | 22,916 | |||||||
2015 | $ | 28,921 | |||||||
2016 | $ | 30,654 | |||||||
2017 | $ | 32,490 | |||||||
2018 | $ | 34,437 | |||||||
Thereafter | $ | 1,350,582 | |||||||
Total | $ | 1,500,000 |
NOTE_6_INCOME_TAXES_Tables
NOTE 6 - INCOME TAXES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | 'Significant components of the Company’s deferred assets and liabilities at December 31, 2013 and 2012, respectively, are as follows: | ||||||||
2013 | 2012 | ||||||||
Deferred Tax Assets (Liabilities): | |||||||||
Statutory Depletion Carry Forward | $ | 678,617 | $ | 776,534 | |||||
Net Operating Loss | 4,053,001 | 4,951,345 | |||||||
Other | 702,275 | 212,798 | |||||||
Share-Based Compensation | 55,990 | 58,558 | |||||||
Capital Loss / AMT Credit Carry Forward | 76,410 | 76,410 | |||||||
Charitable Contributions Carry Forward | 15,510 | 16,022 | |||||||
Allowance for Doubtful Accounts | 412,353 | 372,772 | |||||||
Oil and Gas Properties and Fixed Assets | 4,723,641 | 5,479,647 | |||||||
$ | 10,717,797 | $ | 11,944,086 | ||||||
Valuation Allowance | (10,717,797 | ) | (11,944,086 | ) | |||||
Net Deferred Tax Asset | $ | - | $ | - | |||||
Deferred Tax Assets: | |||||||||
Current | $ | 62,333 | $ | 107,563 | |||||
Non-current | (62,333 | ) | (107,563 | ) | |||||
Deferred Tax Liabilities: | |||||||||
Current | |||||||||
Non-current | |||||||||
Net Deferred Tax Asset | $ | $ | - | ||||||
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | 'A reconciliation of Royale Energy's provision for income taxes and the amount computed by applying the statutory income tax rates at December 31, 2013 and 2012, respectively, to pretax income is as follows: | ||||||||
2013 | 2012 | ||||||||
Tax (benefit) computed at statutory rate of 34% | $ | 390,712 | $ | (1,530,950 | ) | ||||
Increase (decrease) in taxes resulting from: | |||||||||
State tax / percentage depletion / other | 1,389,218 | ||||||||
Other non-deductible expenses | 3,078 | 2,889 | |||||||
Change in valuation allowance | (393,790 | ) | 9,326,664 | ||||||
Provision (benefit) | $ | - | $ | (9,187,821 | ) | ||||
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | 'The components of the Company’s tax provision are as follows: | ||||||||
2013 | 2012 | ||||||||
Current tax provision (benefit) – federal | $ | - | - | ||||||
Current tax provision (benefit) – state | - | 1,790 | |||||||
Deferred tax provision (benefit) – federal | - | (7,623,800 | ) | ||||||
Deferred tax provision (benefit) – state | - | (1,562,231 | ) | ||||||
Total provision (benefit) | $ | - | (9,187,821 | ) |
NOTE_9_OPERATING_LEASES_Tables
NOTE 9 - OPERATING LEASES (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Disclosure Text Block Supplement [Abstract] | ' | ||||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | 'Future minimum lease obligations as of December 31, 2013 are as follows: | ||||
Year Ended | |||||
December 31, | |||||
2014 | $ | 415,842 | |||
2015 | $ | 246,900 | |||
Thereafter | $ | - | |||
Total | $ | 662,742 |
NOTE_11_STOCK_BASED_COMPENSATI1
NOTE 11 - STOCK BASED COMPENSATION (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | 'A summary of the status of Royale Energy's stock option plan as of December 31, 2013 and 2012, and changes during the years ending on those dates is presented below: | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Weighted- | Weighted- | ||||||||||||||||
Average | Average | ||||||||||||||||
Exercise | Exercise | ||||||||||||||||
Shares | Price | Shares | Price | ||||||||||||||
Options | |||||||||||||||||
Outstanding at Beginning of Year | 346,308 | $ | 3.25 | 675,000 | $ | 3.36 | |||||||||||
Granted | - | - | |||||||||||||||
Exercised | - | (283,692 | ) | $ | 3.46 | ||||||||||||
Expired or Ineligible | - | (45,000 | ) | 3.5 | |||||||||||||
Outstanding at End of Year | 346,308 | $ | 3.25 | 346,308 | $ | 3.25 | |||||||||||
Options Exercisable at Year End | 346,308 | $ | 3.25 | 346,308 | $ | 3.25 | |||||||||||
Weighted-average Fair Value of Options | $ | - | $ | - | |||||||||||||
Granted During the Year | |||||||||||||||||
Schedule of Nonvested Restricted Stock Units Activity [Table Text Block] | 'A summary of the status of Royale Energy's restricted stock grant plans as of December 31, 2013 and 2012, and changes during the years ending on those dates is presented below: | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Weighted- | Weighted- | ||||||||||||||||
Average | Average | ||||||||||||||||
Grant-Date | Grant-Date | ||||||||||||||||
Shares | Fair Value | Shares | Fair Value | ||||||||||||||
Non-vested Shares | |||||||||||||||||
Non-vested at Beginning of Year | - | $ | - | 31,670 | $ | 3.31 | |||||||||||
Granted | - | - | |||||||||||||||
Reinstated | - | - | |||||||||||||||
Vested | - | 31,670 | $ | 3.31 | |||||||||||||
Expired or Ineligible | - | $ | - | ||||||||||||||
Non-vested at End of Year | - | - | $ | 3.31 |
NOTE_16_RESTATEMENT_TO_REFLECT1
NOTE 16 - RESTATEMENT TO REFLECT CHANGE IN REVENUE RECOGNITION POLICY (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Accounting Changes and Error Corrections [Abstract] | ' | ||||||||||||
Schedule of Error Corrections and Prior Period Adjustments [Table Text Block] | 'The following table illustrates the effect of these changes in 2012. | ||||||||||||
As of December 31, 2012 | |||||||||||||
As Previously Reported | Adjustment | As Restated | |||||||||||
Balance Sheet | |||||||||||||
ASSETS: | |||||||||||||
Oil and Gas Properties (Successful Efforts Basis) and Equipment and Fixtures | $ | 10,955,797 | $ | (4,433,611 | ) | $ | 6,522,186 | ||||||
Total Assets | 17,503,335 | (4,433,611 | ) | 13,069,724 | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT): | |||||||||||||
Accumulated Deficit | (34,186,930 | ) | (4,433,611 | ) | (38,620,541 | ) | |||||||
Total Stockholder’s Equity (Deficit) | 662,593 | (4,433,611 | ) | (3,771,018 | ) | ||||||||
Total Liabilities and Stockholder’s Equity (Deficit) | $ | 17,503,335 | $ | (4,433,611 | ) | $ | 13,069,724 | ||||||
Statement of Operations | |||||||||||||
REVENUES: | |||||||||||||
Turnkey Drilling | $ | 2,028,863 | $ | (2,028,863 | ) | $ | 0 | ||||||
Total Revenues | 4,394,745 | (2,028,863 | ) | 2,365,882 | |||||||||
COSTS AND EXPENSES | |||||||||||||
Turnkey Drilling and Development | 449,536 | (449,536 | ) | 0 | |||||||||
Lease Impairment | 200,778 | (55,317 | ) | 145,461 | |||||||||
Depreciation, Depletion and Amortization | 1,448,002 | (783,871 | ) | 664,131 | |||||||||
Total Costs and Expenses | 8,741,001 | (1,288,724 | ) | 7,452,277 | |||||||||
Gain on Turnkey Drilling Programs | 0 | 763,461 | 763,461 | ||||||||||
Income From Operations | (4,338,156 | ) | 23,322 | (4,314,834 | ) | ||||||||
Income (Loss) Before Income Tax Expense | (4,526,117 | ) | 23,322 | (4,502,795 | ) | ||||||||
Income Tax Provision | 7,434,909 | 1,752,912 | 9,187,820 | ||||||||||
Net Income (Loss) | $ | (11,961,026 | ) | $ | (1,729,590 | ) | $ | (13,690,616 | ) | ||||
Comprehensive Income (Loss) | $ | (11,964,061 | ) | $ | (1,729,590 | ) | $ | (13,693,651 | ) | ||||
Basic Loss Per Share | (1.07 | ) | (0.16 | ) | (1.23 | ) |
NOTE_1_SUMMARY_OF_SIGNIFICANT_2
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ' | ' | ' |
Joint Venture, Ownership Interest | 50.00% | ' | ' |
Impairment of Oil and Gas Properties | $70,203 | $145,461 | $4,456,933 |
Customer Deposits, Current | 6,125,933 | 8,693,743 | ' |
Inventory Write-down | 39,185 | 62,744 | ' |
Allowance for Doubtful Accounts Receivable | 1,081,580 | 934,876 | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares) | ' | 1,104,314 | ' |
Available-for-sale Securities | $16,448 | $0 | ' |
Minimum [Member] | ' | ' | ' |
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ' | ' | ' |
Property, Plant and Equipment, Useful Life | '3 years | ' | ' |
Maximum [Member] | ' | ' | ' |
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ' | ' | ' |
Property, Plant and Equipment, Useful Life | '7 years | ' | ' |
NOTE_1_SUMMARY_OF_SIGNIFICANT_3
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of Earnings Per Share, Basic and Diluted (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Basic Income Per Share: | ' | ' |
Net income (loss) available to common stock (in Dollars per share) | $0.08 | ($1.23) |
Diluted Income Per Share: | ' | ' |
Net income (loss) available to common stock (in Dollars per share) | $0.08 | ($1.23) |
Income (Numerator) [Member] | ' | ' |
Basic Income Per Share: | ' | ' |
Net income (loss) available to common stock (in Dollars) | $1,149,153 | ($13,690,616) |
Diluted Income Per Share: | ' | ' |
Effect of dilutive securities and stock options (in Dollars) | 0 | 0 |
Net income (loss) available to common stock (in Dollars) | $1,149,153 | ($13,690,616) |
Shares (denominator) [Member] | ' | ' |
Basic Income Per Share: | ' | ' |
Net income (loss) available to common stock | 13,853,290 | 11,133,377 |
Diluted Income Per Share: | ' | ' |
Effect of dilutive securities and stock options | 435,195 | 0 |
Net income (loss) available to common stock | 14,288,485 | 11,133,377 |
Per-share amount [Member] | ' | ' |
Basic Income Per Share: | ' | ' |
Net income (loss) available to common stock (in Dollars per share) | $0.08 | ($1.23) |
Diluted Income Per Share: | ' | ' |
Effect of dilutive securities and stock options (in Dollars per share) | $0 | $0 |
Net income (loss) available to common stock (in Dollars per share) | $0.08 | ($1.23) |
NOTE_1_SUMMARY_OF_SIGNIFICANT_4
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of Available-for-Sale Securities (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Available for Sale Securities | $16,448 | $0 |
Fair Value, Inputs, Level 1 [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Available for Sale Securities | $16,448 | $0 |
NOTE_2_OIL_AND_GAS_PROPERTIES_2
NOTE 2 - OIL AND GAS PROPERTIES, EQUIPMENT AND FIXTURES (Details) - Schedule of Oil and Gas Properties, Equipment and Fixtures (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Oil and Gas | ' | ' |
Producing properties, including intangible drilling costs | $4,862,657 | $5,025,723 |
Undeveloped properties | 2,779,672 | 4,034,292 |
Lease and well equipment | 4,075,320 | 4,000,524 |
11,717,649 | 13,060,539 | |
Accumulated depletion, depreciation and amortization | -7,065,362 | -7,163,943 |
4,652,287 | 5,896,596 | |
Commercial and Other | ' | ' |
Real estate, including furniture and fixtures | 2,503,803 | 502,344 |
Vehicles | 120,314 | 151,669 |
Furniture and equipment | 1,300,523 | 1,299,300 |
3,924,640 | 1,953,313 | |
Accumulated depreciation | -1,339,545 | -1,327,723 |
2,585,095 | 625,590 | |
$7,237,382 | $6,522,186 |
NOTE_2_OIL_AND_GAS_PROPERTIES_3
NOTE 2 - OIL AND GAS PROPERTIES, EQUIPMENT AND FIXTURES (Details) - Cost Incurred in Oil and Gas Property Acquisition, Exploration, and Development Activities Disclosure (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Cost Incurred in Oil and Gas Property Acquisition, Exploration, and Development Activities Disclosure [Abstract] | ' | ' |
Acquisition - Proved | $7,663 | $24,298 |
Acquisition- Unproved | 0 | 24,606 |
Development | 1,080,043 | 577,708 |
Exploration | $4,822,260 | $1,077,001 |
NOTE_2_OIL_AND_GAS_PROPERTIES_4
NOTE 2 - OIL AND GAS PROPERTIES, EQUIPMENT AND FIXTURES (Details) - Capitalized Exploratory Well Costs, Roll Forward (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Capitalized Exploratory Well Costs, Roll Forward [Abstract] | ' | ' |
Beginning balance at January 1 | $0 | $0 |
Additions to capitalized exploratory well costs pending the determination of proved reserves | 410,303 | 0 |
Reclassifications to wells, facilities, and equipment based on the determination of proved reserves | -410,303 | 0 |
Ending balance at December 31 | $0 | $0 |
NOTE_2_OIL_AND_GAS_PROPERTIES_5
NOTE 2 - OIL AND GAS PROPERTIES, EQUIPMENT AND FIXTURES (Details) - Results of Operations for Oil and Gas Producing Activities Disclosure (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Results of Operations for Oil and Gas Producing Activities Disclosure [Abstract] | ' | ' |
Oil and gas sales | $1,913,364 | $1,673,538 |
Production related costs | -1,394,185 | -1,139,750 |
Lease Impairment | -70,203 | -145,461 |
Depreciation, depletion and amortization | -309,806 | -664,131 |
Results of operations from producing and exploration activities | 139,170 | -275,804 |
Income Taxes (Benefit) | 0 | -9,187,821 |
Net Results | $139,170 | ($9,463,625) |
NOTE_3_ASSET_RETIREMENT_OBLIGA2
NOTE 3 - ASSET RETIREMENT OBLIGATION (Details) - Schedule of Change in Asset Retirement Obligation (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule of Change in Asset Retirement Obligation [Abstract] | ' | ' |
Asset retirement obligation Beginning of the year | $954,088 | $575,612 |
Liabilities incurred during the period | 12,358 | 347,947 |
Settlements | -97,522 | 0 |
Accretion expense | 17,106 | 6,741 |
Revisions in estimated cash flow | 23,661 | 23,788 |
Asset retirement obligation End of year | $862,369 | $954,088 |
NOTE_4_TURNKEY_DRILLING_CONTRA1
NOTE 4 - TURNKEY DRILLING CONTRACTS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Deferred Revenue Disclosure [Abstract] | ' | ' |
Customer Deposits, Current | $6,125,933 | $8,693,743 |
NOTE_5_LONGTERM_DEBT_Details
NOTE 5 - LONG-TERM DEBT (Details) (Convertible Note Payable [Member], USD $) | 12 Months Ended |
Dec. 31, 2013 | |
NOTE 5 - LONG-TERM DEBT (Details) [Line Items] | ' |
Class of Warrant or Rights, Granted (in Shares) | 500,000 |
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per Item) | 3 |
Warrant Term | '3 years |
Class of Warrant or Right, Date from which Warrants or Rights Exercisable | 29-Apr-13 |
Fair Value Assumptions, Exercise Price (in Dollars per share) | $3 |
Fair Value Assumptions, Expected Term | '3 years |
Fair Value Assumptions, Risk Free Interest Rate | 0.88% |
Fair Value Assumptions, Expected Volatility Rate | 107.70% |
Class of Warrant or Rights, fair value, per share (in Dollars per share) | $1.95 |
Adjusted Exercise Price of Warrants [Member] | ' |
NOTE 5 - LONG-TERM DEBT (Details) [Line Items] | ' |
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per Item) | 2.1176 |
NOTE_5_LONGTERM_DEBT_Details_S
NOTE 5 - LONG-TERM DEBT (Details) - Schedule of Debt (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
NOTE 5 - LONG-TERM DEBT (Details) - Schedule of Debt [Line Items] | ' | ' |
Long Term Debt | $1,500,000 | $2,258,668 |
Less Current Maturity | 22,916 | 2,258,668 |
Long Term Debt Less Current Portion | 1,477,084 | ' |
American West Bank, NA [Member] | ' | ' |
NOTE 5 - LONG-TERM DEBT (Details) - Schedule of Debt [Line Items] | ' | ' |
Long Term Debt | 1,500,000 | 0 |
Convertible Note Payable [Member] | ' | ' |
NOTE 5 - LONG-TERM DEBT (Details) - Schedule of Debt [Line Items] | ' | ' |
Long Term Debt | ' | 1,908,668 |
Line of Credit [Member] | ' | ' |
NOTE 5 - LONG-TERM DEBT (Details) - Schedule of Debt [Line Items] | ' | ' |
Long Term Debt | $0 | $350,000 |
NOTE_5_LONGTERM_DEBT_Details_S1
NOTE 5 - LONG-TERM DEBT (Details) - Schedule of Debt (Parentheticals) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
NOTE 5 - LONG-TERM DEBT (Details) - Schedule of Debt (Parentheticals) [Line Items] | ' | ' |
Purchase Agreement, Purchase Price (in Dollars) | $3,924,640 | $1,953,313 |
Convertible Note Payable, Aggregate Purchase Price (in Dollars) | 0 | 2,784,689 |
American West Bank, NA [Member] | ' | ' |
NOTE 5 - LONG-TERM DEBT (Details) - Schedule of Debt (Parentheticals) [Line Items] | ' | ' |
Purchase Agreement, Purchase Price (in Dollars) | 2,000,000 | ' |
Purchase Price, Cash Paid (in Dollars) | 500,000 | ' |
Note (in Dollars) | 1,500,000 | ' |
Note, Interest Rate | 5.75% | ' |
Note, Payment | '119 regular payments of $9,525 each and one balloon payment estimated at $1,150,435 | ' |
Note, First Payment | 1-Feb-14 | ' |
Note, due on | 1-Jan-24 | ' |
Convertible Note Payable [Member] | ' | ' |
NOTE 5 - LONG-TERM DEBT (Details) - Schedule of Debt (Parentheticals) [Line Items] | ' | ' |
Note (in Dollars) | 3,333,333 | 3,333,333 |
Convertible Note Payable, Original Issue Discount | 10.00% | 10.00% |
Convertible Note Payable, Aggregate Purchase Price (in Dollars) | 3 | 3 |
Convertible Note Payable, Interest | 'The Note is not interest bearing unless Royale is in default of the Note, in which case the Note carries an interest rate of 18% per annum | 'The Note is not interest bearing unless Royale is in default of the Note, in which case the Note carries an interest rate of 18% per annum |
Convertible Note Payable, Redeem | 'During each calendar quarter from January 1, 2013 through December 31, 2013, the holder of the Note required Royale to redeem 25% of the original principal amount each quarter. | 'During each calendar quarter from January 1, 2013 through December 31, 2013, the holder of the Note required Royale to redeem 25% of the original principal amount each quarter. |
Convertible Note, Discount (in Dollars) | 1,229,354 | 1,229,354 |
Line of Credit [Member] | ' | ' |
NOTE 5 - LONG-TERM DEBT (Details) - Schedule of Debt (Parentheticals) [Line Items] | ' | ' |
Revolving line of credit, secured by | 'secured by oil and gas properties | 'secured by oil and gas properties |
Revolving line of credit, maximum available (in Dollars) | 14,250,000 | 14,250,000 |
Revolving line of credit, issued on | 13-Feb-09 | 13-Feb-09 |
Interest at | 'Texas Capital Bank's "Base Rate" plus 1.00% with an "Adjusted Base Rate" of 5.00%, resulting in a rate of 5.00% | 'Texas Capital Bank's "Base Rate" plus 1.00% with an "Adjusted Base Rate" of 5.00%, resulting in a rate of 5.00% |
Revolving line of credit, payable (in Dollars) | 100,000 | 100,000 |
Revolving line of credit, commencing on | 1-Jan-12 | 1-Jan-12 |
Revolving line of credit, borrowing base (in Dollars) | 350,000 | 350,000 |
Revolving line of credit, letters of credit (in Dollars) | $750,000 | $750,000 |
Revolving line of credit, matured | 28-Feb-13 | 28-Feb-13 |
Interest Rate | 5.00% | 5.00% |
NOTE_5_LONGTERM_DEBT_Details_S2
NOTE 5 - LONG-TERM DEBT (Details) - Schedule of Maturities of Long-term Debt (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of Maturities of Long-term Debt [Abstract] | ' | ' |
2014 | $22,916 | ' |
2015 | 28,921 | ' |
2016 | 30,654 | ' |
2017 | 32,490 | ' |
2018 | 34,437 | ' |
Thereafter | 1,350,582 | ' |
Total | $1,500,000 | $2,258,668 |
NOTE_6_INCOME_TAXES_Details
NOTE 6 - INCOME TAXES (Details) (USD $) | Dec. 31, 2013 |
Income Tax Disclosure [Abstract] | ' |
Tax Credit Carryforward, Deferred Tax Asset | $1,800,000 |
Operating Loss Carryforwards | $10,400,000 |
NOTE_6_INCOME_TAXES_Details_Sc
NOTE 6 - INCOME TAXES (Details) - Schedule of Deferred Tax Assets and Liabilities (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Deferred Tax Assets (Liabilities): | ' | ' |
Statutory Depletion Carry Forward | $678,617 | $776,534 |
Net Operating Loss | 4,053,001 | 4,951,345 |
Other | 702,275 | 212,798 |
Share-Based Compensation | 55,990 | 58,558 |
Capital Loss / AMT Credit Carry Forward | 76,410 | 76,410 |
Charitable Contributions Carry Forward | 15,510 | 16,022 |
Allowance for Doubtful Accounts | 412,353 | 372,772 |
Oil and Gas Properties and Fixed Assets | 4,723,641 | 5,479,647 |
10,717,797 | 11,944,086 | |
Valuation Allowance | -10,717,797 | -11,944,086 |
Net Deferred Tax Asset | 0 | 0 |
Deferred Tax Assets: | ' | ' |
Current | 62,333 | 107,563 |
Non-current | -62,333 | -107,563 |
Deferred Tax Liabilities: | ' | ' |
Current | -1,775 | -1,775 |
Non-current | ' | ' |
Net Deferred Tax Asset | ' | ' |
NOTE_6_INCOME_TAXES_Details_Sc1
NOTE 6 - INCOME TAXES (Details) - Schedule of Effective Income Tax Rate Reconciliation (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule of Effective Income Tax Rate Reconciliation [Abstract] | ' | ' |
Tax (benefit) computed at statutory rate of 34% | $390,712 | ($1,530,950) |
Increase (decrease) in taxes resulting from: | ' | ' |
State tax / percentage depletion / other | 0 | 1,389,218 |
Other non-deductible expenses | 3,078 | 2,889 |
Change in valuation allowance | -393,790 | 9,326,664 |
Provision (benefit) | $0 | ($9,187,821) |
NOTE_6_INCOME_TAXES_Details_Sc2
NOTE 6 - INCOME TAXES (Details) - Schedule of Effective Income Tax Rate Reconciliation (Parentheticals) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule of Effective Income Tax Rate Reconciliation [Abstract] | ' | ' |
Statutory rate | 34.00% | 34.00% |
NOTE_6_INCOME_TAXES_Details_Sc3
NOTE 6 - INCOME TAXES (Details) - Schedule of Components of Income Tax Expense (Benefit) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule of Components of Income Tax Expense (Benefit) [Abstract] | ' | ' |
Current tax provision (benefit) b federal | $0 | $0 |
Current tax provision (benefit) b state | 0 | 1,790 |
Deferred tax provision (benefit) b federal | 0 | -7,623,800 |
Deferred tax provision (benefit) b state | 0 | -1,562,231 |
Total provision (benefit) | $0 | ($9,187,821) |
NOTE_7_SERIES_AA_PREFERRED_STO1
NOTE 7 - SERIES AA PREFERRED STOCK (Details) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
NOTE 7 - SERIES AA PREFERRED STOCK (Details) [Line Items] | ' | ' |
Preferred Stock, Shares Issued | 52,784 | 52,784 |
Preferred Stock, Shares Outstanding | 52,784 | 52,784 |
Series AA Preferred Stock [Member] | ' | ' |
NOTE 7 - SERIES AA PREFERRED STOCK (Details) [Line Items] | ' | ' |
Conversion of Stock, Shares Converted | 0 | 0 |
Preferred Stock, Shares Issued | 52,784 | 52,784 |
Preferred Stock, Shares Outstanding | 52,784 | 52,784 |
NOTE_8_COMMON_STOCK_Details
NOTE 8 - COMMON STOCK (Details) (USD $) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2009 | Dec. 31, 2009 | Dec. 31, 2009 | Dec. 31, 2009 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2009 | Dec. 31, 2008 | Dec. 31, 2012 | |
Warrants Exercised in March 2012 [Member] | Warrants Exercised during February and March 2012 [Member] | Series A Warrants [Member] | Series A Warrants [Member] | Series A-1 Warrants [Member] | Series B Warrants [Member] | Series C Warrants [Member] | Securities Purchase Agreement, C. K. Cooper & Company, Inc. [Member] | Securities Purchase Agreement, Cranshire Capital [Member] | Securities Purchase Agreement, Cranshire Capital [Member] | Securities Purchase Agreement, Cranshire Capital [Member] | Securities Purchase Agreement, Cranshire Capital [Member] | |||
Securities Purchase Agreement, Cranshire Capital [Member] | Securities Purchase Agreement, Cranshire Capital [Member] | Securities Purchase Agreement, Cranshire Capital [Member] | Securities Purchase Agreement, Cranshire Capital [Member] | Securities Purchase Agreement, Cranshire Capital [Member] | Securities Purchase Agreement, Cranshire Capital [Member] | Securities Purchase Agreement, Cranshire Capital [Member] | ||||||||
NOTE 8 - COMMON STOCK (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other Committment, Maximum Amount of Consideration (in Dollars) | ' | ' | ' | ' | ' | ' | ' | ' | ' | $10,000,000 | ' | ' | ' | ' |
Stock issuance, commission fee percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.50% | ' | ' | ' | ' |
Stock Issued During Period, Shares, New Issues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 552,764 | 547,945 | ' |
Stock Issued During Period, Value, New Issues (in Dollars) | 1,021,668 | 4,621,907 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,000,000 | ' |
Sale of Stock, Price Per Share (in Dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1.99 | $7.30 | ' |
Class of Warrant or Rights, Granted | ' | ' | ' | ' | ' | 329,850 | 1,808 | 511,628 | 306,977 | ' | ' | ' | 191,781 | ' |
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per Item) | ' | ' | ' | ' | ' | 2.19 | 2.19 | 2.15 | 2.19 | ' | ' | 1.99 | 7.3 | 1.99 |
Class of Warrant or Rights, Exercise Price, Description | ' | ' | ' | ' | ' | ' | ' | 'The exercise price of the Series B Warrants is also subject to increases if the market price of the common stock equals or exceeds $2.40, in which case the exercise price of such Series B warrant will be increased to 90% of the closing sale price of the common stock on the trading day immediately preceding the date of exercise thereof | ' | ' | ' | ' | 'The $7.30 per share price was negotiated as a 15% discount from the 10 day dollar volume weighted average price of the Company's Common Stock on the NASDAQ Global Market | ' |
Class of Warrant or Rights, Exercised | ' | ' | 71,918 | 67,160 | 329,850 | ' | ' | 511,628 | ' | ' | 321,443 | ' | ' | ' |
Proceeds from Warrant Exercises (in Dollars) | ' | ' | 143,117 | 185,999 | ' | ' | ' | 1,080,650 | ' | ' | 639,672 | ' | ' | ' |
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per Share) | ' | ' | ' | ' | ' | 2.19 | 2.19 | 2.15 | 2.19 | ' | ' | 1.99 | 7.3 | 1.99 |
Warrant Term | ' | ' | ' | ' | ' | '5 years | '5 years | '1 year | '5 years | ' | ' | ' | ' | ' |
Proceeds from Issuance of Warrants (in Dollars) | ' | ' | ' | ' | $722,372 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
NOTE_9_OPERATING_LEASES_Detail
NOTE 9 - OPERATING LEASES (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
NOTE 9 - OPERATING LEASES (Details) [Line Items] | ' | ' |
Description of Lessee Leasing Arrangements, Operating Leases | 'occupies office space through the use of two leases, one for their office in San Diego, CA and one for an office and yard in Woodland, CA | ' |
Operating Leases, Rent Expense | $361,020 | $370,750 |
Operating Lease, Office Space, San Diego [Member] | ' | ' |
NOTE 9 - OPERATING LEASES (Details) [Line Items] | ' | ' |
Description of Lessee Leasing Arrangements, Operating Leases | 'The San Diego lease is under a 120 month noncancellable lease contract, which expires in July 2015 | ' |
Operating Lease, Office Space, San Diego [Member] | Minimum [Member] | ' | ' |
NOTE 9 - OPERATING LEASES (Details) [Line Items] | ' | ' |
Operating Leases, Rent Expense, Minimum Rentals | 27,010 | ' |
Operating Lease, Office Space, San Diego [Member] | Maximum [Member] | ' | ' |
NOTE 9 - OPERATING LEASES (Details) [Line Items] | ' | ' |
Operating Leases, Rent Expense, Minimum Rentals | 35,271 | ' |
Operating Lease, Office Space, Woodland [Member] | ' | ' |
NOTE 9 - OPERATING LEASES (Details) [Line Items] | ' | ' |
Operating Leases, Rent Expense, Minimum Rentals | $900 | ' |
NOTE_9_OPERATING_LEASES_Detail1
NOTE 9 - OPERATING LEASES (Details) - Schedule of Future Minimum Rental Payments for Operating Leases (USD $) | Dec. 31, 2013 |
Schedule of Future Minimum Rental Payments for Operating Leases [Abstract] | ' |
2014 | $415,842 |
2015 | 246,900 |
Thereafter | 0 |
Total | $662,742 |
NOTE_10_RELATED_PARTY_TRANSACT1
NOTE 10 - RELATED PARTY TRANSACTIONS (Details) | Dec. 31, 2013 |
Donald H. Hosmer, co-president and co-chief executive officer [Member] | ' |
NOTE 10 - RELATED PARTY TRANSACTIONS (Details) [Line Items] | ' |
Equity Method Investment, Ownership Percentage | 6.24% |
Stephen M. Hosmer, co-president, co-chief executive officer and chief financial officer [Member] | ' |
NOTE 10 - RELATED PARTY TRANSACTIONS (Details) [Line Items] | ' |
Equity Method Investment, Ownership Percentage | 8.41% |
Harry E. Hosmer, former president and former chief executive officer [Member] | ' |
NOTE 10 - RELATED PARTY TRANSACTIONS (Details) [Line Items] | ' |
Equity Method Investment, Ownership Percentage | 4.32% |
NOTE_11_STOCK_BASED_COMPENSATI2
NOTE 11 - STOCK BASED COMPENSATION (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2010 | |
NOTE 11 - STOCK BASED COMPENSATION (Details) [Line Items] | ' | ' |
Share Price (in Dollars per share) | $2.59 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | '2 years | ' |
Employee Stock Option [Member] | Options granted to each director and executive officer [Member] | ' | ' |
NOTE 11 - STOCK BASED COMPENSATION (Details) [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares) | ' | 50,000 |
Employee Stock Option [Member] | ' | ' |
NOTE 11 - STOCK BASED COMPENSATION (Details) [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares) | ' | 400,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercise Price of Options (in Dollars per share) | ' | $3.25 |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | ' | 'vest in two parts; the first 200,000 options vested on January 1, 2012; the remaining 200,000 options vested on January 1, 2013 |
Share-base Compensation by Share-based Payment Award, Options, Term of Options | ' | '5 years |
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period | ' | '2 years |
Allocated Share-based Compensation Expense (in Dollars) | $39,260 | ' |
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense (in Dollars) | $38,652 | ' |
NOTE_11_STOCK_BASED_COMPENSATI3
NOTE 11 - STOCK BASED COMPENSATION (Details) - Schedule of Share-based Compensation, Stock Options, Activity (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Number of Options [Member] | ' | ' |
Options | ' | ' |
Outstanding at Beginning of Year (in Shares) | 346,308 | 675,000 |
Granted (in Shares) | 0 | 0 |
Exercised (in Shares) | 0 | -283,692 |
Expired or Ineligible (in Shares) | 0 | -45,000 |
Outstanding at End of Year (in Shares) | 346,308 | 346,308 |
Options Exercisable at Year End (in Shares) | 346,308 | 346,308 |
Weighted-average Fair Value of Options Granted During the Year | $0 | $0 |
Weighted-Average Exercise Price [Member] | ' | ' |
Options | ' | ' |
Outstanding at Beginning of Year | $3.25 | $3.36 |
Granted | $0 | $0 |
Exercised | $0 | $3.46 |
Expired or Ineligible | $0 | $3.50 |
Outstanding at End of Year | $3.25 | $3.25 |
Options Exercisable at Year End | $3.25 | $3.25 |
NOTE_11_STOCK_BASED_COMPENSATI4
NOTE 11 - STOCK BASED COMPENSATION (Details) - Schedule of Nonvested Restricted Stock Units Activity (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Restricted Stock Shares [Member] | ' | ' |
Non-vested Shares | ' | ' |
Non-vested at Beginning of Year | 0 | 31,670 |
Granted | 0 | 0 |
Reinstated | 0 | 0 |
Vested | 0 | 31,670 |
Expired or Ineligible | 0 | 0 |
Non-vested at End of Year | 0 | 0 |
Weighted-Average Grant-Date Fair Value [Member] | ' | ' |
Non-vested Shares | ' | ' |
Non-vested at Beginning of Year (in Dollars per share) | 3.31 | 3.31 |
Granted (in Dollars per share) | 0 | 0 |
Reinstated (in Dollars per share) | 0 | 0 |
Vested (in Dollars per share) | 0 | 3.31 |
Expired or Ineligible (in Dollars per share) | 0 | 0 |
Non-vested at End of Year (in Dollars per share) | 0 | 3.31 |
NOTE_12_SIMPLE_IRA_PLAN_Detail
NOTE 12 - SIMPLE IRA PLAN (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Compensation and Retirement Disclosure [Abstract] | ' | ' |
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent | 3.00% | 3.00% |
Defined Contribution Plan, Cost Recognized (in Dollars) | $49,846 | $57,405 |
NOTE_14_CONCENTRATIONS_OF_CRED1
NOTE 14 - CONCENTRATIONS OF CREDIT RISK (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 |
Customer Concentration Risk [Member] | |||
Sales Revenue, Net [Member] | |||
NOTE 14 - CONCENTRATIONS OF CREDIT RISK (Details) [Line Items] | ' | ' | ' |
Concentration Risk, Percentage | ' | ' | 80.00% |
Concentration Risk, Customer | ' | ' | 'one customer |
Cash, FDIC Insured Amount | $250,000 | $250,000 | ' |
Cash, Uninsured Amount | $4,300,000 | $1,200,000 | ' |
NOTE_16_RESTATEMENT_TO_REFLECT2
NOTE 16 - RESTATEMENT TO REFLECT CHANGE IN REVENUE RECOGNITION POLICY (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Accounting Changes and Error Corrections [Abstract] | ' | ' | ' |
Impairment of Oil and Gas Properties | $70,203 | $145,461 | $4,456,933 |
NOTE_16_RESTATEMENT_TO_REFLECT3
NOTE 16 - RESTATEMENT TO REFLECT CHANGE IN REVENUE RECOGNITION POLICY (Details) - Schedule of Error Corrections and Prior Period Adjustments (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |
ASSETS: | ' | ' | ' | ' |
Oil and Gas Properties (Successful Efforts Basis) and Equipment and Fixtures | $7,237,382 | $6,522,186 | ' | ' |
Total Assets | 14,815,692 | 13,069,724 | ' | ' |
LIABILITIES AND STOCKHOLDERSb EQUITY (DEFICIT): | ' | ' | ' | ' |
Accumulated Deficit | 37,471,388 | 38,620,541 | ' | ' |
Total Stockholderbs Equity (Deficit) | 993,292 | -3,771,018 | 3,977,980 | 6,682,001 |
Total Liabilities and Stockholderbs Equity (Deficit) | 14,815,692 | 13,069,724 | ' | ' |
REVENUES: | ' | ' | ' | ' |
Total Revenues | 2,573,061 | 2,365,882 | ' | ' |
COSTS AND EXPENSES | ' | ' | ' | ' |
Lease Impairment | 70,203 | 145,461 | ' | ' |
Depreciation, Depletion and Amortization | 309,806 | 664,131 | ' | ' |
Total Costs and Expenses | 5,948,485 | 7,452,277 | ' | ' |
Gain on Turnkey Drilling Programs | 2,008,734 | 763,461 | ' | ' |
Income From Operations | 1,453,625 | -4,314,834 | ' | ' |
Income (Loss) Before Income Tax Expense | 1,149,153 | -4,502,795 | ' | ' |
Income Tax Provision | 0 | 9,187,821 | ' | ' |
Net Income (Loss) | 1,149,153 | -13,690,616 | ' | ' |
Comprehensive Income (Loss) | 1,159,098 | -13,693,651 | ' | ' |
Scenario, Previously Reported [Member] | ' | ' | ' | ' |
ASSETS: | ' | ' | ' | ' |
Oil and Gas Properties (Successful Efforts Basis) and Equipment and Fixtures | ' | 10,955,797 | ' | ' |
Total Assets | ' | 17,503,335 | ' | ' |
LIABILITIES AND STOCKHOLDERSb EQUITY (DEFICIT): | ' | ' | ' | ' |
Accumulated Deficit | ' | -34,186,930 | ' | ' |
Total Stockholderbs Equity (Deficit) | ' | 662,593 | ' | ' |
Total Liabilities and Stockholderbs Equity (Deficit) | ' | 17,503,335 | ' | ' |
REVENUES: | ' | ' | ' | ' |
Turnkey Drilling | ' | 2,028,863 | ' | ' |
Total Revenues | ' | 4,394,745 | ' | ' |
COSTS AND EXPENSES | ' | ' | ' | ' |
Turnkey Drilling and Development | ' | 449,536 | ' | ' |
Lease Impairment | ' | 200,778 | ' | ' |
Depreciation, Depletion and Amortization | ' | 1,448,002 | ' | ' |
Total Costs and Expenses | ' | 8,741,001 | ' | ' |
Gain on Turnkey Drilling Programs | ' | 0 | ' | ' |
Income From Operations | ' | -4,338,156 | ' | ' |
Income (Loss) Before Income Tax Expense | ' | -4,526,117 | ' | ' |
Income Tax Provision | ' | 7,434,909 | ' | ' |
Net Income (Loss) | ' | -11,961,026 | ' | ' |
Comprehensive Income (Loss) | ' | -11,964,061 | ' | ' |
Basic Loss Per Share (in Dollars per share) | ' | ($1.07) | ' | ' |
Scenario, Adjustment [Member] | ' | ' | ' | ' |
ASSETS: | ' | ' | ' | ' |
Oil and Gas Properties (Successful Efforts Basis) and Equipment and Fixtures | ' | -4,433,611 | ' | ' |
Total Assets | ' | -4,433,611 | ' | ' |
LIABILITIES AND STOCKHOLDERSb EQUITY (DEFICIT): | ' | ' | ' | ' |
Accumulated Deficit | ' | -4,433,611 | ' | ' |
Total Stockholderbs Equity (Deficit) | ' | -4,433,611 | ' | ' |
Total Liabilities and Stockholderbs Equity (Deficit) | ' | -4,433,611 | ' | ' |
REVENUES: | ' | ' | ' | ' |
Turnkey Drilling | ' | -2,028,863 | ' | ' |
Total Revenues | ' | -2,028,863 | ' | ' |
COSTS AND EXPENSES | ' | ' | ' | ' |
Turnkey Drilling and Development | ' | -449,536 | ' | ' |
Lease Impairment | ' | -55,317 | ' | ' |
Depreciation, Depletion and Amortization | ' | -783,871 | ' | ' |
Total Costs and Expenses | ' | -1,288,724 | ' | ' |
Gain on Turnkey Drilling Programs | ' | 763,461 | ' | ' |
Income From Operations | ' | 23,322 | ' | ' |
Income (Loss) Before Income Tax Expense | ' | 23,322 | ' | ' |
Income Tax Provision | ' | 1,752,912 | ' | ' |
Net Income (Loss) | ' | -1,729,590 | ' | ' |
Comprehensive Income (Loss) | ' | -1,729,590 | ' | ' |
Basic Loss Per Share (in Dollars per share) | ' | ($0.16) | ' | ' |
Scenario, Actual [Member] | ' | ' | ' | ' |
ASSETS: | ' | ' | ' | ' |
Oil and Gas Properties (Successful Efforts Basis) and Equipment and Fixtures | ' | 6,522,186 | ' | ' |
Total Assets | ' | 13,069,724 | ' | ' |
LIABILITIES AND STOCKHOLDERSb EQUITY (DEFICIT): | ' | ' | ' | ' |
Accumulated Deficit | ' | -38,620,541 | ' | ' |
Total Stockholderbs Equity (Deficit) | ' | -3,771,018 | ' | ' |
Total Liabilities and Stockholderbs Equity (Deficit) | ' | 13,069,724 | ' | ' |
REVENUES: | ' | ' | ' | ' |
Turnkey Drilling | ' | 0 | ' | ' |
Total Revenues | ' | 2,365,882 | ' | ' |
COSTS AND EXPENSES | ' | ' | ' | ' |
Turnkey Drilling and Development | ' | 0 | ' | ' |
Lease Impairment | ' | 145,461 | ' | ' |
Depreciation, Depletion and Amortization | ' | 664,131 | ' | ' |
Total Costs and Expenses | ' | 7,452,277 | ' | ' |
Gain on Turnkey Drilling Programs | ' | 763,461 | ' | ' |
Income From Operations | ' | -4,314,834 | ' | ' |
Income (Loss) Before Income Tax Expense | ' | -4,502,795 | ' | ' |
Income Tax Provision | ' | 9,187,820 | ' | ' |
Net Income (Loss) | ' | -13,690,616 | ' | ' |
Comprehensive Income (Loss) | ' | ($13,693,651) | ' | ' |
Basic Loss Per Share (in Dollars per share) | ' | ($1.23) | ' | ' |