Royale Energy Funds 10-Q 1 Aug 14 2014 Q2 Quarterly report Financial data

Document_And_Entity_Informatio

Document And Entity Information	6 Months Ended
	Jun. 30, 2014
Document and Entity Information [Abstract]	'
Entity Registrant Name	'ROYALE ENERGY INC
Document Type	'10-Q
Current Fiscal Year End Date	'--12-31
Entity Common Stock, Shares Outstanding	14,942,728
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	30-Jun-14
Document Fiscal Year Focus	'2014
Document Fiscal Period Focus	'Q2

BALANCE_SHEETS

BALANCE SHEETS (USD $)	Jun. 30, 2014	Dec. 31, 2013
Current Assets	'	'
Cash and Cash Equivalents	$2,967,509	$4,878,233
Accounts Receivable, net	2,521,208	1,680,792
Prepaid Expenses	580,019	684,848
Available for Sale Securities	16,448	16,448
Inventory	320,473	317,043
Total Current Assets	6,405,657	7,577,364
Other Assets	946	946
Oil and Gas Properties, at cost, (successful efforts basis), Equipment and Fixtures	7,616,046	7,237,382
Total Assets	14,022,649	14,815,692
Current Liabilities:	'	'
Accounts Payable and Accrued Expenses	5,625,338	5,332,323
Current Portion of Long-Term Debt	28,196	22,916
Current Portion of Deferred Tax Liability	1,775	1,775
Deferred Drilling Obligations	5,606,951	6,125,933
Total Current Liabilities	11,262,260	11,482,947
Noncurrent Liabilities:	'	'
Asset Retirement Obligation	835,346	862,369
Note Payable	1,461,462	1,477,084
Total Noncurrent Liabilities	2,296,808	2,339,453
Total Liabilities	13,559,068	13,822,400
Stockholders' Equity:	'	'
Common Stock, no par value, authorized 20,000,000 shares, 14,942,728 shares outstanding.	37,996,866	37,996,866
Convertible preferred stock, Series AA, no par value, 147,500 shares authorized; 52,784 outstanding	154,014	154,014
Accumulated (Deficit)	-38,001,099	-37,471,388
Paid in Capital	303,855	303,855
Accumulated Other Comprehensive Income	9,945	9,945
Total Stockholders' Equity	463,581	993,292
Total Liabilities and Stockholders' Equity	$14,022,649	$14,815,692

BALANCE_SHEETS_Parentheticals

BALANCE SHEETS (Parentheticals) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Common stock, no par value (in Dollars per share)	'	'
Common stock, shares authorized	20,000,000	20,000,000
Common Stock, shares outstanding	14,942,728	14,942,728
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 outstanding	52,784	52,784

STATEMENTS_OF_COMPREHENSIVE_IN

STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Revenues:	'	'	'	'
Sale of Oil and Gas	$744,410	$457,101	$1,569,966	$787,996
Supervisory Fees and Other	174,429	184,267	327,904	325,038
Total Revenues	918,839	641,368	1,897,870	1,113,034
Costs and Expenses:	'	'	'	'
General and Administrative	587,070	696,201	1,422,131	1,556,214
Lease Operating	267,826	239,928	721,362	507,137
Delay Rentals	12,298	1,200	31,792	26,813
Legal and Accounting	49,751	80,833	268,403	252,464
Marketing	35,122	65,095	130,318	102,721
Depreciation, Depletion and Amortization	88,309	63,030	178,135	126,311
Total Costs and Expenses	1,040,376	1,146,287	2,752,141	2,571,660
Gain on Turnkey Drilling Programs	415,487	321,831	396,454	241,932
Gain (Loss) on Sale of Assets	-34,601	2,294,920	-34,601	2,294,920
Income (Loss) From Operations	259,349	2,111,832	-492,418	1,078,226
Other Income (Expense):	'	'	'	'
Interest Expense	-21,955	-102,499	-37,293	-303,367
Income (Loss) Before Income Tax Expense (Benefit)	237,394	2,009,333	-529,711	774,859
Net Income (Loss)	237,394	2,009,333	-529,711	774,859
Basic Earnings (Loss) Per Share (in Dollars per share)	$0.02	$0.15	($0.04)	$0.06
Diluted Earnings (Loss) Per Share (in Dollars per share)	$0.02	$0.15	($0.04)	$0.06
Other Comprehensive Income	'	'	'	'
Unrealized Gain on Equity Securities	0	0	0	0
Other Comprehensive Income, before tax	0	0	0	0
Income Tax Expense Related to Items of Other Comprehensive Income	0	0	0	0
Other Comprehensive Income, net of tax	0	0	0	0
Comprehensive Income (Loss)	$237,394	$2,009,333	($529,711)	$774,859

STATEMENTS_OF_CASH_FLOWS_Unaud

STATEMENTS OF CASH FLOWS (Unaudited) (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES	'	'
Net Income (Loss)	($529,711)	$774,859
Adjustments to Reconcile Net Income (Loss) to Net Cash Used in Operating Activities:	'	'
Depreciation, Depletion and Amortization	178,135	126,311
(Gain) Loss on Sale of Assets	34,601	-2,294,920
(Gain) on Turnkey Drilling Programs	-396,454	-241,932
Debt Discount Amortization, net of adjustments	0	280,583
Decrease (Increase) in:	'	'
Accounts Receivable	-840,416	426,047
Prepaid Expenses and Other Assets	101,399	-119,584
Increase (Decrease) in:	'	'
Accounts Payable and Accrued expenses	265,992	-452,057
Deferred Drilling Obligations	-518,982	-118,118
Net Cash Used in Operating Activities	-1,705,436	-1,618,811
CASH FLOWS FROM INVESTING ACTIVITIES	'	'
Expenditures for Oil and Gas Properties and Other Capital Expenditures	-2,495,777	-1,156,458
Proceeds from Turnkey Drilling Programs	2,300,831	893,667
Proceeds from Sale of Assets	0	3,413,155
Net Cash Provided (Used) by Investing Activities	-194,946	3,150,364
CASH FLOWS FROM FINANCING ACTIVITIES	'	'
Principal Payments on Long-Term Debt	-10,342	-1,183,333
Proceeds from Stock Option and Warrant Exercises	0	639,671
Proceeds from Sale of Common Stock	0	1,021,668
Net Cash Provided (Used) by Financing Activities	-10,342	478,006
Net Increase (Decrease) in Cash and Cash Equivalents	-1,910,724	2,009,559
Cash at Beginning of Year	4,878,233	1,489,930
Cash at End of Period	2,967,509	3,499,489
Cash Paid for Interest	37,293	22,785
Cash Paid for Taxes	1,900	800
Non-Cash Investing and Financing Transactions	'	'
Conversion of Debt to Common Stock	$0	$954,547

NOTE_1

NOTE 1	6 Months Ended
	Jun. 30, 2014
Disclosure Text Block [Abstract]	'
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]	'
	NOTE 1 – In the opinion of management, the accompanying unaudited financial statements include all adjustments, consisting only of normally recurring adjustments, necessary to present fairly the Company’s financial position and the results of its operations and cash flows for the periods presented.  The results of operations for the six month period are not, in management’s opinion, indicative of the results to be expected for a full year of operations.  It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto included in the Company’s latest annual report.

NOTE_2_EARNINGS_LOSS_PER_SHARE

NOTE 2 - EARNINGS (LOSS) PER SHARE	6 Months Ended
	Jun. 30, 2014
Earnings Per Share [Abstract]	'
Earnings Per Share [Text Block]	'
	NOTE 2 – EARNINGS (LOSS) PER SHARE
	Basic and diluted earnings (loss) per share are calculated as follows:
		Three Months Ended June 30,
		2014						2013
		Basic			Diluted			Basic		Diluted
	Net Income	$	237,394		$	237,394		$	2,009,333	$	2,009,333
	Weighted average common shares outstanding		14,942,728			14,942,728			13,211,602		13,211,602
	Effect of dilutive securities		--			167,477			--		77,201
	Weighted average common shares, including
	Dilutive effect		14,942,728			15,110,205			13,211,602		13,288,803
	Per share:
	Net income	$	0.02		$	0.02		$	0.15	$	0.15
		Six Months Ended June 30,
		2014						2013
		Basic			Diluted			Basic		Diluted
	Net Income (Loss)	$	(529,711	)	$	(529,711	)	$	774,859	$	774,859
	Weighted average common shares outstanding		14,942,728			14,942,728			13,211,602		13,211,602
	Effect of dilutive securities		--			157,472			--		70,097
	Weighted average common shares, including
	Dilutive effect		14,942,728			15,100,200			13,211,602		13,281,699
	Per share:
	Net income	$	(0.04	)	$	(0.04	)	$	0.06	$	0.06
	For the six months ended June 30, 2014, Royale Energy had dilutive securities of 157,472.  These securities were not included in the dilutive loss per share due to their antidilutive nature.

NOTE_3_OIL_AND_GAS_PROPERTIES_

NOTE 3 - OIL AND GAS PROPERTIES, EQUIPMENT AND FIXTURES	6 Months Ended
	Jun. 30, 2014
Oil and Gas Exploration and Production Industries Disclosures [Abstract]	'
Oil and Gas Exploration and Production Industries Disclosures [Text Block]	'
	NOTE 3 – OIL AND GAS PROPERTIES, EQUIPMENT AND FIXTURES
	Oil and gas properties, equipment and fixtures consist of the following:
		June 30, 2014			31-Dec-13
		(Unaudited)			(Audited)
	Oil and Gas
	Producing properties, including drilling costs	$	5,356,543		$	4,862,657
	Undeveloped properties		2,770,482			2,779,672
	Lease and well equipment		4,178,242			4,075,320
			12,305,267			11,717,649
	Accumulated depletion, depreciation & amortization		(7,190,812	)		(7,065,362	)
			5,114,455			4,652,287
	Commercial and Other
	Real estate, including furniture and fixtures	$	2,503,803		$	2,503,803
	Vehicles		120,314			120,314
	Furniture and equipment		1,055,187			1,300,523
			3,679,304			3,924,640
	Accumulated depreciation		(1,177,713	)		(1,339,545	)
			2,501,591			2,585,095
		$	7,616,046		$	7,237,382
	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 the periods in 2014 or 2013.

NOTE_4_RESTATEMENT_TO_REFLECT_

NOTE 4 - RESTATEMENT TO REFLECT CHANGE IN REVENUE RECOGNITION POLICY	6 Months Ended
	Jun. 30, 2014
Accounting Changes and Error Corrections [Abstract]	'
Accounting Changes and Error Corrections [Text Block]	'
	NOTE 4 – RESTATEMENT TO REFLECT CHANGE IN REVENUE RECOGNITION POLICY
	The Company has restated its previously issued 2013 financial statements for the correction of an error in the method of revenue recognition.  The effect on the Company’s issued June 30, 2013 financial statements is summarized below:
		As Previously
		Reported		As Restated
	Statement of  Operations for the period ended June 30, 2013:
	Revenues:
	Turnkey Drilling		893,667		0
	Total Revenues		2,006,701		1,113,034
	Costs and Expenses:
	Turnkey Drilling and Development Expense		541,843		0
	Lease Operating Expense		533,950		507,137
	Delay Rentals Expense		0		26,813
	Depreciation, Depletion and Amortization Expense		461,264		126,311
	Total Costs and Expenses		3,448,456		2,571,660
	Net Income		549,798		774,859

NOTE_5_SUBSEQUENT_EVENTS

NOTE 5 - SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2014
Subsequent Events [Abstract]	'
Subsequent Events [Text Block]	'
	NOTE 5 – SUBSEQUENT EVENTS
	On July 29, 2014, Royale Energy, Inc. notified Kuukpik Drill that Royale was terminating its contract for drilling two wells on Royale’s block on the North Slope in Alaska, during the 2014-2015 drilling season.  Royale elected to terminate the contract after Rampart Energy, Ltd., notified Royale that Rampart would not fund the initial payment due to Kuupik Drill under the drilling contract.  The decision was made to avoid incurring penalty fees that would have become due to Kuupik Drill for failure to make timely payment.  Royale believes that the drilling contract could be reinstated for the 2014-2015 season if new arrangements can be made to fund the drilling commitment.

NOTE_2_EARNINGS_LOSS_PER_SHARE1

NOTE 2 - EARNINGS (LOSS) PER SHARE (Tables)	6 Months Ended
	Jun. 30, 2014
Earnings Per Share [Abstract]	'
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]	'Basic and diluted earnings (loss) per share are calculated as follows:
		Three Months Ended June 30,
		2014						2013
		Basic			Diluted			Basic		Diluted
	Net Income	$	237,394		$	237,394		$	2,009,333	$	2,009,333
	Weighted average common shares outstanding		14,942,728			14,942,728			13,211,602		13,211,602
	Effect of dilutive securities		--			167,477			--		77,201
	Weighted average common shares, including
	Dilutive effect		14,942,728			15,110,205			13,211,602		13,288,803
	Per share:
	Net income	$	0.02		$	0.02		$	0.15	$	0.15
		Six Months Ended June 30,
		2014						2013
		Basic			Diluted			Basic		Diluted
	Net Income (Loss)	$	(529,711	)	$	(529,711	)	$	774,859	$	774,859
	Weighted average common shares outstanding		14,942,728			14,942,728			13,211,602		13,211,602
	Effect of dilutive securities		--			157,472			--		70,097
	Weighted average common shares, including
	Dilutive effect		14,942,728			15,100,200			13,211,602		13,281,699
	Per share:
	Net income	$	(0.04	)	$	(0.04	)	$	0.06	$	0.06

NOTE_3_OIL_AND_GAS_PROPERTIES_1

NOTE 3 - OIL AND GAS PROPERTIES, EQUIPMENT AND FIXTURES (Tables)	6 Months Ended
	Jun. 30, 2014
Oil and Gas Exploration and Production Industries Disclosures [Abstract]	'
Property, Plant and Equipment [Table Text Block]	'Oil and gas properties, equipment and fixtures consist of the following:
		June 30, 2014			31-Dec-13
		(Unaudited)			(Audited)
	Oil and Gas
	Producing properties, including drilling costs	$	5,356,543		$	4,862,657
	Undeveloped properties		2,770,482			2,779,672
	Lease and well equipment		4,178,242			4,075,320
			12,305,267			11,717,649
	Accumulated depletion, depreciation & amortization		(7,190,812	)		(7,065,362	)
			5,114,455			4,652,287
	Commercial and Other
	Real estate, including furniture and fixtures	$	2,503,803		$	2,503,803
	Vehicles		120,314			120,314
	Furniture and equipment		1,055,187			1,300,523
			3,679,304			3,924,640
	Accumulated depreciation		(1,177,713	)		(1,339,545	)
			2,501,591			2,585,095
		$	7,616,046		$	7,237,382

NOTE_4_RESTATEMENT_TO_REFLECT_1

NOTE 4 - RESTATEMENT TO REFLECT CHANGE IN REVENUE RECOGNITION POLICY (Tables)	6 Months Ended
	Jun. 30, 2014
Accounting Changes and Error Corrections [Abstract]	'
Schedule of Error Corrections and Prior Period Adjustments [Table Text Block]	'The Company has restated its previously issued 2013 financial statements for the correction of an error in the method of revenue recognition. The effect on the Company’s issued June 30, 2013 financial statements is summarized below:
		As Previously
		Reported		As Restated
	Statement of  Operations for the period ended June 30, 2013:
	Revenues:
	Turnkey Drilling		893,667		0
	Total Revenues		2,006,701		1,113,034
	Costs and Expenses:
	Turnkey Drilling and Development Expense		541,843		0
	Lease Operating Expense		533,950		507,137
	Delay Rentals Expense		0		26,813
	Depreciation, Depletion and Amortization Expense		461,264		126,311
	Total Costs and Expenses		3,448,456		2,571,660
	Net Income		549,798		774,859

NOTE_2_EARNINGS_LOSS_PER_SHARE2

NOTE 2 - EARNINGS (LOSS) PER SHARE (Details)	6 Months Ended
	Jun. 30, 2014
Earnings Per Share [Abstract]	'
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	157,472

NOTE_2_EARNINGS_LOSS_PER_SHARE3

NOTE 2 - EARNINGS (LOSS) PER SHARE (Details) - Schedule of Earnings Per Share, Basic and Diluted (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Per share:	'	'	'	'
Net income (in Dollars per share)	$0.02	$0.15	($0.04)	$0.06
Net income (in Dollars per share)	$0.02	$0.15	($0.04)	$0.06
EPS, Basic [Member]	'	'	'	'
NOTE 2 - EARNINGS (LOSS) PER SHARE (Details) - Schedule of Earnings Per Share, Basic and Diluted [Line Items]	'	'	'	'
Net Income (in Dollars)	$237,394	$2,009,333	($529,711)	$774,859
Weighted average common shares outstanding	14,942,728	13,211,602	14,942,728	13,211,602
Weighted average common shares outstanding	14,942,728	13,211,602	14,942,728	13,211,602
Weighted average common shares, including	'	'	'	'
Dilutive effect	14,942,728	13,211,602	14,942,728	13,211,602
Per share:	'	'	'	'
Net income (in Dollars per share)	$0.02	$0.15	($0.04)	$0.06
EPS, Diluted [Member]	'	'	'	'
NOTE 2 - EARNINGS (LOSS) PER SHARE (Details) - Schedule of Earnings Per Share, Basic and Diluted [Line Items]	'	'	'	'
Net Income (in Dollars)	$237,394	$2,009,333	($529,711)	$774,859
Weighted average common shares outstanding	14,942,728	13,211,602	14,942,728	13,211,602
Weighted average common shares outstanding	14,942,728	13,211,602	14,942,728	13,211,602
Effect of dilutive securities	167,477	77,201	157,472	70,097
Weighted average common shares, including	'	'	'	'
Dilutive effect	14,942,728	13,211,602	14,942,728	13,211,602
Dilutive effect	15,110,205	13,288,803	15,100,200	13,281,699
Per share:	'	'	'	'
Net income (in Dollars per share)	$0.02	$0.15	($0.04)	$0.06

NOTE_3_OIL_AND_GAS_PROPERTIES_2

NOTE 3 - OIL AND GAS PROPERTIES, EQUIPMENT AND FIXTURES (Details) - Schedule of Property, Plant and Equipment (USD $)	Jun. 30, 2014	Dec. 31, 2013
Oil and Gas	'	'
Producing properties, including drilling costs	$5,356,543	$4,862,657
Undeveloped properties	2,770,482	2,779,672
Lease and well equipment	4,178,242	4,075,320
	12,305,267	11,717,649
Accumulated depletion, depreciation & amortization	-7,190,812	-7,065,362
	5,114,455	4,652,287
Commercial and Other Property and Equipment, Gross	3,679,304	3,924,640
Accumulated depreciation	-1,177,713	-1,339,545
	2,501,591	2,585,095
	7,616,046	7,237,382
Real Estate, Including Furniture and Fixtures [Member]	'	'
Oil and Gas	'	'
Commercial and Other Property and Equipment, Gross	2,503,803	2,503,803
Vehicles [Member]	'	'
Oil and Gas	'	'
Commercial and Other Property and Equipment, Gross	120,314	120,314
Furniture and Fixtures [Member]	'	'
Oil and Gas	'	'
Commercial and Other Property and Equipment, Gross	$1,055,187	$1,300,523

NOTE_4_RESTATEMENT_TO_REFLECT_2

NOTE 4 - RESTATEMENT TO REFLECT CHANGE IN REVENUE RECOGNITION POLICY (Details) - Schedule of Error Corrections and Prior Period Adjustments (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Revenues:	'	'	'	'
Total Revenues	$918,839	$641,368	$1,897,870	$1,113,034
Costs and Expenses:	'	'	'	'
Lease Operating Expense	267,826	239,928	721,362	507,137
Delay Rentals Expense	12,298	1,200	31,792	26,813
Depreciation, Depletion and Amortization Expense	88,309	63,030	178,135	126,311
Total Costs and Expenses	1,040,376	1,146,287	2,752,141	2,571,660
Net Income	237,394	2,009,333	-529,711	774,859
Scenario, Previously Reported [Member]	'	'	'	'
Revenues:	'	'	'	'
Turnkey Drilling	'	'	'	893,667
Total Revenues	'	'	'	2,006,701
Costs and Expenses:	'	'	'	'
Turnkey Drilling and Development Expense	'	'	'	541,843
Lease Operating Expense	'	'	'	533,950
Delay Rentals Expense	'	'	'	0
Depreciation, Depletion and Amortization Expense	'	'	'	461,264
Total Costs and Expenses	'	'	'	3,448,456
Net Income	'	'	'	549,798
Scenario, Adjustment [Member]	'	'	'	'
Revenues:	'	'	'	'
Turnkey Drilling	'	'	'	0
Total Revenues	'	'	'	1,113,034
Costs and Expenses:	'	'	'	'
Turnkey Drilling and Development Expense	'	'	'	0
Lease Operating Expense	'	'	'	507,137
Delay Rentals Expense	'	'	'	26,813
Depreciation, Depletion and Amortization Expense	'	'	'	126,311
Total Costs and Expenses	'	'	'	2,571,660
Net Income	'	'	'	$774,859

NOTE_5_SUBSEQUENT_EVENTS_Detai

NOTE 5 - SUBSEQUENT EVENTS (Details) (Subsequent Event [Member])	0 Months Ended
	Jul. 29, 2014
Subsequent Event [Member]	'
NOTE 5 - SUBSEQUENT EVENTS (Details) [Line Items]	'
Subsequent Event, Description	'terminating its contract for drilling two wells on Royale's block on the North Slope in Alaska, during the 2014-2015 drilling season