Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 06, 2015 | Jun. 30, 2014 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | ROYALE ENERGY INC | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | -19 | ||
Entity Common Stock, Shares Outstanding | 14,945,789 | ||
Entity Public Float | $42,785,383 | ||
Amendment Flag | FALSE | ||
Entity Central Index Key | 864839 | ||
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-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY |
BALANCE_SHEETS
BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Current Assets | ||
Cash and Cash Equivalents | $3,061,841 | $4,878,233 |
Other Receivables, net | 1,760,181 | 1,152,473 |
Revenue Receivables | 493,295 | 528,319 |
Prepaid Expenses | 158,404 | 191,202 |
Available for Sale Securities | 0 | 16,448 |
Total Current Assets | 5,473,721 | 6,766,675 |
Other Assets | 510,821 | 494,592 |
Oil And Gas Properties (Successful Efforts Basis), Real Property and Equipment and Fixtures, net | 7,594,666 | 7,554,425 |
Total Assets | 13,579,208 | 14,815,692 |
Current Liabilities: | ||
Accounts Payable and Accrued Expenses | 4,502,559 | 5,332,323 |
Current Portion of Long-Term Debt | 29,031 | 22,916 |
Current Portion of Deferred Tax Liability | 0 | 1,775 |
Deferred Drilling Obligations | 7,937,786 | 6,125,933 |
Total Current Liabilities | 12,469,376 | 11,482,947 |
Noncurrent Liabilities: | ||
Asset Retirement Obligation | 804,206 | 862,369 |
Note Payable, less current portion | 1,446,853 | 1,477,084 |
Total Noncurrent Liabilities | 2,251,059 | 2,339,453 |
Total Liabilities | 14,720,435 | 13,822,400 |
Stockholders' Equity (Deficit) | ||
Convertible Preferred Stock, Series AA, No Par Value, 147,500 Shares Authorized; 46,662 and 52,784 Shares Issued and Outstanding, at December 31, 2014 and 2013 Respectively | 136,149 | 154,014 |
Common Stock, No Par Value, 20,000,000 Shares Authorized; 14,945,789 and 14,942,728 Shares Issued and Outstanding, at December 31, 2014 and 2013 respectively | 38,014,730 | 37,996,866 |
Paid in Capital | 337,640 | 303,855 |
Accumulated (Deficit) | -39,623,243 | -37,471,388 |
Accumulated Other Comprehensive Income (Loss) | -6,503 | 9,945 |
Total Stockholders' Equity (Deficit) | -1,141,227 | 993,292 |
Total Liabilities and Stockholders' Equity (Deficit) | $13,579,208 | $14,815,692 |
BALANCE_SHEETS_Parentheticals
BALANCE SHEETS (Parentheticals) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
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 | 46,662 | 52,784 |
Convertible preferred stock, Series AA, shares outstanding | 46,662 | 52,784 |
Common stock, no par value (in Dollars per share) | ||
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 14,945,789 | 14,942,728 |
Common Stock, shares outstanding | 14,945,789 | 14,942,728 |
STATEMENTS_OF_COMPREHENSIVE_IN
STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues: | ||
Sale of Oil and Gas | $2,598,297 | $1,913,364 |
Supervisory Fees and Other | 623,201 | 659,697 |
Total Revenues | 3,221,498 | 2,573,061 |
Costs and Expenses: | ||
General and Administrative | 3,162,113 | 3,279,505 |
Lease Operating | 1,427,673 | 936,631 |
Delay Rentals | 616,806 | 457,554 |
Lease Impairment | 268,093 | 70,203 |
Geological and Geophysical | 0 | 50,145 |
Inventory Write Down | 0 | 39,185 |
Bad Debt Expense | 653,133 | 146,704 |
Legal and Accounting | 401,160 | 326,270 |
Marketing | 430,779 | 332,482 |
Depreciation, Depletion and Amortization | 315,574 | 309,806 |
Total Costs and Expenses | 7,275,331 | 5,948,485 |
Gain on Turnkey Drilling Programs | 1,640,731 | 2,008,734 |
Gain on Sale of Assets | 342,851 | 2,820,315 |
Income (Loss) from Operations | -2,070,251 | 1,453,625 |
Other Income (Expense): | ||
Interest Expense | -81,605 | -304,472 |
Income Before Income Tax Expense | -2,151,856 | 1,149,153 |
Net Income (Loss) | -2,151,856 | 1,149,153 |
Basic Earnings (Loss) Per Share: (in Dollars per share) | ($0.14) | $0.08 |
Diluted Earnings (Loss) Per Share (in Dollars per share) | ($0.14) | $0.08 |
Other Comprehensive Income (Loss) | ||
Unrealized Gain on Equity Securities | -16,448 | 9,945 |
Less: Reclassification Adjustment for Gains Included in Net Income | 0 | 0 |
Other Comprehensive Income (Loss) , before tax | -16,448 | 9,945 |
Other Comprehensive Income (Loss), net of tax | -16,448 | 9,945 |
Comprehensive Income (Loss) | ($2,168,304) | $1,159,098 |
STATEMENTS_OF_STOCKHOLDERS_EQU
STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Common Stock [Member] | Series A Preferred Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Balance at Dec. 31, 2012 | $33,247,571 | $154,014 | $1,447,938 | ($38,620,540) | $0 | ($3,771,017) |
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 Sale | 1,021,668 | 1,021,668 | ||||
Common Stock Private Placement Sale (in Shares) | 500,000 | |||||
Conversion of Convertible Securities | 2,500,000 | -1,144,083 | 1,355,917 | |||
Conversion of Convertible Securities (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 | 37,996,865 | 154,014 | 303,855 | -37,471,387 | 9,945 | 993,292 |
Balance (in Shares) at Dec. 31, 2013 | 14,942,728 | 52,784 | ||||
Conversion of Convertible Securities | 17,865 | -17,865 | 0 | |||
Conversion of Convertible Securities (in Shares) | 3,061 | -6,122 | ||||
Director's Stock Options Grant | 33,785 | 33,785 | ||||
Available for Sale Securities – Unrealized Gain (Loss), net of tax | -16,448 | -16,448 | ||||
Net Income (Loss) | -2,151,856 | -2,151,856 | ||||
Balance at Dec. 31, 2014 | $38,014,730 | $136,149 | $337,640 | ($39,623,243) | ($6,503) | ($1,141,227) |
Balance (in Shares) at Dec. 31, 2014 | 14,945,789 | 46,662 |
STATEMENTS_OF_CASH_FLOWS
STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Income (Loss) | ($2,151,856) | $1,149,153 |
Adjustments to Reconcile Net Income (Loss) to Net Cash Used by Operating Activities: | ||
Depreciation, Depletion, and Amortization | 315,574 | 309,806 |
Lease Impairment | 268,093 | 70,203 |
Gain on Sale of Assets | -342,851 | -2,820,315 |
Gain on Turnkey Drilling Programs | -1,640,731 | -2,008,734 |
Bad Debt Expense | 653,133 | 146,704 |
Stock-Based Compensation | 33,785 | 0 |
Debt Discount Amortization | 0 | 280,582 |
Inventory and Other Assets Write Down | 0 | 39,185 |
(Increase) Decrease in: | ||
Other & Revenue Receivables | -1,225,817 | 2,141,664 |
Prepaid Expenses and Other Assets | 16,569 | 40,426 |
Increase (Decrease) in: | ||
Accounts Payable and Accrued Expenses | -887,926 | 308,136 |
Deferred –Drilling Obligations | 1,811,853 | -2,567,810 |
Deferred Income Taxes | -1,775 | 0 |
Net Cash Used by Operating Activities | -3,151,949 | -2,911,000 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Expenditures For Oil And Gas Properties and | -3,182,600 | -6,998,949 |
Proceeds from Turnkey Drilling Programs | 4,172,296 | 8,025,535 |
Proceeds from Sale of Assets | 369,977 | 4,206,755 |
Net Cash Provided by Investing Activities | 1,359,673 | 5,233,341 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from Long-Term Debt | 0 | 0 |
Principal Payments on Long-Term Debt | -24,116 | -1,183,333 |
Proceeds from Stock Options and Warrant Exercises | 0 | 1,227,627 |
Proceeds from Sale of Common Stock | 0 | 1,021,668 |
Net Cash Provided by (Used In) Financing Activities | -24,116 | 1,065,962 |
Net Increase (Decrease) in Cash and Cash Equivalents | -1,816,392 | 3,388,303 |
Cash & Cash Equivalents at Beginning of Year | 4,878,233 | 1,489,930 |
Cash & Cash Equivalents at End of Year | 3,061,841 | 4,878,233 |
Cash Paid for Interest | 81,606 | 23,890 |
Cash Paid for Taxes | 3,855 | 925 |
Supplemental Schedule of Non-Cash Investing and Financing Transactions: | ||
Purchase of Office building with note payable financing | 0 | 1,500,000 |
Conversion of convertible notes to common stock | 0 | 2,500,000 |
Accretion of discount to paid-in-capital upon early conversion of convertible notes | 0 | 1,144,083 |
Conversion of Series AA Stock to Common Stock | 17,865 | 0 |
Unrealized Gain (Loss) on Available-for-Sale Securities, net of tax effect | ($16,448) | $9,945 |
NOTE_1_SUMMARY_OF_SIGNIFICANT_
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
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 accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America and 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. As reflected in the accompanying financial statements, the Company has negative working capital, losses from operations and negative cash flows from operations. | |||||||||||||||||
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. | |||||||||||||||||
Liquidity | |||||||||||||||||
The primary sources of liquidity have historically been issuances of common stock and operations. Until we become cash flow positive, we anticipate that our primary sources of liquidity will be from the issuance of debt and/or equity, and the sale of oil and natural gas property participation interests . Assuming there are no further changes in expected sales and expense trends subsequent to March 30, 2015, the Company believes that its cash position will be sufficient to continue operations for the foreseeable next twelve months. | |||||||||||||||||
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 2014 and 2013, impairment losses of $268,093 and $70,203, 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, 2014 and 2013, Royale Energy had Deferred Drilling Obligations of $7,937,786 and $6,125,933 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. | |||||||||||||||||
Other Receivables | |||||||||||||||||
Our other receivables consists of receivables from direct working interest investors and industry partners. We provide 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 directly to bad debt expense when it becomes probable the receivable will not be collected. 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, 2014 and 2013, the Company established an allowance for uncollectable accounts of $1,734,713 and $1,081,580, respectively, for receivables from direct working interest investors whose expenses on non-producing wells were unlikely to be collected from revenue. | |||||||||||||||||
Revenue Receivables | |||||||||||||||||
Our revenue receivables consists of receivables related to the sale of our natural gas and oil. Once a production month is completed we receive payment approximately 15 to 30 days later. | |||||||||||||||||
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, 2014 | |||||||||||||||||
Income | Shares | Per-Share | |||||||||||||||
(Numerator) | (Denominator) | Amount | |||||||||||||||
Basic Income Per Share: | |||||||||||||||||
Net loss available to common stock | $ | (2,151,856 | ) | 14,943,323 | $ | (.14 | ) | ||||||||||
Diluted Income Per Share: | |||||||||||||||||
Effect of dilutive securities and stock options | - | $ | - | ||||||||||||||
Net income available to common stock | $ | (2,151,856 | ) | 14,943,323 | $ | (.14 | ) | ||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||||
Income | Shares | Per-Share | |||||||||||||||
(Numerator) | (Denominator) | Amount | |||||||||||||||
Basic Loss Per Share: | |||||||||||||||||
Net income available to common stock | $ | 1,149,153 | 13,853,290 | $ | 0.08 | ||||||||||||
Loss 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, 2014, Royale Energy had dilutive securities of 161,966. These securities were not included in the dilutive loss per share due to their antidilutive nature. | |||||||||||||||||
Stock Based Compensation | |||||||||||||||||
Royale Energy has a stock-based employee compensation plan, which is more fully described in Note 11. 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. | |||||||||||||||||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value. Carrying amounts of the Company’s financial instruments, including cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximate their fair values as of the balance sheet dates because of their generally short maturities. | |||||||||||||||||
The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: | |||||||||||||||||
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. | |||||||||||||||||
Level 2: Directly or indirectly observable inputs as of the reporting date through correlation with market data, including quoted prices for similar assets and liabilities in active markets and quoted prices in markets that are not active. Level 2 also includes assets and liabilities that are valued using models or other pricing methodologies that do not require significant judgment since the input assumptions used in the models, such as interest rates and volatility factors, are corroborated by readily observable data from actively quoted markets for substantially the full term of the financial instrument. | |||||||||||||||||
Level 3: Unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions | |||||||||||||||||
At December 31, 2014, Royale Energy reported the fair value of $0 in available for sale securities. The fair value was determined using the number of shares owned as of December 31, 2014, multiplied by the market price of those securities on December 31, 2014. At December 31, 2013, Royale Energy quoted prices in active markets for identical assets when determining the fair value measurements at the reporting date. The following table summarizes Royale’s financial assets measured and recognized at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy as described above: | |||||||||||||||||
31-Dec-14 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | $ | -- | $ | -- | $ | -- | $ | -- | |||||||||
Commercial paper | -- | -- | -- | -- | |||||||||||||
Short term marketable investments: | |||||||||||||||||
Available-for-sale securities | -- | -- | -- | -- | |||||||||||||
Total assets at fair value | $ | -- | $ | -- | $ | -- | $ | -- | |||||||||
31-Dec-13 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | $ | -- | $ | -- | $ | -- | $ | -- | |||||||||
Commercial paper | -- | -- | -- | -- | |||||||||||||
Short term marketable investments: | |||||||||||||||||
Available-for-sale securities | 16,448 | -- | -- | 16,448 | |||||||||||||
Total assets at fair value | $ | 16,448 | $ | -- | $ | -- | $ | 16,448 | |||||||||
Reclassifications | |||||||||||||||||
Certain items in the financial statements have been reclassified to maintain consistency and comparability for all periods presented herein. | |||||||||||||||||
Recently Issued Accounting Pronouncements | |||||||||||||||||
The Company has reviewed the updates issued by the Financial Accounting Standards Board (FASB) during the year ended December 31, 2014, 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, 2014 | |||||||||
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: | |||||||||
2014 | 2013 | ||||||||
Oil and Gas | |||||||||
Producing properties, including intangible drilling costs | $ | 4,920,521 | $ | 4,862,657 | |||||
Undeveloped properties | 2,773,422 | 2,779,672 | |||||||
Lease and well equipment | 4,410,120 | 4,392,363 | |||||||
12,104,063 | 12,034,692 | ||||||||
Accumulated depletion, depreciation and amortization | (7,318,510 | ) | (7,065,362 | ) | |||||
4,785,553 | $ | 4,969,330 | |||||||
2014 | 2013 | ||||||||
Commercial and Other | |||||||||
Real estate, including furniture and fixtures | $ | 2,768,394 | $ | 2,503,803 | |||||
Vehicles | 116,830 | 120,314 | |||||||
Furniture and equipment | 1,114,086 | 1,300,523 | |||||||
3,999,310 | 3,924,640 | ||||||||
Accumulated depreciation | (1,190,197 | ) | (1,339,545 | ) | |||||
2,809,113 | 2,585,095 | ||||||||
$ | 7,594,666 | 7,554,425 | |||||||
The following sets forth costs incurred for oil and gas property acquisition and development activities, whether capitalized or expensed: | |||||||||
2014 | 2013 | ||||||||
Acquisition - Proved | $ | 3,215 | 7,663 | ||||||
Acquisition- Unproved | $ | 84,715 | 0 | ||||||
Development | $ | 1,346,433 | 1,080,043 | ||||||
Exploration | $ | 2,309,105 | 4,822,260 | ||||||
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 2014 or 2013. We did not charge any previously capitalized exploratory well costs to expense upon adoption of Topic. Undeveloped properties are not subject to depletion, depreciation or amortization. | |||||||||
12 Months Ended December 31, | |||||||||
2014 | 2013 | ||||||||
Beginning balance at January 1 | $ | 0 | $ | 0 | |||||
Additions to capitalized exploratory well costs pending the determination of proved reserves | $ | 188,017 | $ | 410,303 | |||||
Reclassifications to wells, facilities, and equipment based on the determination of proved reserves | $ | (188,017 | ) | $ | (410,303 | ) | |||
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: | |||||||||
2014 | 2013 | ||||||||
Oil and gas sales | $ | 2,598,297 | 1,913,364 | ||||||
Production related costs | (2,044,479 | ) | (1,394,185 | ) | |||||
Lease Impairment | (268,093 | ) | (70,203 | ) | |||||
Depreciation, depletion and amortization | (315,574 | ) | (309,806 | ) | |||||
Results of operations from producing and | $ | (29,849 | ) | 139,170 | |||||
exploration activities | |||||||||
Income Taxes (Benefit) | 0 | 0 | |||||||
Net Results | $ | (29,849 | ) | 139,170 | |||||
NOTE_3_ASSET_RETIREMENT_OBLIGA
NOTE 3 - ASSET RETIREMENT OBLIGATION | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
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. | |||||||||
2014 | 2013 | ||||||||
Asset retirement obligation, Beginning of the year | $ | 862,369 | $ | 954,088 | |||||
Liabilities incurred during the period | 7,638 | 12,358 | |||||||
Settlements | (66,304 | ) | (97,522 | ) | |||||
Accretion expense | 503 | 17,106 | |||||||
Revisions in estimated cash flow | (23,661 | ) | |||||||
Asset retirement obligation, End of year | $ | 804,206 | $ | 862,369 | |||||
NOTE_4_TURNKEY_DRILLING_OBLIGA
NOTE 4 - TURNKEY DRILLING OBLIGATION | 12 Months Ended |
Dec. 31, 2014 | |
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, 2014 and 2013 Royale Energy had recorded deferred turnkey drilling associated with undrilled wells of $7,937,786 and $6,125,933, respectively, as a current liability. | |
NOTE_5_LONGTERM_DEBT
NOTE 5 - LONG-TERM DEBT | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Disclosure Text Block [Abstract] | |||||||||
Long-term Debt [Text Block] | NOTE 5 - LONG-TERM DEBT | ||||||||
2014 | 2013 | ||||||||
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. Stephen M Hosmer, Co-CEO, CFO is named as a personal guarantor of the loan. The loan agreement contains certain covenants that, among other things, Royale must maintain a ratio of EBITDA-Debt Service Coverage in excess of 1.50 to 1.00. At December 31, 2014, Royale was not in compliance with this covenant, but obtained a forbearance from the bank from terms of that covenant. | $ | 1,475,884 | $ | 1,500,000 | |||||
Total Long Term Debt | $ | 1,475,884 | $ | 1,500,000 | |||||
Less Current Maturity | 29,031 | $ | 22,916 | ||||||
Long Term Debt Less Current Portion | $ | 1,445,853 | $ | 1,477,084 | |||||
Maturities of long-term debt for the years subsequent to December 31, 2014 are as follows: | |||||||||
Year Ended December 31, | |||||||||
2015 | $ | 29,031 | |||||||
2016 | $ | 30,528 | |||||||
2017 | $ | 32,597 | |||||||
2018 | $ | 34,549 | |||||||
Thereafter | $ | 1,349,179 | |||||||
Total | $ | 1,475,884 | |||||||
NOTE_6_INCOME_TAXES
NOTE 6 - INCOME TAXES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
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, 2014 and 2013, respectively, are as follows: | |||||||||
2014 | 2013 | ||||||||
Deferred Tax Assets (Liabilities): | |||||||||
Statutory Depletion Carry Forward | $ | 672,480 | $ | 678,617 | |||||
Net Operating Loss | 4,568,737 | 4,053,001 | |||||||
Other | 939,061 | 702,275 | |||||||
Share-Based Compensation | 70,921 | 55,990 | |||||||
Capital Loss / AMT Credit Carry Forward | 76,410 | 76,410 | |||||||
Charitable Contributions Carry Forward | 16,602 | 15,510 | |||||||
Allowance for Doubtful Accounts | 681,052 | 412,353 | |||||||
Oil and Gas Properties and Fixed Assets | 4,828,214 | 4,723,641 | |||||||
$ | 11,853,477 | $ | 10,717,797 | ||||||
Valuation Allowance | (11,853,477 | ) | (10,717,797 | ) | |||||
Net Deferred Tax Asset | $ | - | $ | - | |||||
Deferred Tax Assets: | |||||||||
Current | $ | 126,499 | $ | 62,333 | |||||
Non-current | (126,499 | ) | (62,333 | ) | |||||
Deferred Tax Liabilities: | |||||||||
Current | |||||||||
Non-current | |||||||||
Net Deferred Tax Asset | $ | - | $ | - | |||||
At the end of 2013, management reviewed the realizability of the Company’s net deferred tax assets. Due to the Company’s cumulative losses in recent years, 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 2013. At the end of 2014, management 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 2014. 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 $1,700,000 at December 31, 2014. The depletion has no expiration date. The Company also has a net operating loss carry forward of approximately $11,300,000 at December 31, 2014, 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, 2014 and 2013, respectively, to pretax income is as follows: | |||||||||
2014 | 2013 | ||||||||
Tax (benefit) computed at statutory rate of 34% | $ | (731,630 | ) | $ | 390,712 | ||||
Increase (decrease) in taxes resulting from: | |||||||||
State tax / percentage depletion / other | |||||||||
Other non-deductible expenses | 1,665 | 3,078 | |||||||
Change in valuation allowance | 729,965 | (393,790 | ) | ||||||
Provision (benefit) | $ | - | $ | - | |||||
The components of the Company’s tax provision are as follows: | |||||||||
2014 | 2013 | ||||||||
Current tax provision (benefit) – federal | $ | - | - | ||||||
Current tax provision (benefit) – state | - | - | |||||||
Deferred tax provision (benefit) – federal | - | - | |||||||
Deferred tax provision (benefit) – state | - | - | |||||||
Total provision (benefit) | $ | - | - | ||||||
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, 2014, 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 2010 through 2013 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, 2014 | |
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 147,500 shares 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 has a stated value of $4 per share and provides shareholders with a one-time dividend payable equal to forty cents ($0.40) per share of Series AA Convertible Preferred Stock within thirty days after the expiration of one year from the date of purchase. The dividend has been paid on all outstanding shares as of December 31, 1994. | |
The Series AA Convertible Preferred Stock is convertible any time at the basic conversion rate of one share of common stock for two shares of Series AA Convertible Preferred Stock, subject to adjustment. Royale Energy has the option to call, at any time after six months from the issuance, the Series AA Convertible Preferred Stock at either the issue price of $4 per share plus 10%, if called within one year after issuance, or $4 per share thereafter. (Subject to the holders' conversion rights outlined above). The Series AA Convertible Preferred Stock has a liquidation preference to the common stock equal to $4 per share plus accrued dividends. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of the shares of the Series AA Convertible Preferred Stock shall be entitled to be paid out of the assets of the Corporation available for distribution to its shareholders before any payment shall be made in respect of the Corporation’s common stock, but only after payment to its creditors, an amount equal to $4.40 per share, if called within one year after issuance, or $4 per share thereafter. Holders of Series AA Convertible Preferred Stock shall have voting rights equal to the number of shares of common stock into which the Series AA Convertible Preferred Stock may be converted. | |
The Series AA Convertible Preferred Stock does not have the right of redemption at the stockholders' option. The preferred stock is not registered under the Securities Exchange Act of 1934, and no market exists for the preferred stock. The shares of Series AA Preferred stock are convertible into shares of Royale Energy's common stock at the option of the security holder, at the rate of two shares of convertible preferred stock for each share of common stock. During the year ending December 31, 2014, there was a conversions of 6,122 Series AA Preferred shares, with a book value of $17,865, for 3,061 common shares, and as of December 31, 2014 and 2013, and there were 46,662 and 52,784 shares, respectively of Series AA Preferred stock issued and outstanding. | |
NOTE_8_COMMON_STOCK
NOTE 8 - COMMON STOCK | 12 Months Ended |
Dec. 31, 2014 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | NOTE 8 - COMMON STOCK |
In April 2014, Royale Energy entered into a Sales Agreement with Roth Capital Partners, LLC (Roth), 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 Roth 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 Roth 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 Roth for certain expenses incurred in connection with entering into the Sales Agreement and has provided Roth with customary indemnification rights. | |
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, 2014 | |
Disclosure Text Block Supplement [Abstract] | |
Commitments Disclosure [Text Block] | NOTE 9 - OPERATING LEASES |
Royale rents an office and yard in Woodland, CA on a month to month basis that calls for monthly payments of $900. Rental expense for the years ended December 31, 2014 and 2013 was $74,047 and $361,020 respectively. | |
NOTE_10_RELATED_PARTY_TRANSACT
NOTE 10 - RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2014 | |
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 6.23% of Royale Energy common stock. Donald H. Hosmer is the brother of Stephen M. Hosmer, and son of Harry E. Hosmer. Donald has participated individually in 176 wells under the 1989 policy. During 2014, Donald participated in fractional interests of four wells in the amount of $18,692. At December 31, 2014, Royale had a receivable balance of $3,806 due from Donald Hosmer for normal drilling and lease operating expenses. | |
Stephen M. Hosmer, Royale Energy’s co-president, co-chief executive officer and chief financial officer, owns 8.13% of Royale Energy common stock. Stephen M. Hosmer is the brother of Donald H. Hosmer and son of Harry E. Hosmer. Stephen has participated individually in 174 wells under the 1989 policy. During 2014, Stephen participated in fractional interests of 4 wells in the amount of $7,714. At December 31, 2014, Royale had a receivable balance of $3,050 due from Stephen Hosmer for normal drilling and lease operating expenses. | |
Harry E. Hosmer, Royale Energy's former president and former chief executive officer, owns 4.45% 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. Harry Hosmer also assists Royale Energy on a consulting basis and receives $13,805 monthly for these services. During 2014, Harry Hosmer participated in fractional interests of 3 wells in the amount of $9,985. At December 31, 2014, Royale had a receivable balance of $942 due from Harry Hosmer for normal drilling and lease operating expenses. | |
NOTE_11_STOCK_COMPENSATION_PLA
NOTE 11 - STOCK COMPENSATION PLAN | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
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. In 2013, Royale did not recognize any compensation costs or tax effect related to this grant. | |||||||||||||||||
During the October 10, 2014 Board of Directors meeting, directors and executive offices of Royale Energy were granted 20,000 options each, 140,000 total, to purchase common stock at an exercise price of $5.00 per share. These options were granted for a period of 3 years and will expire after December 31, 2017. These options become exercisable at 5,000 shares per period beginning October 13, 2014, January 1, 2015, April 1, 2015 and July 1 2015. During 2014, Royale recognized compensation costs of $33,785 relating to this option grant. | |||||||||||||||||
The fair value of each option is estimated on the date of grant using the Black-Scholes option-pricing model. This model incorporates certain assumptions for inputs including a risk-free market interest rate, expected dividend yield of the underlying common stock, expected option life and expected volatility in the market value of the underlying common stock. There were 140,000 and 0 options granted in the years ended December 31, 2014 and 2013, respectively. The 2014 options were granted with the following assumptions:. | |||||||||||||||||
Options | 2014 | 2013 | |||||||||||||||
Expected volatility | 81.33 | % | - | ||||||||||||||
Weighted-average volatility | 81.33 | % | - | ||||||||||||||
Expected dividends | - | - | |||||||||||||||
Expected term (months) | 39 | - | |||||||||||||||
Risk-free rate | 0.57 | % | - | ||||||||||||||
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 common stock and other factors. The risk-free rate for the periods within the contractual life of the option is based on quoted market yields for U.S. Treasury debt securities. The expected dividend yield was zero as the Company was subject to debt covenant prohibiting the payment of dividends. Royale Energy uses historical data to estimate option exercise and board member turnover within the valuation model. Compensation expense related to stock options was recorded net of estimated forfeitures of | |||||||||||||||||
A summary of the status of Royale Energy's stock option plan as of December 31, 2014 and 2013, and changes during the years ending on those dates is presented below: | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Weighted- | Weighted- | ||||||||||||||||
Average | Average | ||||||||||||||||
Exercise | Exercise | ||||||||||||||||
Shares | Price | Shares | Price | ||||||||||||||
Options | |||||||||||||||||
Outstanding at Beginning of Year | 346,308 | $ | 3.25 | 346,308 | $ | 3.25 | |||||||||||
Granted | 35,000 | 5 | - | ||||||||||||||
Exercised | - | - | |||||||||||||||
Forfeited | (100,000 | ) | - | ||||||||||||||
Outstanding at End of Year | 281,308 | $ | 3.47 | 346,308 | $ | 3.25 | |||||||||||
Options Exercisable at Year End | 281,308 | $ | 3.47 | 346,308 | $ | 3.25 | |||||||||||
Weighted-average Fair Value of Options | $ | - | $ | - | |||||||||||||
Granted During the Year | |||||||||||||||||
At December 31, 2014, Royale Energy’s stock price, $2.11, was less than the weighted average exercise price, and as such the outstanding and exercisable stock options had no intrinsic value. The stock options granted in 2014 and 2010 have a weighted-average remaining contractual term of three years and one year, respectively as of December 31, 2014. | |||||||||||||||||
A summary of the status of Royale Energy's restricted stock grant plans as of December 31, 2014 and 2013, and changes during the years ending on those dates is presented below: | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Weighted- | Weighted- | ||||||||||||||||
Average | Average | ||||||||||||||||
Grant-Date | Grant-Date | ||||||||||||||||
Shares | Fair Value | Shares | Fair Value | ||||||||||||||
Non-vested Shares | |||||||||||||||||
Non-vested at Beginning of Year | - | $ | - | - | $ | - | |||||||||||
Granted | 140,000 | 0.97 | - | ||||||||||||||
Reinstated | - | - | |||||||||||||||
Vested | 35,000 | 0.97 | - | ||||||||||||||
Expired or Ineligible | - | $ | - | $ | |||||||||||||
Non-vested at End of Year | 105,000 | $ | 0.97 | - | |||||||||||||
During 2014, we recognized $33,785 in compensation costs for the vested shares related to this grant and in 2015 we will recognize a total of $91,704 for the additional 105,000 shares as they become vested. | |||||||||||||||||
NOTE_12_SIMPLE_IRA_PLAN
NOTE 12 - SIMPLE IRA PLAN | 12 Months Ended |
Dec. 31, 2014 | |
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, 2014 and 2013, were $47,081, and $49,846 respectively. | |
NOTE_13_ENVIRONMENTAL_MATTERS
NOTE 13 - ENVIRONMENTAL MATTERS | 12 Months Ended |
Dec. 31, 2014 | |
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 2014 or 2013. | |
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, 2014 | |
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 81% 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, 2014, and 2013. At December 31, 2014, and 2013, the Company’s non-interest bearing accounts were fully insured by the FDIC. At December 31, 2014 and 2013, cash in banks exceeded the FDIC limits by approximately $2.8 million and $4.3 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, 2014 | |
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. | |
Royale Energy, Inc. vs. Rampart Alaska LLC, Superior Court, Nome, Alaska. On November 14, 2014, Royale Energy, Inc. caused a complaint for lien foreclosure to be filed in the Superior Court for the State of Alaska, Second Judicial District at Nome. Royale Energy caused certain liens to be files against the working interests of Rampart Alaska LLC involving oil leases on the North Slope Alaska. The filing of the liens came about as the result of Rampart’s failure to reimburse for joint interest billings and cash calls. Royale seeks in the litigation to foreclose the liens to recover the sums secured thereby or the working interests themselves. Rampart Alaska answered the complaint and asserted a counterclaim against Royale for damages alleging breach of contract, violation of the covenant of good faith and fair dealing, unjust enrichment, defamation, violations of the Alaska Securities Act and seeking to undo the filing of the lien claims. Stephen Hosmer, as an officer of Royale, was also independently named as a third party defendant by Rampart for claims arising out of defamation and violation of the Alaska Securities Act. At this juncture, the case is in its preliminary phase and we are unable to provide a possible outcome other than to note that management vigorously will contest the allegations of the counterclaim and third-party complaint and will seek to aggressively move to realize on its lien claims to recover funds due and owing from Rampart. Because the case is only a number of months old, we are unable to provide an evaluation of the likelihood of an unfavorable outcome nor can we estimate the amount or range of potential loss. | |
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. On December 23, 2014 the court denied the motion to dismiss for lack of jurisdiction, meaning that the case could go forward in Florida. In February 2015, although the Company denied any liability to Mr. Jones, it agreed to settle the case for $20,000 to avoid the costs of long distance ligation. | |
Accounting_Policies_by_Policy_
Accounting Policies, by Policy (Policies) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||
Use of Estimates, Policy [Policy Text Block] | Use of Estimates | ||||||||||||||||
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America and 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. As reflected in the accompanying financial statements, the Company has negative working capital, losses from operations and negative cash flows from operations. | |||||||||||||||||
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. | |||||||||||||||||
Liquidity Disclosure [Policy Text Block] | Liquidity | ||||||||||||||||
The primary sources of liquidity have historically been issuances of common stock and operations. Until we become cash flow positive, we anticipate that our primary sources of liquidity will be from the issuance of debt and/or equity, and the sale of oil and natural gas property participation interests . Assuming there are no further changes in expected sales and expense trends subsequent to March 30, 2015, the Company believes that its cash position will be sufficient to continue operations for the foreseeable next twelve months. | |||||||||||||||||
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 2014 and 2013, impairment losses of $268,093 and $70,203, 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, 2014 and 2013, Royale Energy had Deferred Drilling Obligations of $7,937,786 and $6,125,933 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. | |||||||||||||||||
Receivables, Policy [Policy Text Block] | Other Receivables | ||||||||||||||||
Our other receivables consists of receivables from direct working interest investors and industry partners. We provide 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 directly to bad debt expense when it becomes probable the receivable will not be collected. 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, 2014 and 2013, the Company established an allowance for uncollectable accounts of $1,734,713 and $1,081,580, respectively, for receivables from direct working interest investors whose expenses on non-producing wells were unlikely to be collected from revenue. | |||||||||||||||||
Trade and Other Accounts Receivable, Policy [Policy Text Block] | Revenue Receivables | ||||||||||||||||
Our revenue receivables consists of receivables related to the sale of our natural gas and oil. Once a production month is completed we receive payment approximately 15 to 30 days later. | |||||||||||||||||
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. | |||||||||||||||||
Earnings Per Share, Policy [Policy Text Block] | Income (Loss) Per Share | ||||||||||||||||
Basic and diluted income (losses) per share are calculated as follows: | |||||||||||||||||
For the Year Ended December 31, 2014 | |||||||||||||||||
Income | Shares | Per-Share | |||||||||||||||
(Numerator) | (Denominator) | Amount | |||||||||||||||
Basic Income Per Share: | |||||||||||||||||
Net loss available to common stock | $ | (2,151,856 | ) | 14,943,323 | $ | (.14 | ) | ||||||||||
Diluted Income Per Share: | |||||||||||||||||
Effect of dilutive securities and stock options | - | $ | - | ||||||||||||||
Net income available to common stock | $ | (2,151,856 | ) | 14,943,323 | $ | (.14 | ) | ||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||||
Income | Shares | Per-Share | |||||||||||||||
(Numerator) | (Denominator) | Amount | |||||||||||||||
Basic Loss Per Share: | |||||||||||||||||
Net income available to common stock | $ | 1,149,153 | 13,853,290 | $ | 0.08 | ||||||||||||
Loss 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, 2014, Royale Energy had dilutive securities of 161,966. These securities were not included in the dilutive loss per share due to their antidilutive nature. | |||||||||||||||||
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 11. 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. | |||||||||||||||||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value. Carrying amounts of the Company’s financial instruments, including cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximate their fair values as of the balance sheet dates because of their generally short maturities. | |||||||||||||||||
The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: | |||||||||||||||||
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. | |||||||||||||||||
Level 2: Directly or indirectly observable inputs as of the reporting date through correlation with market data, including quoted prices for similar assets and liabilities in active markets and quoted prices in markets that are not active. Level 2 also includes assets and liabilities that are valued using models or other pricing methodologies that do not require significant judgment since the input assumptions used in the models, such as interest rates and volatility factors, are corroborated by readily observable data from actively quoted markets for substantially the full term of the financial instrument. | |||||||||||||||||
Level 3: Unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions | |||||||||||||||||
At December 31, 2014, Royale Energy reported the fair value of $0 in available for sale securities. The fair value was determined using the number of shares owned as of December 31, 2014, multiplied by the market price of those securities on December 31, 2014. At December 31, 2013, Royale Energy quoted prices in active markets for identical assets when determining the fair value measurements at the reporting date. The following table summarizes Royale’s financial assets measured and recognized at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy as described above: | |||||||||||||||||
31-Dec-14 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | $ | -- | $ | -- | $ | -- | $ | -- | |||||||||
Commercial paper | -- | -- | -- | -- | |||||||||||||
Short term marketable investments: | |||||||||||||||||
Available-for-sale securities | -- | -- | -- | -- | |||||||||||||
Total assets at fair value | $ | -- | $ | -- | $ | -- | $ | -- | |||||||||
31-Dec-13 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | $ | -- | $ | -- | $ | -- | $ | -- | |||||||||
Commercial paper | -- | -- | -- | -- | |||||||||||||
Short term marketable investments: | |||||||||||||||||
Available-for-sale securities | 16,448 | -- | -- | 16,448 | |||||||||||||
Total assets at fair value | $ | 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. | |||||||||||||||||
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, 2014, 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, 2014 | |||||||||||||||||
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, 2014 | |||||||||||||||||
Income | Shares | Per-Share | |||||||||||||||
(Numerator) | (Denominator) | Amount | |||||||||||||||
Basic Income Per Share: | |||||||||||||||||
Net loss available to common stock | $ | (2,151,856 | ) | 14,943,323 | $ | (.14 | ) | ||||||||||
Diluted Income Per Share: | |||||||||||||||||
Effect of dilutive securities and stock options | - | $ | - | ||||||||||||||
Net income available to common stock | $ | (2,151,856 | ) | 14,943,323 | $ | (.14 | ) | ||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||||
Income | Shares | Per-Share | |||||||||||||||
(Numerator) | (Denominator) | Amount | |||||||||||||||
Basic Loss Per Share: | |||||||||||||||||
Net income available to common stock | $ | 1,149,153 | 13,853,290 | $ | 0.08 | ||||||||||||
Loss 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 | ||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The following table summarizes Royale’s financial assets measured and recognized at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy as described above: | ||||||||||||||||
31-Dec-14 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | $ | -- | $ | -- | $ | -- | $ | -- | |||||||||
Commercial paper | -- | -- | -- | -- | |||||||||||||
Short term marketable investments: | |||||||||||||||||
Available-for-sale securities | -- | -- | -- | -- | |||||||||||||
Total assets at fair value | $ | -- | $ | -- | $ | -- | $ | -- | |||||||||
31-Dec-13 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | $ | -- | $ | -- | $ | -- | $ | -- | |||||||||
Commercial paper | -- | -- | -- | -- | |||||||||||||
Short term marketable investments: | |||||||||||||||||
Available-for-sale securities | 16,448 | -- | -- | 16,448 | |||||||||||||
Total assets at fair value | $ | 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, 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 at December 31: | ||||||||
2014 | 2013 | ||||||||
Oil and Gas | |||||||||
Producing properties, including intangible drilling costs | $ | 4,920,521 | $ | 4,862,657 | |||||
Undeveloped properties | 2,773,422 | 2,779,672 | |||||||
Lease and well equipment | 4,410,120 | 4,392,363 | |||||||
12,104,063 | 12,034,692 | ||||||||
Accumulated depletion, depreciation and amortization | (7,318,510 | ) | (7,065,362 | ) | |||||
4,785,553 | $ | 4,969,330 | |||||||
2014 | 2013 | ||||||||
Commercial and Other | |||||||||
Real estate, including furniture and fixtures | $ | 2,768,394 | $ | 2,503,803 | |||||
Vehicles | 116,830 | 120,314 | |||||||
Furniture and equipment | 1,114,086 | 1,300,523 | |||||||
3,999,310 | 3,924,640 | ||||||||
Accumulated depreciation | (1,190,197 | ) | (1,339,545 | ) | |||||
2,809,113 | 2,585,095 | ||||||||
$ | 7,594,666 | 7,554,425 | |||||||
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: | ||||||||
2014 | 2013 | ||||||||
Acquisition - Proved | $ | 3,215 | 7,663 | ||||||
Acquisition- Unproved | $ | 84,715 | 0 | ||||||
Development | $ | 1,346,433 | 1,080,043 | ||||||
Exploration | $ | 2,309,105 | 4,822,260 | ||||||
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 2014 or 2013. We did not charge any previously capitalized exploratory well costs to expense upon adoption of Topic. | ||||||||
12 Months Ended December 31, | |||||||||
2014 | 2013 | ||||||||
Beginning balance at January 1 | $ | 0 | $ | 0 | |||||
Additions to capitalized exploratory well costs pending the determination of proved reserves | $ | 188,017 | $ | 410,303 | |||||
Reclassifications to wells, facilities, and equipment based on the determination of proved reserves | $ | (188,017 | ) | $ | (410,303 | ) | |||
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: | ||||||||
2014 | 2013 | ||||||||
Oil and gas sales | $ | 2,598,297 | 1,913,364 | ||||||
Production related costs | (2,044,479 | ) | (1,394,185 | ) | |||||
Lease Impairment | (268,093 | ) | (70,203 | ) | |||||
Depreciation, depletion and amortization | (315,574 | ) | (309,806 | ) | |||||
Results of operations from producing and | $ | (29,849 | ) | 139,170 | |||||
exploration activities | |||||||||
Income Taxes (Benefit) | 0 | 0 | |||||||
Net Results | $ | (29,849 | ) | 139,170 |
NOTE_3_ASSET_RETIREMENT_OBLIGA1
NOTE 3 - ASSET RETIREMENT OBLIGATION (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Asset Retirement Obligation Disclosure [Abstract] | |||||||||
Schedule of Change in Asset Retirement Obligation [Table Text Block] | 2014 | 2013 | |||||||
Asset retirement obligation, Beginning of the year | $ | 862,369 | $ | 954,088 | |||||
Liabilities incurred during the period | 7,638 | 12,358 | |||||||
Settlements | (66,304 | ) | (97,522 | ) | |||||
Accretion expense | 503 | 17,106 | |||||||
Revisions in estimated cash flow | (23,661 | ) | |||||||
Asset retirement obligation, End of year | $ | 804,206 | $ | 862,369 |
NOTE_5_LONGTERM_DEBT_Tables
NOTE 5 - LONG-TERM DEBT (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Disclosure Text Block [Abstract] | |||||||||
Schedule of Long-term Debt Instruments [Table Text Block] | 2014 | 2013 | |||||||
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. Stephen M Hosmer, Co-CEO, CFO is named as a personal guarantor of the loan. The loan agreement contains certain covenants that, among other things, Royale must maintain a ratio of EBITDA-Debt Service Coverage in excess of 1.50 to 1.00. At December 31, 2014, Royale was not in compliance with this covenant, but obtained a forbearance from the bank from terms of that covenant. | $ | 1,475,884 | $ | 1,500,000 | |||||
Total Long Term Debt | $ | 1,475,884 | $ | 1,500,000 | |||||
Less Current Maturity | 29,031 | $ | 22,916 | ||||||
Long Term Debt Less Current Portion | $ | 1,445,853 | $ | 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, 2014 are as follows: | ||||||||
Year Ended December 31, | |||||||||
2015 | $ | 29,031 | |||||||
2016 | $ | 30,528 | |||||||
2017 | $ | 32,597 | |||||||
2018 | $ | 34,549 | |||||||
Thereafter | $ | 1,349,179 | |||||||
Total | $ | 1,475,884 |
NOTE_6_INCOME_TAXES_Tables
NOTE 6 - INCOME TAXES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
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, 2014 and 2013, respectively, are as follows: | ||||||||
2014 | 2013 | ||||||||
Deferred Tax Assets (Liabilities): | |||||||||
Statutory Depletion Carry Forward | $ | 672,480 | $ | 678,617 | |||||
Net Operating Loss | 4,568,737 | 4,053,001 | |||||||
Other | 939,061 | 702,275 | |||||||
Share-Based Compensation | 70,921 | 55,990 | |||||||
Capital Loss / AMT Credit Carry Forward | 76,410 | 76,410 | |||||||
Charitable Contributions Carry Forward | 16,602 | 15,510 | |||||||
Allowance for Doubtful Accounts | 681,052 | 412,353 | |||||||
Oil and Gas Properties and Fixed Assets | 4,828,214 | 4,723,641 | |||||||
$ | 11,853,477 | $ | 10,717,797 | ||||||
Valuation Allowance | (11,853,477 | ) | (10,717,797 | ) | |||||
Net Deferred Tax Asset | $ | - | $ | - | |||||
Deferred Tax Assets: | |||||||||
Current | $ | 126,499 | $ | 62,333 | |||||
Non-current | (126,499 | ) | (62,333 | ) | |||||
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, 2014 and 2013, respectively, to pretax income is as follows: | ||||||||
2014 | 2013 | ||||||||
Tax (benefit) computed at statutory rate of 34% | $ | (731,630 | ) | $ | 390,712 | ||||
Increase (decrease) in taxes resulting from: | |||||||||
State tax / percentage depletion / other | |||||||||
Other non-deductible expenses | 1,665 | 3,078 | |||||||
Change in valuation allowance | 729,965 | (393,790 | ) | ||||||
Provision (benefit) | $ | - | $ | - | |||||
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | The components of the Company’s tax provision are as follows: | ||||||||
2014 | 2013 | ||||||||
Current tax provision (benefit) – federal | $ | - | - | ||||||
Current tax provision (benefit) – state | - | - | |||||||
Deferred tax provision (benefit) – federal | - | - | |||||||
Deferred tax provision (benefit) – state | - | - | |||||||
Total provision (benefit) | $ | - | - |
NOTE_11_STOCK_COMPENSATION_PLA1
NOTE 11 - STOCK COMPENSATION PLAN (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The 2014 options were granted with the following assumptions:. | ||||||||||||||||
Options | 2014 | 2013 | |||||||||||||||
Expected volatility | 81.33 | % | - | ||||||||||||||
Weighted-average volatility | 81.33 | % | - | ||||||||||||||
Expected dividends | - | - | |||||||||||||||
Expected term (months) | 39 | - | |||||||||||||||
Risk-free rate | 0.57 | % | - | ||||||||||||||
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, 2014 and 2013, and changes during the years ending on those dates is presented below: | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Weighted- | Weighted- | ||||||||||||||||
Average | Average | ||||||||||||||||
Exercise | Exercise | ||||||||||||||||
Shares | Price | Shares | Price | ||||||||||||||
Options | |||||||||||||||||
Outstanding at Beginning of Year | 346,308 | $ | 3.25 | 346,308 | $ | 3.25 | |||||||||||
Granted | 35,000 | 5 | - | ||||||||||||||
Exercised | - | - | |||||||||||||||
Forfeited | (100,000 | ) | - | ||||||||||||||
Outstanding at End of Year | 281,308 | $ | 3.47 | 346,308 | $ | 3.25 | |||||||||||
Options Exercisable at Year End | 281,308 | $ | 3.47 | 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, 2014 and 2013, and changes during the years ending on those dates is presented below: | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Weighted- | Weighted- | ||||||||||||||||
Average | Average | ||||||||||||||||
Grant-Date | Grant-Date | ||||||||||||||||
Shares | Fair Value | Shares | Fair Value | ||||||||||||||
Non-vested Shares | |||||||||||||||||
Non-vested at Beginning of Year | - | $ | - | - | $ | - | |||||||||||
Granted | 140,000 | 0.97 | - | ||||||||||||||
Reinstated | - | - | |||||||||||||||
Vested | 35,000 | 0.97 | - | ||||||||||||||
Expired or Ineligible | - | $ | - | $ | |||||||||||||
Non-vested at End of Year | 105,000 | $ | 0.97 | - |
NOTE_1_SUMMARY_OF_SIGNIFICANT_2
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Joint Venture, Ownership Interest | 50.00% | |
Impairment of Oil and Gas Properties | $268,093 | $70,203 |
Customer Deposits, Current | 7,937,786 | 6,125,933 |
Allowance for Doubtful Accounts Receivable | 1,734,713 | 1,081,580 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares) | 161,966 | |
Available-for-sale Securities | $0 | $16,448 |
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, 2014 | Dec. 31, 2013 | |
Basic Income Per Share: | ||
Net income (loss) available to common stock, Income | ($2,151,856) | $1,149,153 |
Net income (loss) available to common stock, Shares | 14,943,323 | 13,853,290 |
Net income (loss) available to common stock, Per-Share Amount | ($0.14) | $0.08 |
Diluted Income Per Share: | ||
Effect of dilutive securities and stock options, Income | 0 | 0 |
Effect of dilutive securities and stock options, Shares | 0 | 435,195 |
Effect of dilutive securities and stock options, Per-Share Amount | $0 | $0 |
Net income (loss) available to common stock, Income | ($2,151,856) | $1,149,153 |
Net income (loss) available to common stock, Shares | 14,943,323 | 14,288,485 |
Net income (loss) available to common stock, Per-Share Amount | ($0.14) | $0.08 |
NOTE_1_SUMMARY_OF_SIGNIFICANT_4
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Cash equivalents: | ||
Money market funds | $0 | $0 |
Commercial paper | 0 | 0 |
Short term marketable investments: | ||
Available-for-sale securities | 0 | 16,448 |
Total assets at fair value | 0 | 16,448 |
Fair Value, Inputs, Level 1 [Member] | ||
Cash equivalents: | ||
Money market funds | 0 | 0 |
Commercial paper | 0 | 0 |
Short term marketable investments: | ||
Available-for-sale securities | 0 | 16,448 |
Total assets at fair value | 0 | 16,448 |
Fair Value, Inputs, Level 2 [Member] | ||
Cash equivalents: | ||
Money market funds | 0 | 0 |
Commercial paper | 0 | 0 |
Short term marketable investments: | ||
Available-for-sale securities | 0 | 0 |
Total assets at fair value | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Cash equivalents: | ||
Money market funds | 0 | 0 |
Commercial paper | 0 | 0 |
Short term marketable investments: | ||
Available-for-sale securities | 0 | 0 |
Total assets at fair value | $0 | $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, 2014 | Dec. 31, 2013 |
Oil and Gas | ||
Producing properties, including intangible drilling costs | $4,920,521 | $4,862,657 |
Undeveloped properties | 2,773,422 | 2,779,672 |
Lease and well equipment | 4,410,120 | 4,392,363 |
12,104,063 | 12,034,692 | |
Accumulated depletion, depreciation and amortization | -7,318,510 | -7,065,362 |
4,785,553 | 4,969,330 | |
Commercial and Other | ||
Property, Plant and Equipment, Gross | 3,999,310 | 3,924,640 |
Accumulated depreciation | -1,190,197 | -1,339,545 |
2,809,113 | 2,585,095 | |
7,594,666 | 7,554,425 | |
Land, Buildings and Improvements [Member] | ||
Commercial and Other | ||
Property, Plant and Equipment, Gross | 2,768,394 | 2,503,803 |
Vehicles [Member] | ||
Commercial and Other | ||
Property, Plant and Equipment, Gross | 116,830 | 120,314 |
Furniture and Fixtures [Member] | ||
Commercial and Other | ||
Property, Plant and Equipment, Gross | $1,114,086 | $1,300,523 |
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, 2014 | Dec. 31, 2013 | |
Cost Incurred in Oil and Gas Property Acquisition, Exploration, and Development Activities Disclosure [Abstract] | ||
Acquisition - Proved | $3,215 | $7,663 |
Acquisition- Unproved | 84,715 | 0 |
Development | 1,346,433 | 1,080,043 |
Exploration | $2,309,105 | $4,822,260 |
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, 2014 | Dec. 31, 2013 | |
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 | 188,017 | 410,303 |
Reclassifications to wells, facilities, and equipment based on the determination of proved reserves | -188,017 | -410,303 |
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, 2014 | Dec. 31, 2013 | |
Results of Operations for Oil and Gas Producing Activities Disclosure [Abstract] | ||
Oil and gas sales | $2,598,297 | $1,913,364 |
Production related costs | -2,044,479 | -1,394,185 |
Lease Impairment | -268,093 | -70,203 |
Depreciation, depletion and amortization | -315,574 | -309,806 |
Results of operations from producing and exploration activities | -29,849 | 139,170 |
Income Taxes (Benefit) | 0 | 0 |
Net Results | ($29,849) | $139,170 |
NOTE_3_ASSET_RETIREMENT_OBLIGA2
NOTE 3 - ASSET RETIREMENT OBLIGATION (Details) - Schedule of Change in Asset Retirement Obligation (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Change in Asset Retirement Obligation [Abstract] | ||
Asset retirement obligation, Beginning of the year | $862,369 | $954,088 |
Liabilities incurred during the period | 7,638 | 12,358 |
Settlements | -66,304 | -97,522 |
Accretion expense | 503 | 17,106 |
Revisions in estimated cash flow | 0 | -23,661 |
Asset retirement obligation, End of year | $804,206 | $862,369 |
NOTE_4_TURNKEY_DRILLING_OBLIGA1
NOTE 4 - TURNKEY DRILLING OBLIGATION (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred Revenue Disclosure [Abstract] | ||
Customer Deposits, Current | $7,937,786 | $6,125,933 |
NOTE_5_LONGTERM_DEBT_Details_S
NOTE 5 - LONG-TERM DEBT (Details) - Schedule of Lont-term Debt (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Debt Instrument [Line Items] | ||
Long Term Debt | $1,475,884 | $1,500,000 |
Less Current Maturity | 29,031 | 22,916 |
Long Term Debt Less Current Portion | 1,445,853 | 1,477,084 |
Secured Debt [Member] | ||
Debt Instrument [Line Items] | ||
Long Term Debt | $1,475,884 | $1,500,000 |
NOTE_5_LONGTERM_DEBT_Details_S1
NOTE 5 - LONG-TERM DEBT (Details) - Schedule of Lont-term Debt (Parentheticals) (Secured Debt [Member], USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Secured Debt [Member] | ||
Debt Instrument [Line Items] | ||
Purchase Agreement, Purchase Price | $2,000,000 | $2,000,000 |
Purchase Price, Cash Paid | 500,000 | 500,000 |
Note | $1,500,000 | $1,500,000 |
Note, Interest Rate | 5.75% | 5.75% |
Note, Payment | 119 regular payments of $9,525 each and one balloon payment estimated at $1,150,435 | 119 regular payments of $9,525 each and one balloon payment estimated at $1,150,435 |
Note, First Payment | 1-Feb-14 | 1-Feb-14 |
Note, due on | 1-Jan-24 | 1-Jan-24 |
Entered into Agreement | 24-Dec-13 | 24-Dec-13 |
Loan Covenants | Royale must maintain a ratio of EBITDA-Debt Service Coverage in excess of 1.50 to 1.00. | Royale must maintain a ratio of EBITDA-Debt Service Coverage in excess of 1.50 to 1.00. |
NOTE_5_LONGTERM_DEBT_Details_S2
NOTE 5 - LONG-TERM DEBT (Details) - Schedule of Maturities of Long-term Debt (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Schedule of Maturities of Long-term Debt [Abstract] | ||
2015 | $29,031 | |
2016 | 30,528 | |
2017 | 32,597 | |
2018 | 34,549 | |
Thereafter | 1,349,179 | |
Total | $1,475,884 | $1,500,000 |
NOTE_6_INCOME_TAXES_Details
NOTE 6 - INCOME TAXES (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |
Tax Credit Carryforward, Deferred Tax Asset | $1,700,000 |
Operating Loss Carryforwards | $11,300,000 |
Operating Loss Carryforwards, Expiration Date | 2027 |
NOTE_6_INCOME_TAXES_Details_Sc
NOTE 6 - INCOME TAXES (Details) - Schedule of Deferred Tax Assets and Liabilities (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred Tax Assets (Liabilities): | ||
Statutory Depletion Carry Forward | $672,480 | $678,617 |
Net Operating Loss | 4,568,737 | 4,053,001 |
Other | 939,061 | 702,275 |
Share-Based Compensation | 70,921 | 55,990 |
Capital Loss / AMT Credit Carry Forward | 76,410 | 76,410 |
Charitable Contributions Carry Forward | 16,602 | 15,510 |
Allowance for Doubtful Accounts | 681,052 | 412,353 |
Oil and Gas Properties and Fixed Assets | 4,828,214 | 4,723,641 |
11,853,477 | 10,717,797 | |
Valuation Allowance | -11,853,477 | -10,717,797 |
Net Deferred Tax Asset | 0 | 0 |
Deferred Tax Assets: | ||
Current | 126,499 | 62,333 |
Non-current | -126,499 | -62,333 |
Deferred Tax Liabilities: | ||
Current | 0 | -1,775 |
Non-current | 0 | 0 |
Net Deferred Tax Asset | $0 | $0 |
NOTE_6_INCOME_TAXES_Details_Sc1
NOTE 6 - INCOME TAXES (Details) - Schedule of Effective Income Tax Rate Reconciliation (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Effective Income Tax Rate Reconciliation [Abstract] | ||
Tax (benefit) computed at statutory rate of 34% | ($731,630) | $390,712 |
Increase (decrease) in taxes resulting from: | ||
State tax / percentage depletion / other | 0 | 0 |
Other non-deductible expenses | 1,665 | 3,078 |
Change in valuation allowance | 729,965 | -393,790 |
Provision (benefit) | $0 | $0 |
NOTE_6_INCOME_TAXES_Details_Sc2
NOTE 6 - INCOME TAXES (Details) - Schedule of Effective Income Tax Rate Reconciliation (Parentheticals) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
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, 2014 | Dec. 31, 2013 | |
Schedule of Components of Income Tax Expense (Benefit) [Abstract] | ||
Current tax provision (benefit) b federal | $0 | $0 |
Current tax provision (benefit) b state | 0 | 0 |
Deferred tax provision (benefit) b federal | 0 | 0 |
Deferred tax provision (benefit) b state | 0 | 0 |
Total provision (benefit) | $0 | $0 |
NOTE_7_SERIES_AA_PREFERRED_STO1
NOTE 7 - SERIES AA PREFERRED STOCK (Details) (USD $) | 12 Months Ended | 1 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | Apr. 30, 1992 | |
NOTE 7 - SERIES AA PREFERRED STOCK (Details) [Line Items] | |||
Preferred Stock, Shares Authorized | 147,500 | 147,500 | |
Conversion of Stock, Amount Issued (in Dollars) | $17,865 | $0 | |
Conversion of Stock, Shares Issued | 3,061 | ||
Preferred Stock, Shares Issued | 46,662 | 52,784 | |
Preferred Stock, Shares Outstanding | 46,662 | 52,784 | |
Series AA Preferred Stock [Member] | |||
NOTE 7 - SERIES AA PREFERRED STOCK (Details) [Line Items] | |||
Preferred Stock, Shares Authorized | 147,500 | ||
Preferred Stock, Par or Stated Value Per Share (in Dollars per share) | $4 | ||
Preferred Stock, Call or Exercise Features | provides shareholders with a one-time dividend payable equal to forty cents ($0.40) per share of Series AA Convertible Preferred Stock within thirty days after the expiration of one year from the date of purchase | ||
Preferred Stock, Dividend Rate, Per-Dollar-Amount (in Dollars per share) | $0.40 | ||
Convertible Preferred Stock, Terms of Conversion | The Series AA Convertible Preferred Stock is convertible any time at the basic conversion rate of one share of common stock for two shares of Series AA Convertible Preferred Stock, subject to adjustment. Royale Energy has the option to call, at any time after six months from the issuance, the Series AA Convertible Preferred Stock at either the issue price of $4 per share plus 10%, if called within one year after issuance, or $4 per share thereafter. | ||
Preferred Stock, Liquidation Preference Per Share (in Dollars per share) | $4 | ||
Preferred Stock, Redemption Terms | In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of the shares of the Series AA Convertible Preferred Stock shall be entitled to be paid out of the assets of the Corporation available for distribution to its shareholders before any payment shall be made in respect of the Corporation’s common stock, but only after payment to its creditors, an amount equal to $4.40 per share, if called within one year after issuance, or $4 per share thereafter. | ||
Conversion of Stock, Shares Converted | 6,122 | ||
Conversion of Stock, Amount Issued (in Dollars) | $17,865 | ||
Preferred Stock, Shares Issued | 46,662 | 52,784 | |
Preferred Stock, Shares Outstanding | 46,662 | 52,784 |
NOTE_8_COMMON_STOCK_Details
NOTE 8 - COMMON STOCK (Details) (USD $) | 12 Months Ended | 0 Months Ended | 2 Months Ended | 1 Months Ended | 2 Months Ended | 1 Months Ended | 2 Months Ended | ||||
Dec. 31, 2013 | Aug. 04, 2009 | Apr. 30, 2011 | Oct. 31, 2009 | Apr. 30, 2014 | Feb. 28, 2013 | Mar. 31, 2011 | Mar. 31, 2012 | Jun. 30, 2008 | Jun. 30, 2013 | Aug. 31, 2009 | |
NOTE 8 - COMMON STOCK (Details) [Line Items] | |||||||||||
Stock Issued During Period, Value, New Issues (in Dollars) | $1,021,668 | ||||||||||
Series A Warrants [Member] | Securities Purchase Agreement, Cranshire Capital [Member] | |||||||||||
NOTE 8 - COMMON STOCK (Details) [Line Items] | |||||||||||
Class of Warrant or Rights, Granted | 329,850 | ||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $2.19 | ||||||||||
Class of Warrant or Rights, Exercised | 329,850 | ||||||||||
Warrant Term | 5 years | ||||||||||
Proceeds from Issuance of Warrants (in Dollars) | 722,372 | ||||||||||
Series A-1 Warrants [Member] | Securities Purchase Agreement, Cranshire Capital [Member] | |||||||||||
NOTE 8 - COMMON STOCK (Details) [Line Items] | |||||||||||
Class of Warrant or Rights, Granted | 1,808 | ||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $2.19 | ||||||||||
Warrant Term | 5 years | ||||||||||
Series B Warrants [Member] | Securities Purchase Agreement, Cranshire Capital [Member] | |||||||||||
NOTE 8 - COMMON STOCK (Details) [Line Items] | |||||||||||
Class of Warrant or Rights, Granted | 511,628 | ||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $2.15 | ||||||||||
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. | ||||||||||
Class of Warrant or Rights, Exercised | 511,628 | ||||||||||
Proceeds from Warrant Exercises (in Dollars) | 1,080,650 | ||||||||||
Warrant Term | 1 year | ||||||||||
Series C Warrants [Member] | Securities Purchase Agreement, Cranshire Capital [Member] | |||||||||||
NOTE 8 - COMMON STOCK (Details) [Line Items] | |||||||||||
Class of Warrant or Rights, Granted | 306,977 | ||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $2.19 | ||||||||||
Warrant Term | 5 years | ||||||||||
Securities Purchase Agreement, Roth Capital Partners, LLC [Member] | Maximum [Member] | |||||||||||
NOTE 8 - COMMON STOCK (Details) [Line Items] | |||||||||||
Other Commitment (in Dollars) | 10,000,000 | ||||||||||
Securities Purchase Agreement, Roth Capital Partners, LLC [Member] | |||||||||||
NOTE 8 - COMMON STOCK (Details) [Line Items] | |||||||||||
Stock issuance, commission fee percentage | 3.50% | ||||||||||
Securities Purchase Agreement, C. K. Cooper & Company, Inc. [Member] | Maximum [Member] | |||||||||||
NOTE 8 - COMMON STOCK (Details) [Line Items] | |||||||||||
Other Commitment (in Dollars) | 10,000,000 | ||||||||||
Securities Purchase Agreement, C. K. Cooper & Company, Inc. [Member] | |||||||||||
NOTE 8 - COMMON STOCK (Details) [Line Items] | |||||||||||
Stock issuance, commission fee percentage | 3.50% | ||||||||||
Securities Purchase Agreement, Cranshire Capital [Member] | Warrants Exercised in March 2012 [Member] | |||||||||||
NOTE 8 - COMMON STOCK (Details) [Line Items] | |||||||||||
Class of Warrant or Rights, Exercised | 71,918 | ||||||||||
Proceeds from Warrant Exercises (in Dollars) | 143,117 | ||||||||||
Securities Purchase Agreement, Cranshire Capital [Member] | Warrants Exercised during February and March 2012 [Member] | |||||||||||
NOTE 8 - COMMON STOCK (Details) [Line Items] | |||||||||||
Class of Warrant or Rights, Exercised | 67,160 | ||||||||||
Proceeds from Warrant Exercises (in Dollars) | 185,999 | ||||||||||
Securities Purchase Agreement, Cranshire Capital [Member] | |||||||||||
NOTE 8 - COMMON STOCK (Details) [Line Items] | |||||||||||
Stock Issued During Period, Shares, New Issues | 552,764 | 547,945 | |||||||||
Stock Issued During Period, Value, New Issues (in Dollars) | 4,000,000 | ||||||||||
Sale of Stock, Price Per Share (in Dollars per share) | $1.99 | $7.30 | |||||||||
Class of Warrant or Rights, Granted | 191,781 | ||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $1.99 | $7.30 | $1.99 | ||||||||
Class of Warrant or Rights, Exercise Price, Description | 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 | 321,443 | ||||||||||
Proceeds from Warrant Exercises (in Dollars) | $639,672 |
NOTE_9_OPERATING_LEASES_Detail
NOTE 9 - OPERATING LEASES (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
NOTE 9 - OPERATING LEASES (Details) [Line Items] | ||
Description of Lessee Leasing Arrangements, Operating Leases | month to month basis | |
Operating Leases, Rent Expense | $74,047 | $361,020 |
Operating Lease, Office Space, Woodland [Member] | ||
NOTE 9 - OPERATING LEASES (Details) [Line Items] | ||
Operating Leases, Rent Expense, Minimum Rentals | $900 |
NOTE_10_RELATED_PARTY_TRANSACT1
NOTE 10 - RELATED PARTY TRANSACTIONS (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Donald H. Hosmer, co-president and co-chief executive officer [Member] | |
NOTE 10 - RELATED PARTY TRANSACTIONS (Details) [Line Items] | |
Equity Method Investment, Ownership Percentage | 6.23% |
Number of Wells, Participated Individually | 176 |
Number of Wells with Fractional Interest | 4 |
Wells, Fractional Interest, Value (in Dollars) | $18,692 |
Due from Related Parties (in Dollars) | 3,806 |
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 | 8.13% |
Number of Wells, Participated Individually | 174 |
Number of Wells with Fractional Interest | 4 |
Wells, Fractional Interest, Value (in Dollars) | 7,714 |
Due from Related Parties (in Dollars) | 3,050 |
Harry E. Hosmer, former president and former chief executive officer [Member] | |
NOTE 10 - RELATED PARTY TRANSACTIONS (Details) [Line Items] | |
Equity Method Investment, Ownership Percentage | 4.45% |
Number of Wells with Fractional Interest | 3 |
Wells, Fractional Interest, Value (in Dollars) | 9,985 |
Due from Related Parties (in Dollars) | 942 |
Related Party Transaction, Amounts of Transaction (in Dollars) | $13,805 |
NOTE_11_STOCK_COMPENSATION_PLA2
NOTE 11 - STOCK COMPENSATION PLAN (Details) (USD $) | 0 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | ||
Oct. 10, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2010 | Jan. 01, 2012 | Jan. 01, 2013 | |
NOTE 11 - STOCK COMPENSATION PLAN (Details) [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 140,000 | 35,000 | 0 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 35,000 | 0 | ||||
Share Price (in Dollars per share) | $2.11 | |||||
Allocated Share-based Compensation Expense (in Dollars) | $33,785 | |||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options (in Dollars) | 91,704 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares | 105,000 | |||||
Employee Stock Option [Member] | Options granted to each director and executive officer [Member] | ||||||
NOTE 11 - STOCK COMPENSATION PLAN (Details) [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 140,000 | 50,000 | ||||
Employee Stock Option [Member] | Share-based Compensation Award, Tranche One [Member] | ||||||
NOTE 11 - STOCK COMPENSATION PLAN (Details) [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 200,000 | |||||
Employee Stock Option [Member] | Share-based Compensation Award, Tranche Two [Member] | ||||||
NOTE 11 - STOCK COMPENSATION PLAN (Details) [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 200,000 | |||||
Employee Stock Option [Member] | 2014 Stock Options [Member] | ||||||
NOTE 11 - STOCK COMPENSATION PLAN (Details) [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 3 years | |||||
Employee Stock Option [Member] | 2010 Stock Options [Member] | ||||||
NOTE 11 - STOCK COMPENSATION PLAN (Details) [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 1 year | |||||
Employee Stock Option [Member] | ||||||
NOTE 11 - STOCK COMPENSATION PLAN (Details) [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 20,000 | 0 | 400,000 | |||
undefined (in Dollars per share) | 5 | 3.25 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 3 years | 0 years | 5 years | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period | 2 years | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date | 31-Dec-17 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | These options become exercisable at 5,000 shares per period beginning October 13, 2014, January 1, 2015, April 1, 2015 and July 1 2015. | |||||
Share-based Compensation (in Dollars) | $33,785 |
NOTE_11_STOCK_COMPENSATION_PLA3
NOTE 11 - STOCK COMPENSATION PLAN (Details) - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Abstract] | ||
Expected volatility | 81.33% | 0.00% |
Weighted-average volatility | 81.33% | 0.00% |
Expected dividends | 0.00% | 0.00% |
Expected term (months) | 39 years | 0 years |
Risk-free rate | 0.57% | 0.00% |
NOTE_11_STOCK_COMPENSATION_PLA4
NOTE 11 - STOCK COMPENSATION PLAN (Details) - Schedule of Share-based Compensation, Stock Options, Activity (USD $) | 0 Months Ended | 12 Months Ended | |
Oct. 10, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
Options | |||
Outstanding at Beginning of Year (in Shares) | 346,308 | 346,308 | |
Outstanding at Beginning of Year | $3.25 | $3.25 | |
Granted (in Shares) | 140,000 | 35,000 | 0 |
Granted | $5 | $0 | |
Exercised (in Shares) | 0 | 0 | |
Exercised | $0 | $0 | |
Forfeited (in Shares) | -100,000 | 0 | |
Forfeited | $0 | $0 | |
Outstanding at End of Year (in Shares) | 281,308 | 346,308 | |
Outstanding at End of Year | $3.47 | $3.25 | |
Options Exercisable at Year End (in Shares) | 281,308 | 346,308 | |
Options Exercisable at Year End | $3.47 | $3.25 | |
Weighted-average Fair Value of Options Granted During the Year | $0 | $0 |
NOTE_11_STOCK_COMPENSATION_PLA5
NOTE 11 - STOCK COMPENSATION PLAN (Details) - Schedule of Nonvested Restricted Stock Units Activity (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Non-vested Shares | ||
Non-vested at Beginning of Year | 0 | 0 |
Non-vested at Beginning of Year (in Dollars per share) | $0 | $0 |
Granted | 140,000 | 0 |
Granted (in Dollars per share) | $0.97 | $0 |
Reinstated | 0 | 0 |
Reinstated (in Dollars per share) | $0 | $0 |
Vested | 35,000 | 0 |
Vested (in Dollars per share) | $0.97 | |
Expired or Ineligible | 0 | 0 |
Expired or Ineligible (in Dollars per share) | $0 | $0 |
Non-vested at End of Year | 105,000 | 0 |
Non-vested at End of Year (in Dollars per share) | $0.97 | $0 |
NOTE_12_SIMPLE_IRA_PLAN_Detail
NOTE 12 - SIMPLE IRA PLAN (Details) (Pension Plan [Member], USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Pension Plan [Member] | ||
NOTE 12 - SIMPLE IRA PLAN (Details) [Line Items] | ||
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent | 3.00% | 3.00% |
Defined Contribution Plan, Cost Recognized | $47,081 | $49,846 |
NOTE_14_CONCENTRATIONS_OF_CRED1
NOTE 14 - CONCENTRATIONS OF CREDIT RISK (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
NOTE 14 - CONCENTRATIONS OF CREDIT RISK (Details) [Line Items] | ||
Cash, FDIC Insured Amount | 250,000 | $250,000 |
Cash, Uninsured Amount | 2,800,000 | $4,300,000 |
Customer A [Member] | Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | ||
NOTE 14 - CONCENTRATIONS OF CREDIT RISK (Details) [Line Items] | ||
Concentration Risk, Percentage | 81.00% |
NOTE_15_COMMITMENTS_AND_CONTIN1
NOTE 15 - COMMITMENTS AND CONTINGENCIES (Details) (Subsequent Event [Member], USD $) | 1 Months Ended |
Feb. 28, 2015 | |
Subsequent Event [Member] | |
NOTE 15 - COMMITMENTS AND CONTINGENCIES (Details) [Line Items] | |
Litigation Settlement, Amount | $20,000 |