15. Supplemental Oil and Gas Information (unaudited)

Information with respect to the Company's oil and gas producing activities is presented in the following tables. Estimates of reserves quantities, as well as future production and discounted cash flows before income taxes, were determined by LaRoche Petroleum Consultants Ltd. All of the Company's reserves were located in the United States.

Capitalized Costs Related to Oil and Gas Producing Activities

The table below reflects our capitalized costs related to our oil and gas producing activities at December 31, 2012 and 2011 (in thousands):


	Years Ended December 31,
		2013			2012
Proved oil and gas properties	$	45,101		$	43,351
Unproved properties		736			457
Total proved and unproved oil and gas properties	$	45,837		$	43,808

Less accumulated depreciation, depletion and amortization		(21,714	)		(19,108	)
Net oil and gas properties	$	24,123		$	24,700

Oil and Gas Related Costs

The following table sets forth information concerning costs incurred related to the Company's oil and gas property acquisition, exploration and development activities (in thousands):


	Years Ended December 31,
		2013		2012		2011
Property acquisitions proved	$	-	$	-	$	-
Property acquisitions unproved		488		188		-
Exploration cost		914		4,608		708
Development cost		998		2,649		8,278
Total	$	2,400	$	7,445	$	8,986

Results of Operations from Oil and Gas Producing Activities

The following table sets forth the Company's results of operations from oil and gas producing activities (in thousands):


	Years Ended December 31,
		2013			2012			2011

Revenues	$	15,325		$	19,885		$	16,862
Production costs and taxes		(4,854	)		(5,610	)		(5,310	)
Depreciation, depletion and amortization		(2,606	)		(3,044	)		(2,195	)
Income from oil and gas producing activities	$	7,865		$	11,231		$	9,357

In the presentation above, no deduction has been made for indirect costs such as general corporate overhead or interest expense. No income taxes are reflected above due to the Company's operating tax loss carry-forward position.

Estimated Quantities of Oil and Gas Reserves

The following table sets forth the Company's net proved oil and gas reserves and the changes in net proved oil and gas reserves for the years ended December 31, 2011, 2012 and 2013. All of the Company's proved reserves are located in the United States of America.


	Oil (MBbl)		Gas (MMcf)		MBOE
Proved reserves at December 31, 2010	2,496		27		2,500

Revisions of previous estimates	10		3		11
Improved recovery
Purchase of reserves in place
Extensions and discoveries	274		-		274
Production	(189	)	(26	)	(193	)
Sales of reserves in place

Proved reserves at December 31, 2011	2,591		4		2,592

Revisions of previous estimates	(337	)	61		(327	)
Improved recovery	-		-		-
Purchase of reserves in place	-		-		-
Extensions and discoveries	186		-		186
Production	(227	)	(43	)	(234	)
Sales of reserves in place	-		-		-

Proved reserves at December 31, 2012	2,213		22		2,217

Revisions of previous estimates	(153	)	16		(151	)
Improved recovery	-		-		-
Purchase of reserves in place	-		-		-
Extensions and discoveries	170		-		170
Production	(166	)	(38	)	(172	)
Sales of reserves in place	(24	)	-		(24	)

Proved reserves at December 31, 2013	2,040		-		2,040

Proved developed reserves at:
December 31, 2010	1,800		27		1,804
December 31, 2011	1,939		4		1,940
December 31, 2012	1,822		22		1,826
December 31, 2013	1,575		-		1,575

Proved undeveloped reserves at:
December 31, 2010	696		-		696
December 31, 2011	652		-		652
December 31, 2012	391		-		391
December 31, 2013	465		-		465

The Company's Proved Undeveloped Reserves at December 31, 2013 included 29 locations as compared to 23 locations at December 31, 2012. The future development cost related to the Company's Proved Undeveloped locations at December 31, 2013 was approximately $9.6 million. The Company intends to fund the drilling of these locations through operating cash flow and, as needed, supplement the funding by drawing on the Company's credit facility.

The following table identifies the reserve value by category and the respective present values, before income taxes, discounted at 10% as a percentage of total proved reserves (in thousands):


	Year Ended 12/31/13							Year Ended 12/31/12								Year Ended 12/31/11
		Oil		Gas		Total			Oil			Gas		Total			Oil			Gas		Total
Total proved reserves year-end
reserve report	$	47,856		-	$	47,856		$	53,906		$	5	$	53,911		$	69,748		$	15	$	69,763
Proved developed producing
reserves (PDP)	$	34,440		-	$	34,440		$	42,621		$	5	$	42,626		$	46,606		$	15	$	46,621
% of PDP reserves to total proved
reserves		72	%	-		72	%		79	%		-		79	%		67	%		-		67	%
Proved developed non-producing
reserves	$	4,868		-	$	4,868		$	3,234			-	$	3,234		$	3,977			-	$	3,977
% of PDNP reserves to total proved
reserves		10	%	-		10	%		6	%		-		6	%		6	%		-		6	%
Proved undeveloped reserves (PUD)
	$	8,548		-	$	8,548		$	8,051			-	$	8,051		$	19,165			-	$	19,165
% of PUD reserves to total proved
reserves		18	%	-		18	%		15	%		-		15	%		27	%		-		27	%

Standardized Measure of Discounted Future Net Cash Flows

The standardized measure of discounted future net cash flows from the Company's proved oil and gas reserves is presented in the following table (in thousands):


	Years Ended December 31,
		2013			2012			2011
Future cash inflows	$	183,801		$	194,941		$	229,366
Future production costs and taxes		(82,307	)		(82,069	)		(82,086	)
Future development costs		(11,162	)		(7,894	)		(12,611	)
Future income tax expenses		(18,910	)		(19,472	)		(34,750	)
Future net cash flows		71,422			85,506			99,919

Discount at 10% for timing of cash flows		(32,714	)		(40,152	)		(48,010	)
Standardized measure of discounted future net cash flows	$	38,708		$	45,354		$	51,909

The following are the principal sources of change in the standardized measure of discounted future net cash flows from the Company's proved oil and gas reserves (in thousands):


	Years Ended December 31,
		2013			2012			2011
Balance, beginning of year	$	45,354		$	51,909		$	48,344
Sales, net of production costs and taxes		(10,471	)		(14,275	)		(11,552	)
Discoveries and extensions, net of costs		4,047			6,967			10,923
Purchase of reserves in place		-			-			-
Sale of reserves in place		(767	)		-			-
Net changes in prices and production costs		(1,277	)		(6,067	)		15,428
Revisions of quantity estimates		(4,306	)		(9,883	)		343
Previously estimated development cost incurred during the year		3,149			8,760			5,346
Changes in future development costs		(1,392	)		(1,919	)		(1,109	)
Changes in production rates (timing) and other		368			(5,657	)		(2,336	)
Accretion of discount		4,593			6,223			4,376
Net change in income taxes		(590	)		9,296			(17,854	)
Balance, end of year	$	38,708		$	45,354		$	51,909

Estimated future net cash flows represent an estimate of future net revenues from the production of proved reserves using average sales prices, along with estimates of the operating costs, production taxes and future development and abandonment cost (less salvage value) necessary to produce such reserves. Future income taxes were calculated by applying the statutory federal and state income tax rates to pre-tax future net cash flows, net of the tax basis of the properties and utilizing available tax loss carryforwards related to oil and gas operations. The prices used for December 31, 2013, 2012, and 2011, were $90.11, $88.08, $88.53 per barrel of oil and $0.00, $2.76, $4.16, per MCF of gas, respectively. The Company's proved reserves as of December 31, 2013, 2012 and 2011 were measured by using commodity prices based on the twelve month unweighted arithmetic average of the first day of the month price for the period January through December. No deduction has been made for depreciation, depletion or any indirect costs such as general corporate overhead or interest expense.