Note 9 - Investment in Ecuador Property

12 Months Ended

Dec. 31, 2014

Investment Property Disclosure [Abstract]

Investment Property Disclosure [Text Block]

Note 9 — Investment in Ecuador Property

The Company has a 10% non-operating net profits interest in the Santa Elena Property, an oil and gas property in Ecuador. The Company accounts for this investment under the cost method and records its share of cash received as other income. Since the Company’s investment represents ownership of an oil and gas property, which is a depleting asset, the Company is amortizing the cost of the investment on a straight-line basis over the remaining term of the agreement, which expires in December 2029. 

Below is a summary reflecting the Company’s income from the investment in the Ecuador property for the year ended December 31, 2014, 2013 and 2012, respectively, and the investment in the Ecuador property at December 31, 2014 and 2013, respectively:

	Year Ended December 31,
	2014			2013			2012
	(in thousands)
Distributions received from investment in Ecuador property	$	250		$	250		$	250
Amortization of investment in Ecuador property		(33	)		(98	)		(188	)
Income from investment in Ecuador property, net	$	217		$	152		$	62

	December 31,		December 31,
	2014		2013
	(in thousands)
Investment in Ecuador property, net	$	501	$	534

In 2013, in order to extend the term of the contract from 2016 to 2029, the Consortium, which includes the Company and three other partners, agreed to additional work commitments to increase production in the Santa Elena field. The Company’s total share of this commitment over the remaining life of the contract is $4.8 million (the Company’s 10% non-operating net profits interest) which amount is due throughout the period of 2015 through 2028. This commitment is expected to be funded by cash on hand, cash generated from new production, or loans of the Consortium. If the Consortium does not have sufficient cash on hand, the Company may elect to make a cash contribution to the Consortium for its 10% share of the commitment. If the Company elects not to make its 10% share contribution of the commitment, it would lose its rights in the Consortium and the contract for the Santa Elena field.

In the fourth quarter of 2014, the Consortium incurred a loan for the additional work commitments to increase production in the Santa Elena field. The Consortium loan is to be paid with cash generated from the production of the Santa Elena Field. The Company’s total share of this loan would be $1.0 million (our 10% non-operating net profits interest) which amounts are due quarterly through the fourth quarter of 2017. If the Consortium does not have sufficient cash on hand, the Company would make a cash contribution to the Consortium for its 10% share of this loan.