Other Current Assets

12 Months Ended

Mar. 31, 2012

Notes to Financial Statements

Other Current Assets

2. Other Current Assets

Other current assets as of March 31, 2012 and 2011 consisted of the following:

	2012		2011
Lease and well equipment inventory	$	412,000	$	399,000
Drilling and completion cost prepayments		230,000		24,000
Prepaid insurance premiums		73,000		16,000
Prepaid income tax		—		81,000
Other current assets		34,000		19,000
Total other current assets	$	749,000	$	539,000

Lease and well equipment inventory included in other current assets represents well-site production equipment owned by us that has been removed from wells that we operate.  This occurs when we plug a well or replace defective, damaged or suspect equipment on a producing well.  In this case, salvaged equipment is valued at prevailing market prices, removed from the full cost pool and made available for sale.  This equipment is carried on the balance sheet at a value not to exceed the original carrying value established at the time it was placed in inventory.  This equipment is intended for resale to third parties at current fair market prices.  Sale of this equipment is expected to occur in less than one year.  This policy does not preclude us from further transferring serviceable equipment to other wells that we operate, on an as-needed basis.

Drilling and completion cost prepayments represent cash expenditures advanced by us to outside operators prior to the commencement of drilling and/or completion operations on a well.