2.4.0.80012 - Disclosure - 7. NOTES PAYABLEtruefalsefalse1false falsefalseFrom2013-01-01to2013-03-31http://www.sec.gov/CIK0001075773duration2013-01-01T00:00:002013-03-31T00:00:001true 1us-gaap_DebtDisclosureAbstractus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsexbrli:stringItemTypestringfalse0Debt Disclosure [Abstract]2false 2us-gaap_DebtDisclosureTextBlockus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00  As of March 31, 2013 and December 31, 2012 the Company had the following debt principal amounts outstanding:   <table cellspacing="0" cellpadding="0" style="font: 8pt Calibri, Helvetica, Sans-Serif; width: 100%; background-color: white"> <tr style="vertical-align: bottom"> <td style="line-height: 115%">Note</td> <td style="text-align: center; line-height: 115%"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%">3/31/2013</td> <td nowrap="nowrap" style="line-height: 115%"> </td> <td style="text-align: center; line-height: 115%"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%">12/31/2012</td> <td nowrap="nowrap" style="line-height: 115%"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 78%; line-height: 115%">Great 8 Lease note (original)</td> <td style="width: 1%; line-height: 115%"> </td> <td style="width: 1%; line-height: 115%">$</td> <td style="width: 8%; text-align: right; line-height: 115%">-</td> <td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td> <td style="width: 1%; line-height: 115%"> </td> <td style="width: 1%; line-height: 115%">$</td> <td style="width: 8%; text-align: right; line-height: 115%">211,494</td> <td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td></tr> <tr style="vertical-align: bottom"> <td style="line-height: 115%">11/14/11 Promissory Note</td> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="text-align: right; line-height: 115%">465,579</td> <td nowrap="nowrap" style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="text-align: right; line-height: 115%">120,239</td> <td nowrap="nowrap" style="line-height: 115%"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%">1/30/12 Promissory Note</td> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="text-align: right; line-height: 115%">150,000</td> <td nowrap="nowrap" style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="text-align: right; line-height: 115%">150,000</td> <td nowrap="nowrap" style="line-height: 115%"> </td></tr> <tr style="vertical-align: bottom"> <td style="line-height: 115%">8/12/12 Promissory Note</td> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="text-align: right; line-height: 115%">744,577</td> <td nowrap="nowrap" style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="text-align: right; line-height: 115%">746,071</td> <td nowrap="nowrap" style="line-height: 115%"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%">Converse Lease note</td> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="text-align: right; line-height: 115%">-</td> <td nowrap="nowrap" style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="text-align: right; line-height: 115%">258,368</td> <td nowrap="nowrap" style="line-height: 115%"> </td></tr> <tr style="vertical-align: bottom"> <td style="line-height: 115%">11/28/12 Promissory Note</td> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="text-align: right; line-height: 115%">110,000</td> <td nowrap="nowrap" style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="text-align: right; line-height: 115%">110,000</td> <td nowrap="nowrap" style="line-height: 115%"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%">12/11/12 Promissory Note</td> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="text-align: right; line-height: 115%">-</td> <td nowrap="nowrap" style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="text-align: right; line-height: 115%">37,120</td> <td nowrap="nowrap" style="line-height: 115%"> </td></tr> <tr style="vertical-align: bottom"> <td style="line-height: 115%">Great 8 Lease note (new lender)</td> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="text-align: right; line-height: 115%">300,000</td> <td nowrap="nowrap" style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="text-align: right; line-height: 115%">-</td> <td nowrap="nowrap" style="line-height: 115%"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%">Loan on Belize property</td> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="text-align: right; line-height: 115%">30,245</td> <td nowrap="nowrap" style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="text-align: right; line-height: 115%">14,435</td> <td nowrap="nowrap" style="line-height: 115%"> </td></tr> <tr style="vertical-align: bottom"> <td style="line-height: 115%">Equipment Loan</td> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="text-align: right; line-height: 115%">13,001</td> <td nowrap="nowrap" style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="text-align: right; line-height: 115%">13,001</td> <td nowrap="nowrap" style="line-height: 115%"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%">Belize 5% NRI</td> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="text-align: right; line-height: 115%">45,000</td> <td nowrap="nowrap" style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="text-align: right; line-height: 115%">-</td> <td nowrap="nowrap" style="line-height: 115%"> </td></tr> <tr style="vertical-align: bottom"> <td style="line-height: 115%">Total Debt Outstanding</td> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="text-align: right; line-height: 115%">1,858,402</td> <td nowrap="nowrap" style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="text-align: right; line-height: 115%">1,660,728</td> <td nowrap="nowrap" style="line-height: 115%"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="text-align: right; line-height: 115%"> </td> <td nowrap="nowrap" style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="text-align: right; line-height: 115%"> </td> <td nowrap="nowrap" style="line-height: 115%"> </td></tr> <tr style="vertical-align: bottom"> <td style="line-height: 115%">Debt Discount</td> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="text-align: right; line-height: 115%">(94,614</td> <td nowrap="nowrap" style="line-height: 115%">)</td> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="text-align: right; line-height: 115%">(111,816</td> <td nowrap="nowrap" style="line-height: 115%">)</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="text-align: right; line-height: 115%"> </td> <td nowrap="nowrap" style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="text-align: right; line-height: 115%"> </td> <td nowrap="nowrap" style="line-height: 115%"> </td></tr> <tr style="vertical-align: bottom"> <td style="line-height: 115%">Net Debt Outstanding</td> <td style="line-height: 115%"> </td> <td style="line-height: 115%">$</td> <td style="text-align: right; line-height: 115%">1,763,788</td> <td nowrap="nowrap" style="line-height: 115%"> </td> <td style="line-height: 115%"> </td> <td style="line-height: 115%">$</td> <td style="text-align: right; line-height: 115%">1,548,912</td> <td nowrap="nowrap" style="line-height: 115%"> </td></tr> </table>   See footnote 11 for information on notes payable to related parties.   None of our debts outstanding are contractually convertible. All conversions noted below were mutually agreed to between the lender and the Company which resulted in extinguishment accounting with gains or losses recorded based on the differences between the value of the shares issued compared to the debts relieved.   Promissory Note Issued for the Acquisition of the Great 8 lease (principal of $-0- and $211,494  as of March 31, 2013 and  December 31, 2012, respectively, and accrued interest of $-0- and $6,461 as of March 31, 2013 and December 31, 2012, respectively)   On May 31, 2011, we issued a promissory note in the amount of $692,539 for the Great 8 leases in Texas, the payment terms of which are: monthly payments including interest and principal with the final payment due on June 1, 2012. This note accrues interest at 5%.  During the quarter ended March 31, 2013, the Company paid off the note and accrued interest in full through borrowing from other lenders who the company is now indebted to for $275,000.  The difference was charged to interest expense. As an additional expense related to the original default on the former note payable, the Company transferred the Willingham lease and equipment to the former lender. The carrying value at the time of the disposition for the related lease and well equipment was $54,741 and the carrying value of the related asset retirement obligation was $1,700. The Company recorded a loss of $53,041 on this disposition.   Promissory Note Issued for Cash Deposit (principal of $465,579 and $120,239  as of March 31, 2013 and December 31, 2012, respectively, and accrued interest of $5,137 and $5,905 as of March 31, 2013 and December 31, 2012, respectively)   On November 14, 2011, we issued a promissory note in the amount of $150,000 in return for a cash advance. Stated interest on the loan is at 12% with quarterly payments starting March 31, 2012.  On February 26, 2013, an additional loan advance of $400,000 was received.   During the quarter, we converted some of this debt through issuances of stock.  A total of $62,500 of principal and interest was converted for 10,593,313 shares, resulting in a loss of $76,065.   Promissory Note Issued for Cash Deposit (principal of $150,000 as of March 31, 2013 and  December 31, 2012, respectively, and accrued interest of $27,500 and $77,500 as of March 31, 2013 and December 31, 2012, respectively)   On January 30, 2012, we issued a promissory note in the amount of $100,000 in return for a cash advance.  Payments are interest only at 5% per month for one year at which time the principal amount is due and payable.  This note is collateralized with 10,000,000 common shares of the Company. In the event the Company defaults on the note these shares would be owed to the lender. The agreement requires that the Company provide additional collateral if the fair value of the shares decreases below $200,000 while the note is outstanding. As of March 31, 2012 the value of the collateral exceeded $200,000.  At December 31, 2012, in accordance with the terms of the contract we added $50,000 to the note as a penalty for delinquent payments.  During the quarter ended March 31, 2013, $72,500 of accrued interest was converted for 12,598,360 shares valued at $144,228 resulting in a loss of $71,728.   Promissory Note Issued for Cash Deposit (principal of $744,577 and $746,071 as of March 31, 2013 and  December 31, 2012, respectively, and a discount of  $94,614 and $111,816  as of March 31, 2013 and December 31, 2012, respectively)   On August 12, 2012, we issued a promissory note in the amount of $750,000 in return for a cash advance.  Payments are structured to be paid at a rate of 7% of royalties earned on three of the East Texas leases, plus one-half (1/2) of the net income derived from those wells until the note is paid in full.  The note specifies that repayment must be completed within 24 months.   There is no stated interest rate on the note, however, the Company has assigned a 7% royalty interest to the lender that will continue after the note is paid in full.  The Company has recognized the royalty interest as a discount on the note for $137,620 and is amortizing it over a 24 month period.  Amortization of $17,203 and $25,803 was recognized for the three months ended March 31, 2013 and for the year ended December 31, 2012, respectively.  During the three months ended March 31, 2013, $1,494 of principal was repaid on this loan.   Promissory Note Issued for Purchase of property (principal of $-0- and $258,368 as of March 31, 2013 and  December 31, 2012, respectively, and accrued interest of $-0-  and $198 as of March 31, 2013and December 31, 2012, respectively)   On September 21, 2012, the Company purchased the Converse lease and issued a promissory note in the amount of $328,012.  The note requires two (2) $20,000 payments in October, 2012, and $20,000 per month thereafter.  Interest accrues at a rate of 7%.  As of December 31, 2012, the Company was in default by $2,500 on the December payment.  During the quarter ended March 31, 2013, the Company returned the property to the lender and was released from further obligations.  The carrying value on the Converse lease was zero and the debt relief and ARO were $258,566 and $166,882 resulting in a gain of $425,448.   Promissory Note Issued for Cash Deposit (principal of $ 110,000 and $110,000 as of March 31, 2013 and  December 31, 2012, respectively, and accrued interest of $3,327 and $1,009 as of March 31, 2013 and December 31, 2012, respectively)   On November 28, 2012 and December 31, 2012, we received $40,000 and $70,000 from the same lender.  Interest accrues at the rate of 12% per annum. This note is due with quarterly payments beginning on 2/28/13. Due to lack of payment on 2/28/13 this note was considered to be in default.   Promissory Note Issued for Cash Deposit (principal of $ -0- and $37,120 as of March 31, 2013 and  December 31, 2012, respectively, and accrued interest of $-0- and $0 as of March 31, 2013and December 31, 2012, respectively)   On December 11, 2012, we issued a note for a cash advance of $20,000.  The note bears an interest rate of 18%.  Per the terms, payment was due on December 21, 2012, after which, in addition to interest on the outstanding amount, the Company is obligated to issue 100,000 shares per day until it is paid in full.  As of December 31, 2012, we have accrued $100 in interest and $17,110 for the value of the stock that was due on that date.  The stock was priced at the closing price of the stock on each day of accrual.  During January 2013, a cash payment of $12,500 was made on this note, and on February 19, 2013, $65,100 was converted into 4,650,000 shares valued at $72,700 resulting in a $7,600 loss.  An additional gain of $45,914 was recognized for amounts forgiven by the holder with the extinguishment, resulting in a net gain with settlement of $38,314.   Promissory Note Issued for Cash Deposit (principal of $300,000 and $0, as of  March 31,2013 and December 31, 2012, respectively, and accrued interest of $-0- and $-0- as of March 31, 2013 and December 31, 2012, respectively)   On March 28, 2013, we issued a note for a cash advance of $300,000. $275,000 of the related proceeds from this note were used to pay off the aforementioned note in default relating to the Great 8 leases. The remaining $25,000 was received in cash. The note is collateralized with the Great 8 leases. The balance of this note is due on 7/1/13 or  when the leases are sold, whichever comes sooner.   Payable related to 5% NRI in Belize Well ($45,000 and $0 as of March 31, 2013 and December 31, 2012)   During the first quarter of 2013 the Company sold a 5% net revenue interest within the San Juan #3 well located within the Companys Belize lease for $45,000. The well is currently being drilled and is unproved at the time of this filing. The agreement entails that the Company return the $45,000 to the investor within 60 days if the well is considered to be a dry hole. Based on the uncertainty of the well at this time the $45,000 was accrued within debt as of March 31, 2013.   Equipment Loan ($13,001 as of March 31, 2013 and December 31, 2012)   On May 1, 2012, we purchased  wire-line truck for $73,101, and issued a promissory note for $67,101. The purchase was treated as a rent own agreement and in lieu of interest, rental payments of $9,138 was paid in 2012. As of December 31, 2012 and March 31, 2013 this note was in default.   Borrowing from Princess Entertainment for Belize interest ($30,245 and $14,435 as of March 31, 2013 and December 31, 2012)   During 2012 and 2013, Princess Entertainment, our concession partner in Belize has advanced us operating funds. There is no stated interest rate or terms on these advances. Imputed interest for these advances was considered to be immaterial. The balance is held as a current liability and is considered to be due upon demand.falsefalsefalsenonnum:textBlockItemTypenaThe entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 129 -Paragraph 2, 4 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 false0NOTES PAYABLEfalse7. NOTES PAYABLEUnKnownUnKnownUnKnownUnKnowntruefalsefalseNoteshttp://treatyenergy.com/role/NotesPayable12