10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2017

OR

¨  TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______.

Commission file number: 000-29219

VIKING ENERGY GROUP, INC.

(Formerly Viking Investments Group, Inc.)

(Exact name of registrant as specified in its charter)

Nevada	98-0199508
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

1330 Avenue of the Americas, Suite 23 A,

New York, NY 10019

(Address of principal executive offices)

(212) 653 0946

(Registrant’s telephone number, including area code)

_________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)    

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	¨	Accelerated Filer	¨
Non-Accelerated Filer	¨	Smaller Reporting Company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

APPLICABLE ONLY TO CORPORATE ISSUERS

As of May 10, 2017, the registrant had 59,455,134 shares of common stock outstanding.

VIKING ENERGY GROUP, INC.

Part I – Financial Information
Item 1	Financial Statements	3
	Consolidated Balance Sheets as of March 31, 2017 (unaudited) and December 31, 2016	3
	Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2017 and 2016 (unaudited)	4
	Consolidated Statements of Cash Flows for the three months ended March 31, 2017 and 2016 (unaudited)	5
	Consolidated Statements of Changes in Stockholders’ Deficit (unaudited)	6
	Notes to Consolidated Financial Statements (unaudited)	7
Item 2	Management’s Discussion and Analysis or Plan of Operation	20
Item 3	Quantitative and Qualitative Disclosures about Market Risk	24
Item 4	Controls and Procedures	24
Part II – Other Information
Item 1	Legal Proceedings	25
Item 2	Unregistered Sales Of Equity Securities And Use Of Proceeds	25
Item 3	Defaults Upon Senior Securities	26
Item 4	Mine Safety Disclosures	26
Item 5	Other Information	26
Item 6	Exhibits	27

2

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

VIKING ENERGY GROUP, INC.

Consolidated Balance Sheets

(Amounts expressed in US dollars)

	March 31,			December 31,
	2017			2016
	(unaudited)			(audited)
ASSETS
Current assets:
Cash	$	296,803		$	18,605
Accounts receivable – oil and gas		45,042			66,176
Other receivable – related party		76,939			76,939
Prepaid expenses		96,717			87,532
Total current assets		515,501			249,252
Oil and gas properties, full cost method
Proved developed producing oil and gas properties, net		1,741,265			1,765,373
Undeveloped and non-producing oil and gas properties, net		1,210,315			1,237,489
Total oil and gas properties, net		2,951,580			3,002,862
Long term investment		-			106,930
Derivative asset		5,843			-
TOTAL ASSETS	$	3,472,924		$	3,359,044
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accrued expenses and other current liabilities	$	183,949		$	179,421
Accounts payable		127,397			121,365
Derivative liability		771,493			1,136,894
Amount due to directors		1,176,792			1,072,576
Current portion of long term debt – net of debt discount		1,416,136			1,302,476
Total current liabilities		3,675,767			3,812,732
Long term debt - net of current portion and debt discount		1,537,879			1,579,469
Asset retirement obligation		841,854			833,017
TOTAL LIABILITIES		6,055,500			6,225,218
Commitments and contingencies (Note 7)
STOCKHOLDERS’ DEFICIT
Capital Stock
Preferred stock, $0.001 par value, 5,000,000 shares authorized, 28,092 shares issued and outstanding as of March 31, 2017 and December 31, 2016		28			28
Common stock, $0.001 par value, 100,000,000 shares authorized, 59,455,134 and 53,093,192 shares issued, issuable and outstanding as of March 31, 2017 and December 31, 2016 respectively.		59,455			53,093
Additional Paid-In Capital		12,731,294			11,526,847
Prepaid equity-based compensation		(404,324	)		(35,068	)
Accumulated other comprehensive loss		-			(1,446	)
Accumulated deficit		(14,969,029	)		(14,409,628	)
TOTAL STOCKHOLDERS’ DEFICIT		(2,582,576	)		(2,866,174	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	3,472,924		$	3,359,044

The accompanying notes are an integral part of these unaudited consolidated financial statements.

3

VIKING ENERGY GROUP, INC.

Consolidated Statements Of Operations And Comprehensive Loss

(Unaudited)

(Amounts expressed in US dollars)

	Three months ended,
	March 31,
	2017			2016
Revenue
Oil and gas sales	$	206,863		$	40,722
Operating expenses
Lease operating costs		160,518			40,984
General and administrative		270,341			120,195
Stock based compensation		347,404			165,555
Accretion - ARO		8,837			5,108
Depreciation, depletion and amortization		51,282			20,366
Total operating expenses		838,382			352,208
Loss from operations		(631,519	)		(311,486	)
Other income (expense)
Interest expense		(256,710	)		(431,707	)
Change in fair value of derivatives		336,013			(1,655,536	)
Loss on sale of investments		(7,185	)		-
Total other income (expense)		72,118			(2,087,243	)
Net loss before income taxes		(559,401	)		(2,398,729	)
Income tax expense		-			-
Net loss	$	(559,401	)	$	(2,398,729	)
Other comprehensive income (loss)
Unrealized gain (loss) on securities available-for-sale		1,446			(7,265	)
Net Comprehensive Loss	$	(557,955	)	$	(2,405,994	)
Loss per common share - Basic	$	(0.01	)	$	(0.06	)
Weighted average number of common shares outstanding – basic		56,766,673			37,741,400

The accompanying notes are an integral part of these unaudited consolidated financial statements.

4

VIKING ENERGY GROUP, INC.

Consolidated Statements of Cash Flows

(Unaudited)

(Amounts expressed in US dollars)

	Three Months Ended
	March 31,
	2017			2016
Cash flows from operating activities:
Net loss	$	(559,401	)	$	(2,398,729	)
Adjustments to reconcile net loss to cash used in operating activities:
Derivative (gain) loss		(336,013	)		1,655,536
Amortization of prepaid expenses		90,815			-
Stock based compensation		347,404			165,555
Loss on sale of investments		7,185			-
Depreciation, depletion and amortization		51,282			20,366
Accretion – Asset retirement obligation		8,837			5,108
Amortization of debt discount		178,153			387,723
Changes in operating assets and liabilities
Accounts receivable		21,134			(7,604	)
Accounts payable		6,032			(6,400	)
Accrued expenses and other current liabilities		21,433			61,791
Amounts due to directors		39,892			35,194
Net cash used in operating activities		(123,247	)		(81,460	)
Cash flows from investing activities:
Purchase of oil and gas properties		-			(1,350,000	)
Proceeds from sale of investments		101,191			-
Net cash provided by (used in) investing activities		101,191			(1,350,000	)
Cash flows from financing activities:
Proceeds from amount due to directors		3,900			-
Repayment of amount due to directors		(144,480	)		(35,775	)
Proceeds from sale of common stock		331,667
Proceeds from long term debt		331,667			1,480,000
Repayment of long term debt		(222,500	)		-
Net cash provided by financing activities		300,254			1,444,225
Net increase in cash		278,198			12,765
Cash, beginning of period		18,605			30,585
Cash, end of period	$	296,803		$	43,350
Supplemental Cash Flow Information:
Cash paid for:
Interest	$	67,136		$	-
Income taxes	$	-		$	-
Supplemental disclosure of Non-Cash Investing and Financing Activities:
Conversion of convertible note payable	$	-		$	6,778
Issuance of shares for oil and gas property acquisition	$	-		$	820,250
Issuance of warrants for 4,062,500 common shares as debt discount	$	-		$	416,315
Prepayment of contract through amounts due directors	$	100,000		$	-
Long term debt paid through amounts due directors	$	104,904		$	-
Issuance of shares for contract services	$	700,920		$	-
Sale of shares through satisfaction of unrelated notes payable	$	127,215		$	-
Accrued expenses exchanged for long term debt	$	9,500		$	-

The accompanying notes are an integral part of these unaudited consolidated financial statements.

5

VIKING ENERGY GROUP, INC.

Consolidated Statements of Changes in Stockholders’ Deficit

(Unaudited)

(Amounts expressed in US dollars)

															Additional			Prepaid			Accumulated  Other						Total
	Common Stock						Shares to be Issued				Preferred Stock				Paid-in			Equity-Based			Comprehensive			Accumulated			Stockholders'
	Number			Amount			Number		Amount		Number		Amount		Capital			Compensation			Loss			Deficit			Deficit
Balances at December 31, 2015		30,333,993		$	30,334			-	$	-		28,092	$	28	$	7,960,372		$	(145,562	)	$	(158,424	)	$	(8,964,441	)	$	(1,277,693	)
Shares issued in satisfaction of debt		300,926			301											9,810												10,111
Derivative liability adjustments - satisfaction of convertible debt																685,668												685,668
Shares issued for consulting services		1,315,000			1,315											164,185												165,500
Shares issued in acquisition of oil and gas properties		14,862,021			14,862											1,430,829												1,445,691
Shares issued as prepaid equity-based compensation		5,000,000			5,000											795,000			(800,000	)								-
Cancellation of shares issued as prepaid equity-based compensation		(4,000,000	)		(4,000	)										(636,000	)		640,000									-
Sale of stock		2,841,667			2,842											423,408												426,250
Capital issuance costs																(37,500	)											(37,500	)
Shares issued as payment for interest expense		1,931,250			1,931											324,444												326,375
Shares issued as additional discount on debt		508,335			508											75,742												76,250
Warrants issued for services																330,889												330,889
Amortization of prepaid equity-based compensation																			270,494									270,494
Unrealized gain (loss) on securities held for sale																						156,978						156,978
Net loss for the year ended December 31, 2016																									(5,445,187	)		(5,445,187	)
Balances at December 31, 2016		53,093,192		$	53,093			-	$	-		28,092	$	28	$	11,526,847		$	(35,068	)	$	(1,446	)	$	(14,409,628	)	$	(2,866,174	)
Shares issued for consulting services		62,500			63											12,437												12,500
Shares issued as prepaid equity-based compensation		3,240,000			3,240											700,920			(704,160	)								-
Sale of stock		3,059,442			3,059											455,858												458,917
Derivative liability adjustments - satisfaction of convertible debt																35,232												35,232
Amortization of prepaid equity-based compensation																			334,904									334,904
Unrealized gain (loss) on securities held for sale																						1,446						1,446
Net loss for the year ended March 31, 2017																									(559,401	)		(559,401	)
Balances at March 31, 2017		59,455,134		$	59,455			-	$	-		28,092	$	28	$	12,731,294		$	(404,324	)	$	-		$	(14,969,029	)	$	(2,582,576	)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

6

VIKING ENERGY GROUP, INC.

Notes to Consolidated Financial Statements

(Unaudited)

(Amounts expressed in US dollars)

Note 1 Nature of Business and Going Concern 

Viking Energy Group, Inc. (“Viking” or the “Company”) was incorporated under the laws of the State of Florida on May 3, 1989, as Sparta Ventures Corp. and remained inactive until June 27, 1998. After several name changes, the Company merged with and into a wholly-owned subsidiary, SinoCubate, Inc., which remained the surviving entity of the merger. SinoCubate, Inc. was formed in the State of Nevada on September 11, 2008. The merger resulted in a change of name of the Company from Synthenol Inc. to SinoCubate, Inc., and a change in the state of incorporation of the Company from Florida to Nevada. On June 13, 2012, the Company changed its name to Viking Investments Group, Inc., and the Company’s ticker symbol was changed to “VKIN.” On March 17, 2017, the Company changed its name to Viking Energy Group, Inc.

The Company's business plan is to engage in the acquisition, exploration, development and production of oil and natural gas properties, both individually and through collaborative partnerships with other companies in this field of endeavor. On March 8, 2016, the Company incorporated a wholly owned subsidiary, Viking Oil & Gas (Canada) ULC, in Alberta, Canada, to hold its Canadian oil and gas interests. In November of 2014, the Company entered into its first contract relative to oil and gas activities involving jointly controlled assets and related liabilities by purchasing an undivided 50% interest in the Joffre project located in Alberta, Canada. On February 23, 2016, the Company closed on the acquisition of working interests in four leases with access to the mineral rights (oil and gas) concerning approximately 281 acres of property in Miami and Franklin Counties in eastern Kansas. On August 30, 2016, the Company incorporated an additional wholly owned subsidiary, Mid-Con Petroleum, LLC (“Mid-Con”), in the State of Kansas to hold its current acquisitions in the central United States. On October 4, 2016, the Company, through Mid-Con, completed an acquisition whereby the Company (i) increased its working interest in three existing oil and gas leases in Miami and Franklin Counties in Eastern Kansas, and (ii) acquired a working interest in four new oil and gas leases in the same region, comprising approximately 660 acres of property.

These consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company had a net comprehensive loss of $557,955, and $2,405,994 for the three months ended March 31, 2017 and 2016, respectively. The Company has accumulated a stockholders’ deficit of $2,582,576 as of March 31, 2017. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party advances; however, there is no assurance of additional funding being available. These consolidated financial statements do not include any adjustments to the recorded assets or liabilities that might be necessary should the Company have to curtail operations or be unable to continue in existence.

Note 2   Summary of Significant Accounting Policies 

a) Basis of Presentation 

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto contained in Viking’s latest Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments (unless otherwise indicated), necessary for a fair presentation of the financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

7

b) Basis of Consolidation

The financial statements presented herein reflect the consolidated financial results of the Company and its wholly owned subsidiaries, Viking Oil & Gas (Canada) ULC, a Canadian corporation formed on March 8, 2016, to provide a base of operations for properties in Canada, and Mid-Con Petroleum, LLC, formed on August 30, 2016, to provide a base of operations for properties in the Central United States. All significant intercompany transactions and balances have been eliminated upon consolidation.

c) Use of Estimates in the Preparation of Financial Statements

The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts and timing of revenues and expenses, the reported amounts and classification of assets and liabilities, and disclosure of contingent assets and liabilities. The Company's actual results could vary materially from management's estimates and assumptions. Significant areas requiring the use of management estimates relate to the determination of expected tax rates for future income tax recoveries, stock-based compensation, embedded derivative liabilities, asset retirement obligations and impairment of long-lived assets.

The estimates of proved, probable and possible oil and gas reserves are used as significant inputs in determining the depletion of oil and gas properties and the impairment of proved and unproved oil and gas properties. There are numerous uncertainties inherent in the estimation of quantities of proved, probable and possible reserves and in the projection of future rates of production and the timing of development expenditures. Similarly, evaluations for impairment of proved and unproved oil and gas properties are subject to numerous uncertainties including, among others, estimates of future recoverable reserves and commodity price outlooks.

Actual results could differ from the estimates and assumptions utilized.

d) Financial Instruments 

ASC Topic 820-10, “Fair Value Measurement” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 820-10, defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for other receivable – related party, accrued expenses and other current liabilities, accounts payable, derivative liabilities, amount due to directors, and convertible notes each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

· Level 1: inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

·  Level 2: inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

· Level 3: inputs to the valuation methodology are unobservable and significant to the fair value measurement.

8

Assets and liabilities measured at fair value as of March 31, 2017 are classified below based on the three fair value hierarchy described above:

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Gains (Losses)
Financial Assets
Long term investment	$	-	$	-	$	-	$	1,446
Commodity Derivative		-		5,843		-		66,904
	$	-	$	5,843	$	-	$	68,350
Financial liabilities
Derivative liabilities	$	-	$	-	$	771,493	$	269,109
	$	-	$	-	$	771,493	$	269,109

Assets and liabilities measured at fair value as of December 31, 2016 are classified below based on the three fair value hierarchy described above:

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Gains (Losses)
Financial Assets
Long term investment	$	106,930	$	-	$	-	$	156,978
	$	106,930	$	-	$	-	$	156,978
Financial liabilities
Derivative liabilities	$	-	$	-	$	1,075,833	$	265,448
Commodity Derivative		-		61,061		-		(61,061	)
	$	-	$	61,061	$	1,075,833	$	204,387

The Company’s long term investment consisted of 1,437,500 common shares of Tanager Energy Inc., as of December 31, 2016, which is traded on the TSX Venture Exchange (Toronto Stock Exchange). During the three months ended March 31, 2017, the Company sold these shares. The change in the fair value of this investment that has been recognized as an unrealized gain in other comprehensive income on the statement of operations and comprehensive loss was $1,446 for the three months ended March 31, 2017, and $(7,265) for the three months ended March 31, 2016.

The Company had commodity financial derivatives in place at March 31, 2017. The Company does not designate its commodities derivative instruments as hedges and therefore does not apply hedge accounting. Changes in fair value of derivative instruments subsequent to the initial measurement are recorded as change in fair value on derivative liability, in other income (expense). The estimated fair value amounts of the Company’s commodity derivative instruments have been determined at discrete points in time based on relevant market information which resulted in the Company classifying such derivatives as Level 2. Although the Company’s commodity derivative instruments are valued using public indices, the instruments themselves are traded with unrelated counterparties and are not openly traded on an exchange.

9

The Company uses the Black-Scholes model to value its derivative liabilities. This model takes into account inputs such as contract terms, including maturity and market parameters, including assumptions associated with interest rates, volatility and credit worthiness. The embedded derivative assets and liabilities of the Company were $5,843 and $771,493 as of March 31, 2017, and $0 and $1,075,833 as of December 31, 2016, respectively. The change in the fair value of the derivative assets and liabilities for the three months ended March 31, 2017 consisted of an increase of $66,904 associated with commodity derivatives, a decrease in derivative liabilities of $304,341 associated with warrants and the conversion features of convertible debt, and a reduction of $35,232 associated with the satisfaction of certain convertible debt and a gain recognized in the statement of operations and comprehensive loss in the amount of $336,013.

e) Cash and Cash Equivalents 

Cash and cash equivalents include cash in banks and highly liquid investment securities that have original maturities of three months or less. At March 31, 2017 and December 31, 2016, the Company does not have any cash deposits in excess of FDIC insured limits.

f) Accounts receivable

Accounts receivable consist of oil and gas receivables. The Company has classified these as short-term assets in the balance sheet because the Company expects repayment or recovery within the next 12 months. The Company evaluates these accounts receivable for collectability and, when necessary, records allowances for expected unrecoverable amounts. The Company deems all accounts receivable to be collectable, and has not recorded any allowance for doubtful accounts.

g) Prepaid equity based compensation

Prepaid equity-based expenses represent amounts paid in advance through the issuance of restricted shares of stock, for future contractual benefits to be received. These expenses paid in advance are recorded as prepaid equity-based compensation as a component of “Stockholders’ Deficit” and then amortized to the statements of operations and comprehensive loss over the life of the contract using the straight-line method. At March 31, 2017 and December 31, 2016, the balances of the prepaid equity-based compensation were comprised of the following:

	March 31, 2017		December 31, 2016
In March 2016, three one-year consulting agreements with three unrelated parties for services related to the petroleum industry for a combined total amount of $800,000.		-		35,068
In January 2017, a six-month consulting agreement for services related to marketing and promotion of the Company on various platforms associated with the petroleum industry and the financial markets for a total amount of $660,000.		364,641		-
In February 2017, a one-year consulting agreement for services related to investor relations, market exposure and content development for a total amount of $44,160.		39,683
	$	404,324	$	35,068

h) Oil and Gas Properties

The Company uses the full cost method of accounting for its investment in oil and natural gas properties. Under this method of accounting, all costs associated with acquisition, exploration and development of oil and gas reserves, including directly related overhead costs, are capitalized. General and administrative costs related to production and general overhead are expensed as incurred.

All capitalized costs of oil and gas properties, including the estimated future costs to develop proved reserves, are amortized on the unit of production method using estimates of proved reserves. Disposition of oil and gas properties are accounted for as a reduction of capitalized costs, with no gain or loss recognized unless such adjustment would significantly alter the relationship between capitalized costs and proved reserves of oil and gas, in which case the gain or loss is recognized in operations. Unproved properties and major development projects are not amortized until proved reserves associated with the projects can be determined or until impairment occurs. If the results of an assessment indicate that the properties are impaired, the amount of the impairment is included in loss from continuing operations before income taxes and the adjusted carrying amount of the unproved properties is amortized on the unit-of-production method.

10

Depreciation, depletion and amortization expense utilizing the unit-of-production method for the Company’s oil and gas properties for the three months ended March 31, 2017 and 2016 were as follows:

Oil and Gas Properties by Geographical Cost Center
	Three months ended,
	March 31,
Cost Center	2017		2016
Canada	$	17,007	$	2,064
United States		34,275		18,302
	$	51,282	$	20,366

i) Limitation on Capitalized Costs

Under the full-cost method of accounting, we are required, at the end of each reporting date, to perform a test to determine the limit on the book value of our oil and natural gas properties (the “Ceiling” test). If the capitalized costs of our oil and natural gas properties, net of accumulated amortization and related deferred income taxes, exceed the Ceiling, this excess or impairment is charged to expense. The expense may not be reversed in future periods, even though higher oil and natural gas prices may subsequently increase the Ceiling. The Ceiling is defined as the sum of:

(a) the present value, discounted at 10 percent, and assuming continuation of existing economic conditions, of 1) estimated future gross revenues from proved reserves, which is computed using oil and natural gas prices determined as the unweighted arithmetic average of the first-day-of-the-month price for each month within the 12-month hedging arrangements pursuant to SAB 103, less 2) estimated future expenditures (based on current costs) to be incurred in developing and producing the proved reserves, plus

(b) the cost of properties not being amortized; plus

(c) the lower of cost or estimated fair value of unproven properties included in the costs being amortized, net of

(d) the related tax effects related to the difference between the book and tax basis of our oil and natural gas properties.

j) Oil and Gas Reserves

Reserve engineering is a subjective process that is dependent upon the quality of available data and the interpretation thereof, including evaluations and extrapolations of well flow rates and reservoir pressure. Estimates by different engineers often vary sometimes significantly. In addition, physical factors such as the results of drilling, testing and production subsequent to the date of an estimate, as well as economic factors such as changes in product prices, may justify revision of such estimates. Because proved reserves are required to be estimated using recent prices of the evaluation, estimated reserve quantities can be significantly impacted by changes in product prices.

k) Loss per Share

Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and, adjusted by any effects of warrants and options outstanding, if dilutive, that may add to the number of common shares during the period. At March 31, 2017 and 2016, there were 6,582,259 and 6,059,537 common stock equivalents respectively, that were anti-dilutive and were not included in the calculation.

l) Revenue Recognition 

All revenue is recognized when persuasive evidence of an arrangement exists, the service or sale is complete, the price is fixed or determinable and collectability is reasonably assured. Revenue is derived from the sale of crude oil and natural gas. Revenue from crude oil and natural gas sales is recognized when the product is delivered to the purchaser and collectability is reasonably assured. The Company follows the “sales method” of accounting for oil and natural gas revenue, so it recognizes revenue on all natural gas or crude oil sold to purchasers.

m) Comprehensive Loss

FASB ASC 220 “Comprehensive Income,” establishes standards for the reporting and presentation of comprehensive income and its components in the consolidated financial statements. For the three months ended March 31, 2017 and 2016, comprehensive income (loss) was $1,446 and $(7,265) respectively, and consisted primarily of unrealized gains and (losses) on available for sale securities.

n) Income Taxes

The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets likely. The Company did not incur any material impact to its financial condition or results of operations due to the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company is subject to U.S federal jurisdiction income tax examinations for the tax years 2007 through 2016. In addition, the Company is subject to state and local income tax examinations for the tax years 2007 through 2016.

11

o) Stock-Based Compensation 

The Company may issue stock options to employees and stock options or warrants to non-employees in non-capital raising transactions for services and for financing costs. In accordance with guidance in ASC Topic 718, the cost of stock options and warrants issued to employees and non-employees is measured on the grant date based on the fair value. The fair value is determined using the Black-Scholes option pricing model. The resulting amount is charged to expense on the straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period.

The fair value of stock warrants was determined at the date of grant using the Black-Scholes option pricing model. The Black-Scholes option model requires management to make various estimates and assumptions, including expected term, expected volatility, risk-free rate, and dividend yield. The expected term represents the period of time that stock-based compensation awards granted are expected to be outstanding and is estimated based on considerations including the vesting period, contractual term and anticipated employee exercise patterns. Expected volatility is based on the historical volatility of the Company’s stock. The risk-free rate is based on the U.S. Treasury yield curve in relation to the contractual life of stock-based compensation instrument. The dividend yield assumption is based on historical patterns and future expectations for the Company dividends.

The following table represents stock warrant activity as of and for the three months ended March 31, 2017:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
Warrants Outstanding – December 31, 2016		5,720,834		0.19		-		-
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited/expired/cancelled		-				-		-
Warrants Outstanding – March 31, 2017		5,720,834	$	0.19	5.0 years		$	-
Outstanding Exercisable – December 31, 2016		5,720,834	$	0.19	5.0 years		$	-
Outstanding Exercisable – March 31, 2017		5,720,834	$	0.19	5.0 years		$	-

p) Long-term Investment 

Management determines the appropriate classification of investment securities at the time of purchase. Securities are classified held-to-maturity when the Company has both the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are stated at amortized cost. Securities that are bought and held principally for the purpose of selling in the near term are classified as trading securities and reported at fair value, with unrealized gains and losses included in earnings. Securities not classified as held-to-maturity or trading are classified as available-for-sale. Available-for-sale securities are stated at fair value, the changes in the market value of available-for-sale securities, excluding other-than-temporary impairments, are reflected in Other Comprehensive Income, with the impairment losses, net of income taxes, charged to net income in the period in which it occurs.

The fair value of securities is based on quoted market prices. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities. A decline in the market value of any available-for-sale or held-for-maturity security below cost that is deemed to be other-then-temporary results in a reduction in carrying amount to fair value.

Impairments that are considered other-than-temporary are recognized as a loss in the consolidated statements of operations and comprehensive loss. The Company considers various factors in reviewing impairments, including the length of time and extent to which fair value has been less than the Company’s cost basis, the financial condition and near-term prospects of the issuer, and the Company’s intent and ability to hold the investments for a period of time sufficient to allow for any anticipated recovery in market value.

As of March 31, 2017, and December 31, 2016, the Company had no trading and held-to-maturity securities.

12

The Company’s long term investment consisted of 1,437,500 common shares of Tanager Energy Inc., as of December 31, 2016, which is traded on the TSX Venture Exchange (Toronto Stock Exchange). During the three months ended March 31, 2017, the Company sold these shares. The change in the fair value of this investment, recognized as an unrealized gain in other comprehensive income on the statement of operations and comprehensive loss was $1,446 and ($7,265) for the three months ended March 31, 2017 and 2016, respectively.

q) Impairment of long-lived assets 

In accordance with ASC 360, "Accounting for the Impairment or Disposal of Long-Lived Assets", the Company is required to review its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value.

Assets are grouped and evaluated at the lowest level for their identifiable cash flows that are largely independent of the cash flows of other groups of assets. The Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount of the asset to the future estimated cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds estimated expected undiscounted future cash flows, the Company measures the amount of impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is generally determined by using the asset's expected future discounted cash flows or market value. The Company estimates fair value of the assets based on certain assumptions such as budgets, internal projections, and other available information as considered necessary. There is no impairment of long-lived assets during the three months ended March 31, 2017 and 2016.

r) Foreign Currency Exchange 

An entity's functional currency is the currency of the primary economic environment in which it operates, normally that is the currency of the environment in which the entity primarily generates and expends cash. Management's judgment is essential to determine the functional currency by assessing various indicators, such as cash flows, sales price and market, expenses, financing and inter-company transactions and arrangements. The functional currency of the parent company is the U.S. Dollar. The reporting currency of the Company is the U.S. Dollar. The Company has oil and gas operations in Alberta, Canada in which the Canadian Dollar (“CAD” or “CS” herein) is the primary economic environment. The reporting currency of these consolidated financial statements is the U.S. Dollar.

For financial reporting purposes, the operational results of the Company's oil and gas operations in Canada are prepared using the CAD, and are translated into the Company's reporting currency, the U.S. Dollar. Revenue and expenses applicable to the oil and gas operations in Alberta, Canada are translated using average rates prevailing during each reporting period. Gains or losses resulting from the settlement of foreign currency transactions are recorded as a separate component of accumulated other comprehensive loss in stockholders' deficit when realized. There have been no settlement transactions that resulted in the recognition of a foreign currency exchange gain or loss during the three months ended March 31, 2017 and 2016.

s) Convertible Notes Payable

The Company accounts for conversion options embedded in convertible notes in accordance with ASC 815. ASC 815 generally requires companies to bifurcate conversion options embedded in convertible notes from their host instruments and to account for them as free standing derivative financial instruments.

The Company has evaluated the terms and conditions of its convertible notes under the guidance of ASC 815. The conversion feature did not meet the definition of “indexed to a company’s own stock” provided for in ASC 815 due to the down round protection feature. Therefore, the conversion feature requires bifurcation and liability classification. Additionally, the default put requires bifurcation because it is indexed to risks that are not associated with credit or interest risk. As a result, the compound embedded derivative comprises of (i) the embedded conversion feature and (i) the default put. Rather than bifurcating and recording the compound embedded derivative as a derivative liability, the Company elected to initially and subsequently measure the convertible note in its entirety at fair value, with changes in fair value recognized in earnings in accordance with ASC 815-15-25-4.

13

t) Derivative Liability

We review the terms of convertible debt issues to determine whether there are embedded derivative instruments, including embedded conversion options, which are required to be bifurcated and accounted for separately as derivative financial instruments. In circumstances where the host instrument contains more than one embedded derivative instrument, including the conversion option, that is required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument

Bifurcated embedded derivatives are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value reported as non-operating income or expense. When the equity or convertible debt instruments contain embedded derivative instruments that are to be bifurcated and accounted for as liabilities, the total proceeds received are first allocated to the fair value of all the bifurcated derivative instruments. The remaining proceeds, if any, are then allocated to the host instruments themselves, usually resulting in those instruments being recorded at a discount from their face value. The discount from the face value of the convertible debt, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to interest expense.

u) Accounting for Asset Retirement Obligations

Asset retirement obligations (“ARO”) primarily represent the estimated present value of the amount the Company will incur to plug, abandon and remediate its producing properties at the projected end of their productive lives, in accordance with applicable federal, state and local laws. The Company determined its ARO by calculating the present value of estimated cash flows related to the obligation. The retirement obligation is recorded as a liability at its estimated present value as of the obligation’s inception, with an offsetting increase to proved properties.

The following table describes the changes in the Company’s asset retirement obligations for the three months ended March 31, 2017 and the year ended December 31, 2016:

	Three months ended March 31, 2017		Year ended December 31, 2016
Asset retirement obligation – beginning	$	833,017	$	416,246
Oil and gas purchases		-		393,808
Accretion expense		8,837		22,963
Asset retirement obligation - ending	$	841,854	$	833,017

v) Recent Accounting Pronouncements

During the quarter ended March 31, 2017, there were several new accounting pronouncements issued by the Financial Accounting Standards Board. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements.

14

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). This standard provides a single set of guidelines for revenue recognition to be used across all industries and requires additional disclosures. It is effective for annual and interim reporting periods beginning after December 15, 2017. This standard permits early adoption and permits the use of either the retrospective or cumulative effect transition method. We are currently evaluating the potential impact of this standard on our financial position and results of operations, as well as our selected transition method. Based on our preliminary assessment, we believe the new standard will not have a material impact on our financial position and results of operations, as we do not expect to change the manner or timing of recognizing revenue on a majority of our revenue transactions.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This standard requires all leases that have a term of over 12 months to be recognized on the balance sheet with the liability for lease payments and the corresponding right-of-use asset initially measured at the present value of amounts expected to be paid over the term. Recognition of the costs of these leases on the income statement will be dependent upon their classification as either an operating or a financing lease. Costs of an operating lease will continue to be recognized as a single operating expense on a straight-line basis over the lease term. Costs for a financing lease will be disaggregated and recognized as both an operating expense (for the amortization of the right-of-use asset) and interest expense (for interest on the lease liability). This standard will be effective for our interim and annual periods beginning January 1, 2019, and must be applied on a modified retrospective basis to leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. We are currently evaluating the timing of adoption and the potential impact of this standard on our financial position, but we do not expect it to have a material impact on our results of operations.

w) Subsequent events

The Company has evaluated all subsequent events from March 31, 2017, through the date of filing this report, and determined there are no additional items to disclose other than those disclosed in Note 8 below.

Note 3  Related Party Transactions 

During April 2015, the Company made an advance to Tanager Energy Inc., in conjunction with a joint investment in the second oil well of the Joffre Project. As of March 31, 2017, the balance owed by Tanager to the Company is $153,877. The Company has determined to reserve 50% of the balance and has reduced the amount shown as other receivable – related party to $76,939 on the consolidated balance sheet.

During the three months ended March 31, 2017, the Company’s Executive Chairman and Director, Tom Simeo did not accrue payroll and made no advances to the Company. The Company paid a total of $20,000 against prior advances. Any accruals and advances do not bear interest, are unsecured and have no specific terms of repayment. As of March 31, 2017, the net amount due for prior accruals and expenses paid on behalf of the Company is $16,103. The Company has not imputed interest as the amount is deemed immaterial.

During the three months ended March 31, 2017, the Company’s CEO and Director, James Doris incurred expenses on behalf of, and made advances to the Company in the amount of $51,841 in order to provide the Company with funds to carry on its operations, and the Company made repayments of $124,480. These advances do not bear interest, are unsecured and have no specific terms of repayment. As of March 31, 2017, the amount due for advances and expenses paid on behalf of the Company is $298,299. The Company has not imputed interest as the amount is deemed immaterial. Additionally, during the three months ended March 31, 2017, Mr. Doris made several loans to the Company totaling $196,855, all accruing interest at 12%, and payable on demand. As of March 31, 2017, the total amount due to Mr. Doris for advances and expenses paid on behalf of the Company and loans is $1,160,689. Accrued interest of $97,235 is included in accrued expenses and other current liabilities at March 31, 2017.

15

Note 4 Oil and Gas Properties 

The following table summarizes the Company’s oil and gas activities by classification and geographical cost center for the three months ended March 31, 2017:

	December 31, 2016			Additions			Impairments		March 31, 2017
Proved developed producing oil and gas properties
Canada cost center	$	34,733		$	-		$	-	$	34,733
United States cost center		1,787,840			-			-		1,787,840
Accumulated depreciation, depletion and amortization		(57,200	)		(24,108	)		-		(81,308	)
Proved developed producing oil and gas properties, net	$	1,765,373		$	(24,108	)	$	-	$	1,741,265
Undeveloped and non-producing oil and gas properties
Canada cost center	$	371,481		$	-		$	-	$	371,481
United States cost center		917,184			-			-		917,184
Accumulated depreciation, depletion and amortization		(51,176	)		(27,174	)		-		(78,350	)
Undeveloped and non-producing oil and gas properties, net	$	1,237,489		$	(27,174	)	$	-	$	1,210,315
Total Oil and Gas Properties, Net	$	3,002,862		$	(51,282	)	$	-	$	2,951,580

The following table summarizes the Company’s oil and gas activities by classification for the year ended December 31, 2016:

	December 31, 2015			Adjustments			Impairments			December 31, 2016
Proved developed producing oil and gas properties
Canada cost center	$	33,082		$	1,651		$	-		$	34,733
United States cost center		-			2,838,943			(1,051,103	)		1,787,840
Accumulated depreciation, depletion and amortization		(2,093	)		(55,107	)		-			(57,200	)
Proved developed producing oil and gas properties, net	$	30,989		$	2,785,487		$	(1,051,103	)	$	1,765,373
Undeveloped and non-producing oil and gas properties
Canada cost center	$	518,269		$	(1,652	)	$	(145,136	)	$	371,481
United States cost center		-			1,456,414			(539,230	)		917,184
Accumulated depreciation, depletion and amortization		(32,788	)		(43,464	)		25,076			(51,176	)
Undeveloped and non-producing oil and gas properties, net	$	485,481		$	1,411,298		$	(659,290	)	$	1,237,489
Total Oil and Gas Properties, Net	$	516,470		$	2,092,625		$	(1,710,393	)	$	3,002,862

On February 23, 2016, with an effective date of February 1, 2016, the Company closed on the acquisition of working interests in four leases with access to the mineral rights (oil and gas) concerning approximately 281 acres of property in Miami and Franklin Counties in eastern Kansas. This project produces oil from the Cherokee formation at a depth of approximately 600 feet. The purchase includes an undivided interest in all oil and gas wells, equipment, fixtures and other personal property located upon the leased properties and used in connection with oil and gas operations upon the leases attributable to the working interests purchased by the Company.

16

As consideration for this transaction, the Company paid $1,350,000 plus 4,650,000 shares of common stock valued at $.085 per share, or $395,250.

The Company also purchased a 100% working interest (Net Revenue Interest of 83%) in certain Non-Producing Leases as follows: (i) three leases with access to the mineral rights (oil and gas) concerning approximately 270 acres of property in Miami and Franklin Counties in eastern Kansas; and (ii) 31 leases with access to the mineral rights (oil and gas) concerning approximately 5,500 acres of property in Cass and Bates Counties in Missouri. The purchase includes an undivided interest in all oil and gas wells, equipment, fixtures and other personal property located upon the leased properties and used in connection with oil and gas operations upon the leases attributable to the working interests purchased by Viking. As consideration for this transaction, Viking agreed to issue the vendors 5,000,000 shares of common stock valued at $.085 per share or $425,000.

To facilitate these acquisitions, the Company borrowed $1,625,000 from private lenders pursuant to a 15% Senior Secured Convertible Promissory Note (the "Note"), arranged through a licensed broker/dealer, with the primary terms of the loan being as follows: (i) Term – 6 months; (ii) Rate – 15% per annum; (iii) Security – 1^st ranking charge against company assets pursuant to a Security and Pledge Agreement (the "Security Agreement"); (iv) Conversion – the lenders have a right to convert all or part of the note into common stock of Viking at a price of $0.15 per share, subject to certain ownership restrictions; and (v) Warrants – the lenders were given an option to purchase, within the next 5 years, 4,062,500 shares of common stock of Viking at an exercise price of $0.20 per share pursuant to a Common Stock Purchase Warrant. Viking's CEO and director, James Doris, also personally guaranteed repayment of the loan and granted the lenders a security interest in his assets.

On October 4, 2016, the Company, through Mid-Con Petroleum, LLC, completed an acquisition whereby the Company (i) increased its working interest in three existing oil and gas leases in Miami and Franklin Counties in Eastern Kansas, and (ii) acquired a working interest in four new oil and gas leases in the same region, comprising approximately 660 acres of property.

As consideration for this transaction, the Company paid $920,857 plus 5,212,021 shares of common stock valued at $625,442.

Note 5 Capital Stock and Additional Paid-in Capital 

(a) Preferred Stock 

The Company is authorized to issue 5,000,000 shares of Preferred Stock, par value $0.001 per share (the “Preferred Stock”), of which 50,000 have been designated as Series C Preferred Stock (the “Series C Preferred Stock”).

Each share of Series C Preferred Stock entitles the holder to two thousand (2,000) votes on all matters submitted to a vote of the stockholders of the Company. In the event the Company shall at any time on or after the date that Preferred Stock has been issued declare or pay any dividend on common stock payable in shares of common stock, or effect a subdivision or combination or consolidation of the outstanding shares of common stock (by reclassification or otherwise than by payment of a dividend in shares of common stock) into a greater or lesser number of shares of common stock, then in each such case the number of votes per share to which holders of shares of Series C Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction of the numerator of which is the number of shares of common stock outstanding immediately after such event and the denominator of which is the number of shares of common stock that were outstanding immediately prior to such event.

Each share of Series C Preferred Stock shall be convertible, at the option of the holder, at any time after the date of issuance into one share of fully paid and non-assessable common stock.

(b) Common Stock 

The Company is authorized to issue 100,000,000 shares of common stock, par value $0.001 per share.

On January 12, 2016, the Company issued 300,926 common shares for convertible debt in the amount of $10,111.

17

On March 16, 2016, the Company issued 1,000,000 common shares for services, valued at $102,500.

On February 1, 2016, the Company authorized the issuance of 9,650,000 common shares as part of the consideration for the acquisition of the Oil and Gas properties made at that time.

On March 21, 2016, the Company executed a one year advisory services agreement requiring the issuance of 1,000,000 common shares for the contract. The shares are to be issued as 375,002 upon execution of the contract, with 56,818 shares being issued at the beginning of each month for the remaining eleven months.

As of April 29, 2016, the Company, pursuant to a securities purchase agreement, sold 1,250,000 shares of its common stock at $0.15 per share.

On August 18, 2016, the Company authorized the issuance of 156,250 common shares pursuant to an extension agreement on certain convertible notes that had become due.

On September 28, 2016, the Company issued 2,400,000 common shares, at the current market value of $288,000 as part of the consideration for the acquisition of the Oil and Gas Properties acquired on October 4, 2016.

During September 2016, the Company negotiated the payment of certain convertible notes, and committed to the issuance of 375,000 common shares at the current market value of $52,500 as additional interest.

As of September 30, 2016, the Company, pursuant to a securities purchase agreement, sold $1,337,500 shares of its common stock at $0.15 per share.

On October 4, 2016, the Company authorized the issuance of 2,752,021 common shares as part of the consideration for the acquisition of the Oil and Gas properties made at that time.

On October 4, 2016, the Company issued 60,000 common shares as part of the consideration for the acquisition of the Oil and Gas properties made at that time.

On October 21, 2016, the Company issued 1,400,000 common shares valued at $252,000 pursuant to an extension agreement on certain convertible notes that had become due.

On October 21, 2016, the Company sold 187,500 common shares, pursuant to a securities purchase agreement, at $0.15 per share.

During November 2016, the Company authorized the issuance of 508,335 common shares as additional discount on debt previously issued, and an amendment extending the due date of the debt.

On December 30, 2016, the Company sold 66,667 common shares pursuant to a securities purchase agreement, at $0.15 per share.

As of December 31, 2016, the Company, pursuant to a securities purchase agreement, sold $1,337,500 shares of its common stock at $0.15 per share.

As of December 31, 2016, the Company authorized the issuance of 315,000 common shares for services.

During January 2017, the Company issued 62,500 common shares for services.

On January 9, 2017, the Company issued 3,000,000 common shares upon the execution of a six-month services contract.

On January 25, 2017, the Company sold 333,333 common shares, pursuant to a securities purchase agreement, at $0.15 per share.

On February 16, 2017, the Company sold 666,666 common shares pursuant to a securities purchase agreement at $0.15 per share.

On March 23, 2017, the Company sold 2,059,443 common shares pursuant to a securities purchase agreement at $0.15 per share.

18

Note 6 Long Term Debt

Long term debt consisted of the following at March 31, 2017 and December 31, 2016:

	March 31, 2017			December 31, 2016
On February 19, 2016, the Company issued a total of $1,625,000 15% convertible notes with a term expiring August 18, 2016 (the “Maturity Date”). The principal amounts of each note and interest is payable on the maturity date. Placement fees of $145,000 were subtracted from proceeds. The notes are convertible into common stock at any time, at the holder’s option, the conversion price shall be the lowest of (i) $0.15, (ii) 58% of the price of the Company’s securities that are sold in any offering of the Company’s securities in excess of $100,000, of (iii) the conversion price of any Equity converted on or prior to the Conversion Date.		-			125,000
On April 29, 2016, the Company issued a total of $375,000 of 10% Secured Subordinated promissory notes with a term expiring January 12, 2017 (the “Maturity Date”), and an original issue discount of fifty percent (50%). Interest is payable on the outstanding principal of these notes at 10% per annum on the Maturity Date. The balance shown is net of unamortized discount of $8,824 at December 31, 2016.		-			366,176
On July 27, 2016, the Company issued a promissory note in the amount of $20,000, bearing interest at 12%, with an initial maturity date of August 27, 2016, and a provision for an extension of six additional terms of 30 days.					20,000
As of December 31, 2016, the Company issued a total of $630,000 of 10% Secured promissory notes with a term expiring April 3, 2017 (the “Maturity Date”), and an original issue discount of thirty-seven and one half percent (37.5%). The discount was modified to fifty percent (50%) retroactively with an extension of the maturity to June 2017. During the quarter ended March 31, 2017, the Company issued an additional $917,833 of 10% Secured promissory notes with terms expiring in June, August and September of 2017, and an original issue discount of fifty percent (50%). Interest is payable on the outstanding principal of these notes at 10% per annum on the various maturity dates. The balance shown is net of unamortized discount of $501,061 and $208,064 at March 31, 2017 and December 31, 2016 respectively.		1,046,772			421,936
On October 4, 2016, the Company issued a non-interest bearing note, payable on demand in the amount of $203,000.		203,000			203,000
On October 4, 2016, the Company closed on a revolver loan with Crossfirst Bank in the amount of $1,800,000, payable at $15,000 per month, interest at 10%, with all unpaid principal and accrued interest payable on September 30, 2018. The balance shown is net of unamortized discount of $20,758 and $24,167 at March 31, 2017 and December 31, 2016 respectively.		1,704,243			1,745,833
		2,954,015			2,881,945
Less current portion		(1,416,136	)		(1,302,476	)
	$	1,537,879		$	1,579,469

Note 7 Commitments and contingencies 

From time to time the Company may be a party to litigation matters involving claims against the Company. Management believes that there are no current matters that would have a material effect on the Company’s consolidated financial position or results of operations.

Note 8 Subsequent Events 

On April 18, 2017, the Company entered into a one-year consulting agreement for services, which requires the issuance of 250,000 common shares per quarter for the term of the contract. None of these shares have been issued as of the date of filing this report.

On May 4, 2017, the Company established an Advisory Board to assist Viking with identifying and evaluating acquisition and development opportunities, and authorized the issuance of 1,000,000 common shares. None of these shares have been issued as of the date of this report.

On May 4, 2017, the Company authorized the issuance of 421,667 common shares for services. None of these shares have been issued as of the date of this report.

19

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis in conjunction with the financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q. In preparing the management’s discussion and analysis, the registrant presumes that you have read or have access to the discussion and analysis for the preceding fiscal year.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This document includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 or the Reform Act. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earning, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions of performance; and statements of belief; and any statements of assumptions underlying any of the foregoing. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: our ability to raise capital and the terms thereof; ability to gain an adequate player base to generate the expected revenue; competition with established gaming websites; adverse changes in government regulations or polices; and other factors referenced in this Form 10-Q.

The use in this Form 10-Q of such words as “believes”, “plans”, “anticipates”, “expects”, “intends”, and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These forward-looking statements present the Company’s estimates and assumptions only as of the date of this Report. Except for the Company’s ongoing obligation to disclose material information as required by the federal securities laws, the Company does not intend, and undertakes no obligation, to update any forward-looking statements.

Although the Company believes that the expectations reflected in any of the forward-looking statements are reasonable, actual results could differ materially from those projected or assumed or any of the Company’s forward-looking statements. The Company’s future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties.

PLAN OF OPERATIONS

Overview

The Company's business plan is to engage in the acquisition, exploration, development and production of oil and natural gas properties, both individually and through collaborative partnerships with other companies in this field of endeavor. On March 8, 2016, the Company incorporated a wholly owned subsidiary, Viking Oil & Gas (Canada) ULC, in Alberta, Canada, to hold its Canadian oil and gas interests. In November of 2014, the Company entered into its first contract relative to oil and gas activities involving jointly controlled assets and related liabilities by purchasing an undivided 50% interest in the Joffre project located in Alberta, Canada. On February 23, 2016, the Company closed on the acquisition of working interests in four leases with access to the mineral rights (oil and gas) concerning approximately 281 acres of property in Miami and Franklin Counties in eastern Kansas. On August 30, 2016, the Company incorporated an additional wholly owned subsidiary, Mid-Con Petroleum, LLC (“Mid-Con”), in the State of Kansas to hold its current acquisitions in the central United States. On October 4, 2016, the Company, through Mid-Con, completed an acquisition whereby the Company (i) increased its working interest in three existing oil and gas leases in Miami and Franklin Counties in Eastern Kansas, and (ii) acquired a working interest in four new oil and gas leases in the same region, comprising approximately 660 acres of property.

20

Going Concern Qualification

The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party advances; however there is no assurance of additional funding being available.

RESULTS OF CONTINUING OPERATIONS

The following discussion of the financial condition and results of operation of the Company for the three months ended March 31, 2017 and 2016, should be read in conjunction with the audited consolidated financial statements and the notes thereto in the Company’s Form 10-K for the year ended December 31, 2016, filed with the SEC on April 17, 2017.

Liquidity and Capital Resources

As of March 31, 2017, and December 31, 2016, the Company had $296,803 and 18,605 in cash holdings, respectively.

Three months ended March 31, 2017, compared to the three months ended March 31, 2016

Revenue

The Company had gross revenues of $206,863 for the three months ended March 31, 2017, as compared to $40,722 for the three months ended March 31, 2017, representing its share of revenue from its 50% working interest in the Joffre Property and the revenue being generated through the oil and gas acquisitions in the central United States.

Expenses

The Company’s operating expenses increased by $486,174 to $838,382 for the three-month period ended March 31, 2017, from $352,208 in the corresponding period in 2016. The increase is mainly attributable to increased lease operating costs commensurate with increased production, an increase in general and administrative expenses, and a significant increase in stock-based compensation during the three-month period ended March 31, 2017, as compared to the three-month period ended March 31, 2016.

Other income (expense)

The Company had other income (expense) of $72,118 for the three months ended March 31, 2017, as compared to ($2,087,243) for the three months ended March 31, 2016. This increase in other income is a result of a reduced interest expense of $256,710 for the three months ended March 31, 2017, as compared to $431,707 for the three months ended March 31, 2016, offset by a derivative gain of $336,013 for the three months ended March 31, 2017, as compared to a derivative loss of $1,655,536 for the three months ended March 31, 2016.

Net Income (Loss)

The Company incurred a net loss of $559,401 during the three-month period ended March 31, 2017, compared with a net loss of $2,398,729 for the three-month period ended March 31, 2017. The decrease in net loss was mainly due to the items referred to in the analysis of operating expenses and other income (expense).

21

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

We prepare our financial statements in conformity with GAAP, which requires management to make certain estimates and assumptions and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the financial statements are prepared and actual results could differ from our estimates and such differences could be material. Due to the need to make estimates about the effect of matters that are inherently uncertain, materially different amounts could be reported under different conditions or using different assumptions. On a regular basis, we review our critical accounting policies and how they are applied in the preparation of our financial statements, as well as the sufficiency of the disclosures pertaining to our accounting policies in the footnotes accompanying our financial statements. Described below are the most significant policies we apply in preparing our consolidated financial statements, some of which are subject to alternative treatments under GAAP. We also describe the most significant estimates and assumptions we make in applying these policies. See “Note 2 - Summary of Significant Accounting Policies” to our consolidated financial statements.

Oil and Gas Property Accounting

The Company uses the full cost method of accounting for its investment in oil and natural gas properties. Under this method of accounting, all costs of acquisition, exploration and development of oil and natural gas properties (including such costs as leasehold acquisition costs, geological expenditures, dry hole costs, tangible and intangible development costs and direct internal costs) are capitalized as the cost of oil and natural gas properties when incurred.

The full cost method requires the Company to calculate quarterly, by cost center, a "ceiling," or limitation on the amount of properties that can be capitalized on the balance sheet. To the extent capitalized costs of oil and natural gas properties, less accumulated depletion and related deferred taxes exceed the sum of the discounted future net revenues of proved oil and natural gas reserves, the lower of cost or estimated fair value of unproved properties subject to amortization, the cost of properties not being amortized, and the related tax amounts, such excess capitalized costs are charged to expense.

Proved Reserves

Estimates of our proved reserves included in this report are prepared in accordance with U.S. SEC guidelines for reporting corporate reserves and future net revenue. The accuracy of a reserve estimate is a function of:

i. the quality and quantity of available data;

ii. the interpretation of that data;

iii. the accuracy of various mandated economic assumptions; and

iv. the judgment of the persons preparing the estimate.

22

Our proved reserve information included in this report was predominately based on estimates. Because these estimates depend on many assumptions, all of which may substantially differ from future actual results, reserve estimates will be different from the quantities of oil and gas that are ultimately recovered. In addition, results of drilling, testing and production after the date of an estimate may justify material revisions to the estimate.

In accordance with SEC requirements, we based the estimated discounted future net cash flows from proved reserves on the unweighted arithmetic average of the prior 12-month commodity prices as of the first day of each of the months constituting the period and costs on the date of the estimate.

The estimates of proved reserves materially impact depreciation, depletion, amortization and accretion (“DD&A”) expense. If the estimates of proved reserves decline, the rate at which we record DD&A expense will increase, reducing future net income. Such a decline may result from lower market prices, which may make it uneconomic to drill for and produce from higher-cost fields.

Asset Retirement Obligation

Asset retirement obligations (“ARO”) primarily represent the estimated present value of the amount we will incur to plug, abandon and remediate our producing properties at the projected end of their productive lives, in accordance with applicable federal, state and local laws. We determined our ARO by calculating the present value of estimated cash flows related to the obligation. The retirement obligation is recorded as a liability at its estimated present value as of the obligation’s inception, with an offsetting increase to proved properties. Periodic accretion of discount of the estimated liability is recorded as accretion expense in the accompanying consolidated statements of operations and comprehensive income.

ARO liability is determined using significant assumptions, including current estimates of plugging and abandonment costs, annual inflation of these costs, the productive lives of wells and a risk-adjusted interest rate. Changes in any of these assumptions can result in significant revisions to the estimated ARO.

Revenues from oil and gas properties are recognized under the entitlements method of accounting, whereby revenue is recognized on the amount the Company is entitled to, based on its interest in the property after all costs associated with exploration, gathering, marketing and sales relative to the volumes of product sold.

Although these estimates are based on management’s knowledge of current events and actions the Company may undertake in the future, the final results may ultimately differ from actual results. Certain accounting policies involve significant judgments and assumptions, which have a material impact on the Company’s financial condition and results. Management believes its critical accounting policies reflect its most significant estimates and assumptions used in the presentation of the Company’s financial statements. The Company does not have off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities.”

23

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, the Company is not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company does not currently maintain controls and procedures that are designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act are recorded, processed, summarized, and reported within the time periods specified by the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of management, including the Company’s Chief Executive Officer, the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2017, have been evaluated, and, based upon this evaluation, the Company’s Chief Executive Officer has concluded that these controls and procedures are not effective in providing reasonable assurance of compliance.

Changes in Internal Control over Financial Reporting

Management and directors will continue to monitor and evaluate the effectiveness of the Company's internal controls and procedures and the Company's internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow. There were no changes in Internal Control over Financial Reporting during the quarter ended March 31, 2017.

24

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. As of March 31, 2017, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of operations.

ITEM 1A. RISK FACTORS

As a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, the Company is not required to provide the information under this item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

On January 12, 2016, the Company issued 300,926 common shares for convertible debt in the amount of $10,111.

On March 16, 2016, the Company issued 1,000,000 common shares for services, valued at $40,000.

On February 1, 2016, the Company authorized the issuance of 9,650,000 common shares as part of the consideration for the acquisition of the Oil and Gas investment made at that time.

On March 21, 2016, the Company executed two one-year consulting agreements with third parties requiring the issuance of 2,000,000 common shares for each contract.

On March 21, 2016, the Company executed a one-year advisory services agreement requiring the issuance of 1,000,000 common shares for the contract. The shares are to be issued as 375,002 upon execution of the contract, with 56,818 shares being issued at the beginning of each month for the remaining eleven months.

As of April 29, 2016, the Company, pursuant to a securities purchase agreement, sold 1,250,000 shares of its common stock at $0.15 per share.

On September 28, 2016, the Company issued 2,400,000 common shares, at the current market value of $288,000 as a portion of the purchase price of additional oil and gas properties acquired on October 4, 2016.

During September 2016, the Company negotiated the payment of certain convertible notes, and committed to the issuance of 375,000 common shares at the current market value of $52,500 as additional interest.

As of September 30, 2016, the Company, pursuant to a securities purchase agreement, sold $1,337,500 shares of its common stock at $0.15 per share.

On October 4, 2016, the Company authorized the issuance of 2,752,021 common shares as part of the consideration for the acquisition of the Oil and Gas properties made at that time.

On October 4, 2016, the Company issued 60,000 common shares as part of the consideration for the acquisition of the Oil and Gas properties made at that time.

On October 21, 2016, the Company issued 1,400,000 common shares valued at $252,000 pursuant to an extension agreement on certain convertible notes that had become due.

25

On October 21, 2016, the Company sold 187,500 common shares, pursuant to a securities purchase agreement, at $0.15 per share.

During November 2016, the Company authorized the issuance of 508,335 common shares as an additional discount on debt previously issued, and an amendment extending the due date of the debt.

On December 30, 2016, the Company sold 66,667 common shares pursuant to a securities purchase agreement, at $0.15 per share.

As of December 31, 2016, the Company, pursuant to a securities purchase agreement, sold $1,337,500 shares of its common stock at $0.15 per share.

As of December 31, 2016, the Company authorized the issuance of 315,000 common shares for services.

During January 2017, the Company issued 62,500 common shares for services.

On January 9, 2017, the Company issued 3,000,000 common shares upon the execution of a six-month services contract.

On January 25, 2017, the Company sold 333,333 common shares, pursuant to a securities purchase agreement, at $0.15 per share.

On February 16, 2017, the Company sold 666,666 common shares pursuant to a securities purchase agreement at $0.15 per share.

On March 23, 2017, the Company sold 2,059,443 common shares pursuant to a securities purchase agreement at $0.15 per share.

The issuance described above for conversion of debt on January 12, 2016, was made in reliance on the exemptions from registration provided by Section 3(a)(9) and 4(a)(2) of the Securities Act as the common stock was issued in exchange for debt securities of the Company held by the shareholder, there was no additional consideration for the exchange, there was no remuneration for the solicitation of the exchange, there was no general solicitation, and the transactions did not involve a public offering. The other securities identified in this Item were originally issued pursuant to exemptions from registration requirements relying on Section 4(a)(2) of the Securities Act of 1933 and upon Rule 506 of Regulation D of the Securities Act of 1933 as there was no general solicitation, and the transactions did not involve a public offering.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

26

ITEM 6. EXHIBITS

Number	Description
3.1	Articles of Incorporation (incorporated by reference to our Definitive Information Statement on Schedule 14C filed on October 14, 2008)
3.2	Bylaws (incorporated by reference to our Definitive Information Statement on Schedule 14C filed on October 14, 2008)
3.3	Certificate of Amendment to Articles of Incorporation (incorporated by reference to our Definitive Information Statement on Schedule 14C filed on May 23, 2012)
10.1	Purchase and Sale, Petroleum and Natural Gas Conveyance Agreement with Tanager Energy Inc. dated November 3, 2014 (incorporated by reference to our Current Report on Form 8-K filed on November 10, 2014)
10.2	Purchase, Sale and Capital Contribution Agreement (incorporated by reference to our Annual Report on Form 10-K/A filed on May 16, 2016)
10.3*	Purchase, Sale and Capital Contribution Agreement
10.4*	Purchase, Sale and Capital Contribution Agreement
10.5*	Purchase, Sale and Capital Contribution Agreement
10.6*	Purchase, Sale and Capital Contribution Agreement
10.7*	Acknowledgment and Agreement
31.1*	Certification of Principal Executive Officer required by Rule 13a-14(1) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Principal Financial Officer required by Rule 13a-14(1) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 of 18 U.S.C. 63
32.2*	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 of 18 U.S.C. 63
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

_______

* Filed herewith.

ITEM 7. OFF BALANCE-SHEET ARRANGEMENTS

None.

27

SIGNATURES

In accordance with the requirements of Section 13 or 15(d) of the Securities Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

VIKING ENERGY GROUP, INC. (Registrant)
By:	/s/ James Doris	Date: May 15, 2017
	Principal Executive Officer

In accordance with the Securities Exchange Act this report has been signed below by the following person(s) on behalf of the registrant and in the capacities and on the dates indicated.

By:	/s/ Tom Simeo	Date: May 15, 2017
	Principal Financial and Accounting Officer

28

EX-10.3

EXHIBIT 10.3 

PURCHASE, SALE AND CAPITAL CONTRIBUTION AGREEMENT

Seller:	Global Equity Funding, LLC a Kansas limited liability company 13901 Conser Apt. 1607 Overland Park, KS 66223
Buyer:	Viking Investments Group, Inc. a Nevada Corporation 1330 Avenue of the Americas, Suite 23A New York, NY 10019

Purchase Price:	$400,000 (cash component)	Closing Date:	February 9th, 2016
	1,200,000 common shares of Viking (stock component)

1. CONSIDERATION. The supporting consideration for this Agreement will be the exchange of the Purchase Price for the Property and the agreement to make capital contributions to Seller, and the mutual covenants and agreements contained herein. The Parties stipulate and agree that said consideration is sufficient to support this Agreement.

2. SALE OF PROPERTY. Seller owns a certain working interest in and to the oil and gas leases described on Exhibit 'A' attached hereto and incorporated herein by reference (the "Leases"). Seller shall sell, transfer, convey and deliver to Buyer at closing, and Buyer shall purchase and acquire at closing: (a) a percentage of working interest in and to the Leases sufficient so as to transfer to the Buyer as of the closing existing production equivalent to 8 barrels per day (the "Working Interests"); and (b) the undivided interest in and to all oil and gas wells, equipment, fixtures and other personal property located upon the Leases and used in connection with oil and gas operations upon the Leases attributable to the Working Interests being purchased by Buyer; The property sold and to be conveyed hereby as hereinabove described may hereinafter be referred to collectively as the "Property."

3. PURCHASE PRICE. In exchange for the Property, the Buyer agrees to:

(a)

Execute and deliver to the Seller a Promissory Note dated effective as of the closing date and evidencing a debt of the Buyer to the Seller on the following terms: (i) Principal Amount: $400,000; (ii) Repayment: (a) the date on which the Buyer completes a financing transaction to facilitate the repayment of a $1,500,000 bridge loan expected to be secured by the Buyer on or about February 10th, 2016 (the “Bridge Loan”), provided there are surplus funds to do so; or (b) 30 days after repayment of the Bridge Loan; (iii) Other – other than to repay the Bridge Loan, the Buyer shall not, without the Seller’s prior written consent, obtain financing to facilitate additional acquisitions until the Buyer’s indebtedness to the Seller is paid in full; and (iv) Adjustment – the Purchase Price shall be adjusted Purchase Price shall be adjusted pro rata, or, Seller shall provide additional leases, if the production transferred to the Buyer is not equal to 8 barrels per day; and

(b)

Issue one million two hundred thousand (1,200,000) shares of common stock in Buyer which are currently valued at $0.10 per share being traded under the trading symbol VKIN (the “Shares”).

4. ASSIGNMENT FORM. Seller shall at closing execute an assignment conveying to Buyer the stated working interest in and to the Leases. Said Assignment shall be in the form attached hereto as Exhibit 'C.'

5. CLOSING. Closing shall be on or before February 9, 2016 at a time and place mutually agreeable to Buyer and Seller. This transaction shall be made effective as of 12:01 a.m. on the Closing Date (the "Effective Time"). At closing Buyer shall delivery the Promissory Note, and shall deliver the agreed upon common stock of Buyer to Seller and Seller shall deliver the fully executed Assignment and Bill of Sale.

6. DUE DILIGENCE PERIOD. Buyer may perform any inspections or commission any studies or evaluations of the Property at Buyer's sole cost and expense as part of its due diligence prior to Closing. Such due diligence shall include but not be limited to reservoir studies, title work, surveying, or appraisal.

 

1

7. NO BUSINESS RELATIONSHIP. Nothing in this Agreement will be deemed, held, or construed to make either party a partner or associate of the other in the operation of the Leases, or to render either party liable for any debts, liabilities, or obligations incurred by the other party. It is expressly understood and agreed that the relationship between the parties hereto will always be that of vendor and vendee except pursuant to the JOA’s pursuant to Paragraph 16 herein.

8. SELLERS RETENTION. Seller or its agent shall continue to operate and produce the Leases until Closing. Seller shall retain all production from said operations prior to closing and shall pay all expenses and liabilities to the date of closing. All continuing services such as utilities, pumper fees and related expenses shall become on the date of closing Buyer’s liability.

9. TIME IS OF THE ESSENCE. It is very important to the Parties that this sale is performed in a prudent and timely manner. Time is of the essence, thus all things which are required to be done by certain dates must be done, otherwise such failure shall be deemed a material default. If either party breaches this agreement the non-breaching party may elect to declare this null and void and all right of the defaulting party hereunder shall terminate. If the non-breaching party does not exercise its option to terminate this agreement, said non-breaching party may require specific performance and also exercise any other legal rights and remedies available to it, and said non-breaching party shall be entitled to recover from the breaching party its cost, expenses and attorney fees incurred in enforcing the terms of this agreement or pursuing a remedy as a result of the breach of this agreement.

10. POSSESSION AT CLOSING. Possession of the Property shall be on the date of closing and Seller shall have any risk of casualty loss prior to said date, and Buyer the risk of casualty loss on and after that date. Buyer shall be permitted to come upon the Leases to make such inspections of the Property as it may reasonably desire. Nothing shall be removed from the Leases while making such inspections and respect must be paid to the landowner rights.

11. TAXES. All property, ad valorem, severance or other taxes assessed against the Property shall be prorated as of the closing. All such taxes which are currently due or payable shall be paid by Seller prior to closing. Buyer will bear all applicable sales or similar taxes imposed by any state, county, municipal or other governmental entity as a result of this sale.

12. SELLERS' REPRESENTATIONS AND WARRANTIES. This Agreement is made and entered into based upon the belief that the following representations made by Seller is true and will continue to be true as of the date of closing:

a. Title. Seller owns the interest in and to the Property which is to be transferred to Buyer at closing. The title to the Property is such that upon purchase by Buyer, the title to the Property will be free of any encumbrances. "Encumbrances" shall mean any, liens, mortgages, security interests, unitization agreements, pooling agreements, orders to plug wells, penalties for overproduction, or production curtailment orders.

b. Authority to Enter Into This Agreement. (i) Seller has the authority to enter into this Agreement; (ii) its signatories have been properly authorized to enter into this Agreement (including the execution and delivery of any other agreement (including with respect to any JOA or Assignment, on the date of that JOA or Assignment), document, certificate, or instrument contemplated by this Agreement as to be executed and delivered by Sellers) and to perform all of the covenants and agreements contained herein; (iii) Seller is not a party to, subject to, or bound by any agreement or instrument or any statute, regulation, judgment, or decree of any court or governmental body which could at the date of the Closing prevent the performance of any of Sellers' obligations under this Agreement or adversely affect Buyer's Interests obtained in the Property; (iv) to the extent not disclosed, there are no other contracts or agreements relating to the Property; and (v) all suppliers, contractors and subcontractors who have supplied labor or materials upon the Leases have been fully paid.

c. Warranty. Seller warrants that no act or omission by it or any of its agents or employees could give rise to an action or claim of any kind relating to the Property, the operator of the Leases, or to impair the title to the same. The terms "action or claim" as used in this paragraph shall mean any action in tort, contract or regulatory agency claim, by any person or entity.

d. Production. Seller warrants that they are not aware of any facts or circumstances which would cause such production to decline at rates greater than normal and customary decline rates for the Working Interests, and Seller agrees to provide current run tickets for all of the Leases to the Buyer within 5 business days of the execution hereof and prior to the Closing Date..

e. Brokers' Fees. Seller has not incurred any liability, contingent or otherwise, for brokers' or finders' fees relating to the transactions contemplated by this Agreement for which Buyer, any of its affiliates, or any of Buyer's interests in the Property shall have any liability.

 

2

The terms of this paragraph shall survive closing and shall not merge with the assignment and bill of sale executed by Seller and delivered to Buyer at closing. If it is determined at any time prior to closing that any of the above representations is not true or that there is a substantial likelihood that any of the above representations are not true, Buyer shall have the right to cancel this Agreement. Notwithstanding anything to the contrary herein, all representations by Seller shall be treated as if each Seller is making said representation insofar as it relates to the portion of the Property currently owned by said Seller. Under no circumstances shall any Seller be liable for any breach of representation or warranty by any other Seller, and the Seller shall not be jointly and severally liable for any warranty or representation contained herein or in the assignment and bill of sale that is executed and delivered at closing.

13. WARRANTIES BY SELLERS. In the event Buyer ultimately purchases the Leases and related property, Seller warrants that all the "Representations by Sellers" contained in paragraph 12 of this Contract are true and in the event that it is ever determined a representation is not true, Seller will, at Buyer's election, either (1) take the necessary remedial action to make the situation consistent with Sellers's representation plus pay to Buyer the difference between the Property as represented and the value of the Property once the problem is identified and remedied; or (2) pay to Buyer an amount equal to the cost of remedying the problem plus the difference between the Property as represented and the value of the Property once the problem is identified and remedied. In addition, Seller shall indemnify Buyer against all actual losses and damages sustained as a result of such breach of Seller's warranty. The terms of this paragraph shall survive closing and shall not merge with the assignment and bill of sale executed by Seller and delivered to Buyer at closing.

14. BUYER'S REPRESENTATIONS AND WARRANTIES. This Agreement is made and entered into based upon the belief that the following representations made by Seller is true and will continue to be true as of the date of closing:

a. Buyer's Stock. The shares of common stock to be transferred to Seller at Closing represent unimpaired shares of common stock in and to Buyer, which are currently valued at $0.10 per share and are traded under the trading symbol VKIN. Such shares shall be considered restricted securities pursuant to the Securities Act of 1933, as amended, but Buyer warrants that Rule 144 is currently available for the Buyer generally as a safe harbor under Rule 4(a)(1) of the Securities Act of 1933, as amended, as Buyer meets the current information and non-shell requirements therein. Buyer further agrees that Seller shall have piggy-back registration rights as to such shares and that Buyer will include as many of such shares as can be registered pursuant to registration limitations in any Form S-1 registration statement filed by the Buyer during the two years following the Closing Date.

b. Authority to Enter Into This Agreement. (i) Buyer has the authority to enter into this Agreement; (ii) its signatories have been properly authorized to enter into this Agreement (including the execution and delivery of any other agreement (including with respect to any JOA or Assignment, on the date of that JOA or Assignment), document, certificate, or instrument contemplated by this Agreement as to be executed and delivered by Buyer) and to perform all of the covenants and agreements contained herein; (iii) Buyer is not a party to, subject to, or bound by any agreement or instrument or any statute, regulation, judgment, or decree of any court or governmental body which could at the date of the Closing prevent the performance of any of Buyer's obligations under this Agreement or adversely affect Sellers' interest obtained in the common stock of Buyer.

c. Accredited Investor. Buyer and will acquire the Property for its own account and not with a view to a sale or distribution thereof in violation of the Securities Act and the rules and regulations thereunder, any applicable state Blue Sky Laws or any other applicable securities laws.

d. Independent Evaluation. Buyer, through their members and their respective affiliates, are sophisticated in the evaluation, purchase, ownership, development, investment in and operation of oil and gas properties. In making its decision to enter into this Agreement and to acquire the subject interest in the Property, Buyer, except to the extent of Sellers' express representations and warranties herein, has relied on its own independent investigation, review and analysis of such information and material as Buyer in its discretion has deemed relevant, which investigation, review and analysis was done by Buyer and their own advisors (including, to the extent deemed necessary by Buyer, legal, tax, economic, environmental, geological and geophysical, engineering and other advisors) and not on any factual representations or opinions of Seller or any representatives or consultants or advisors engaged by or otherwise purporting to represent Seller or any affiliate or principal of Sellers.

e. Brokers' Fees. Buyer has incurred any liability, contingent or otherwise, for brokers' or finders' fees relating to the transactions contemplated by this Agreement for which Sellers, any of its affiliates, or any of Sellers' interests in the Property shall have any liability.

 

3

15. WARRANTIES BY BUYER. Buyer warrants that all the "Representations by Buyer" contained in paragraph 14 of this Agreement are true and in the event that it is ever determined a representation is not true, Buyer will, take the necessary remedial action to make the situation consistent with Buyer's representation, and pay to Seller all lost profits, consequential damages and other expenses incurred while waiting for Buyer to complete said remedial action. In addition, Buyer shall indemnify Seller against all actual losses and damages sustained as a result of such breach of Buyer's warranty including all costs incurred to defend any claims, whether or not such claims are ultimately determined to have been valid. The terms of this paragraph shall survive closing and shall not merge with the documents executed and delivered at closing.

16. OPERATION OF THE LEASES AFTER CLOSING. – intentionally deleted.

17. ADJUSTMENTS. The following adjustments shall be made after Closing.

a. Oil, gas and other production from or attributable to the working interest in and to the Leases to be sold to Buyer which is produced prior to the Effective Time shall belong to Seller, and that which is produced on or after the Effective Time shall belong to Buyer, subject to third party revenue and royalty interests. Buyer will assume all responsibility for notifying the purchaser(s) of production of the change of ownership. Seller and Buyer shall execute such documents as may be reasonably required by any purchaser of production.

b. Buyer and Seller will effect a cash adjustment to account for Saleable Oil in any oil storage tank on the Leases at the Effective Time. As of the Effective Time the parties will jointly measure the oil above the commercial draw down valve in storage tanks on the Leases (the "Saleable Oil") and when oil is next sold after the Closing Date the amount allocated to Buyer and Seller shall be divided at that time.

c. The parties shall jointly read utility meters so that utility costs can be allocated pursuant to this Agreement with the adjustment for Seller's share to be made when the utility bill is next received after the Effective Time.

d. Seller shall be responsible for all costs of ownership and operation of the Leases up to the Effective Time, and Buyer shall be responsible for all such costs from and after the Effective Time.

e. If Seller operates the Leases for the benefit of Buyer after the Effective Time, or if Buyer operates the Leases prior to the Effective Time for the benefit of Seller, then the party benefitting from such interregnum operations shall reimburse the operating party for the reasonable costs of such operations, including direct field labor and benefits, contract labor and services, repairs, replacement parts, supplies and fuels.

f. Within 45 days following the Effective Time the parties shall settle and pay the adjustments provided for in this paragraph.

18. CONFIDENTIALITY. Buyer agrees that all information obtained from the examination of Sellers' files and records shall remain confidential. In the event the transactions contemplated by this Agreement are not closed, Buyer will return to Seller all copies of such files and all other information relating to the Property obtained pursuant to this Agreement, except as to that information obtained from records available to the public. This Agreement and the transaction contemplated herein shall be kept confidential and shall not be disclosed to any other party without the written consent of all Parties. Prior to closing, neither party shall make or release any public statements or announcements, including those to the media, concerning this Agreement or any transactions contemplated by this Agreement without the prior written consent of the other. To the extent that either party has a legal obligation or duty to release any public statements or announcements, such announcements shall describe the transaction as one entered into with "an undisclosed Buyer" or "an undisclosed Seller" and shall not specifically describe the Property to he sold or acquired.

19. DISCLAIMERS. The parties hereby stipulate and agree that neither party has made any representations or warranties of any kind to the other which are not expressly included herein. The parties further stipulate and agree that neither of them have entered into this agreement or changed their respective positions based upon any representations or warranties made by the other party which are not expressly included herein.

 

4

20. MISCELLANEOUS.

A. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon, and inure to the benefit of, the Parties hereto and their respective successors, heirs, administrator, and assigns. Either Buyer or Seller may assign all or any portion of their rights hereunder to a third party.

B. AMENDMENTS. This Agreement may be amended or modified only by a written instrument executed by the Seller and the Buyer.

C. GOVERNING LAW. This Agreement shall be governed by, construed and enforced in accordance with the laws of Kansas. The venue of any action shall be in Miami County, Kansas.

D. MERGER OF PRIOR AGREEMENTS. This Agreement, as may be amended, and the exhibits attached hereto constitute the entire Agreement between Buyer and Seller with respect to the purchase and sale of the Property and supersede all prior Agreements and understandings between the Parties hereto relating to the subject matter hereof.

E. CONSENT OR WAIVER. No consent or waiver, express or implied, by either Party to or of any breach or default by the other Party in the performance of this Agreement shall be construed as a consent or waiver to or of any subsequent breach or default in the performance by such other Party of the same or any other obligations hereunder.

F. COUNTERPARTS. This Agreement may be executed in counterparts and all counterparts shall be considered part of one Agreement binding on all parties hereto.

G. CAPTIONS. Captions herein are for convenience of reference only and in no way define, limit, or expand the scope or intent of this Agreement.

H. SEVERABILITY. In the event that one or more of the provisions hereof shall be held to be illegal, invalid, or unenforceable, such provisions shall be deemed severable and the remaining provisions hereof shall continue in full force and effect.

I. JOINT DRAFTING. The Parties shall be considered joint drafters of this Agreement so as not to construe this contract against one Party as drafter more than the other.

J. SURVIVAL OF TERMS. The terms of this Agreement shall survive Closing and shall not merge with the Assignment and Bill of Sale referenced herein.

K. DEFAULT. Time is of the essence of this Agreement. In the event either Party fails to comply with any of the terms of this Agreement, then this Agreement shall, at the option of the non‑defaulting Party, be terminated. If the non‑defaulting Party does not exercise the option to terminate this Agreement, the non‑defaulting party may require specific performance and also exercise any other legal rights and remedies available under Kansas law. In the event that either party brings suit to enforce the terms of this Agreement or for the breach of any representation or warranty contained herein, the non‑breaching party shall be entitled to recover its cost, expenses and attorney fees incurred in bringing such action and enforcing and collecting any judgment obtained therein from the breaching party.

L. EFFECTIVE DATE. This Agreement shall be effective as of September 3^rd, 2015 regardless of the date on which it is actually executed by the parties.

*****signature page follows****

 

5

SELLER: Global Equity Funding, LLC, a Kansas limited liability company
By:	/s/ H.M. Burstein
	H. M. Burstein I have authority to bind the company
BUYER: Viking Investments Group, Inc., a Nevada corporation
By:	/s/ James A. Doris
	James A. Doris, President I have authority to bind the company

6

EXHIBIT 'A'

LW (WEST WILSON)

Dated:	March 25, 2013
Recorded:	July 17, 2013
Lessors:	David W. Wilson and Barbara S. Wilson, husband and wife
Lessee:	Flinthills Oil Company, LLC
Description:	Township 18 South, Range 22 East
	Section 03: SW/4 SE/4, SE/4 SE/4, N/2 SE/4, NE/4 less a ten acre tract described as follows: Commencing at the Northwest corner of the said Northeast Quarter, thence East 660 feet; thence South 645 feet; thence in a Southwesterly direction to a point 698 feet South of the Northwest corner of said Northeast quarter; thence North 698 feet to the place of beginning, containing 310.0 acres, Section 04: NE/4 Except Tract beginning 25' South of the Northwest Corner of NE/4, thence East 280'; thence South 613'; thence West 280'; thence North 613' to Point of beginning, containing 156 acres all in Miami County, Kansas.

WILSON A (EAST WILSON)

Dated:	March 25, 2013
Recorded:	July 17, 2013
Lessors:	David W. Wilson and Barbara S. Wilson, husband and wife
Lessee:	Flinthills Oil Company, LLC
Description:	Township 18 South, Range 22 East
	Section 03: SW/4 SE/4, SE/4 SE/4, N/2 SE/4, NE/4 less a ten acre tract described as follows: Commencing at the Northwest corner of the said Northeast Quarter, thence East 660 feet; thence South 645 feet; thence in a Southwesterly direction to a point 698 feet South of the Northwest corner of said Northeast quarter; thence North 698 feet to the place of beginning, containing 310.0 acres Section 04: NE/4 Except Tract beginning 25' South of the Northwest Corner of NE/4, thence East 280'; thence South 613'; thence West 280'; thence North 613' to Point of beginning, containing 156 acres all in Miami County, Kansas.

K. Feuerborn, husband and wife
Lessee:	Caldwell Enterprises, Inc.
Description:	The Southeast Quarter (SE/4) and the Southeast Quarter (SE/4) of the Northeast Quarter (NE/4) of Section 16, Township 20, Range 22, all in Linn County, Kansas.
Dated:	May 21, 1981
Filed:	August 19, 1981
Recorded:	Book 118, Page 478
Lessors:	Ralph Nickell and Ollie M. Nickell, husband and wife
Lessee:	Glenn Caldwell
Description:	The West half (W/2) of the Northeast Quarter (NE/4) and the North Half (N/2) of the Northwest Quarter (NW/4) except the South 15 acres of the Northwest Quarter (NW/4) of the Northwest Quarter (N/W/4) of Section 21, Township 20, Range 22, all in Linn County, Kansas.

7

EXHIBIT 'C'

FORM ASSIGNMENT

ASSIGNMENT OF OIL AND GAS LEASE
AND BILL OF SALE

KNOW ALL MEN BY THESE PRESENTS, that Global Equity Funding, LLC, hereinafter called "Assignor," for valuable consideration, the receipt of which is hereby acknowledged, does grant, bargain, sell convey, transfer, assign and deliver unto Viking Investments Group, Inc. hereinafter called "Assignee" (whether one or more), its successors and assigns, a ______ % working interest in and to the following oil and gas lease and personal property:

(A)	Oil and gas leases described on Exhibit '1' (the "Leases"); and
(B)	An undivided ____ % interest in and to all producing, nonproducing, and shut‑in oil and gas wells, salt water disposal wells, water wells, injection wells, and all other wells on or attributable to the Leases; and
(C)	An undivided ____ % interest in and to all pumping units, pumps, casing, rods, tubing, wellhead equipment, separators, heater treaters, tanks, pipelines, compressors, dehydrators, gas processing equipment, gathering lines, flow lines, valves, fittings and all other surface and downhole equipment, fixtures, related inventory, gathering and treating facilities, personal property and equipment used in connection with the Leases, lands or personal property located thereupon and all other interests described above; and
(D)	An undivided ____ % interest in and to all personal property, to include fixtures and improvements, currently located on the Leases, and used or useable in connection with oil and gas exploration and production activities.

The Lease and above described interests and property are collectively referred to as the "Assigned Property."

ASSIGNMENT TERMS:

1. GENERAL WARRANTY. Assignor makes this Assignment with general warranty. Assignee accepts the Assigned Property with general warranty by Assignor that Assignor is the owner of the Assigned Property; and has good and marketable title thereto free and clear of any encumbrances..

2. FURTHER ASSURANCES. The parties agree to execute, acknowledge and deliver such other and further instruments or documents, and to take such other and further actions as may be reasonably necessary to carry out the provisions of this Assignment.

3. EFFECTIVE DATE. This Conveyance shall be effective as of February 9, 2016, at 12:01 a.m., central standard time.

TO HAVE AND TO HOLD the above described property and easement with all and singular the rights, privileges, and appurtenances thereunto or in any wise belonging to the said Assignee herein, its successors, personal representatives, administrators, executors and assigns forever.

________________________________
STATE OF __________________           )
)ss:	Acknowledgment for ___________________
COUNTY OF ________________           )

Be it Remembered that on this _____ day of _______________, 2015, before me, the undersigned, a Notary Public, duly commissioned, in and for the county and state aforesaid, came _____________, ____________of _____________, a ________________, personally known to me to be such officer, and to be the same person who executed as such officer the foregoing instrument of writing on behalf of said corporation, and he duly acknowledged the execution of the same for himself and for said __________________ for the uses and purposes therein set forth.

In Witness Whereof, I have hereunto set my hand and official seal on the day and year last above written.

Appointment/Commission Expires: Notary Public

8

EX-10.4

EXHIBIT 10.4

PURCHASE, SALE AND CAPITAL CONTRIBUTION AGREEMENT

BETWEEN:

MOXY TRADING LLC

332 Shadow Creek Drive

Brentwood, TN 37027

(“SELLER”)

AND:

VIKING INVESTMENTS GROUP, INC.

1330 Avenue of the Americas, Suite 23A

New York, NY 10019

(“BUYER”)

RE: PURCHASE AND SALE OF WORKING INTEREST AND OTHER PROPERTY IN AN OIL AND GAS LEASE IN KANSAS

 

1

Purchase Price:	As Per Section 3	Closing Date:	August 1, 2016
		Effective Date:	August 1, 2016

1. CONSIDERATION. The supporting consideration for this Agreement will be the exchange of the Purchase Price for the Property and the agreement to make capital contributions to Seller, and the mutual covenants and agreements contained herein. The Parties stipulate and agree that said consideration is sufficient to support this Agreement.

2. SALE OF PROPERTY. Seller is the owner of certain working interest in and to the oil and gas leases described on Exhibit 'A' attached hereto and incorporated herein by reference (the "Leases"). Seller shall sell, transfer, convey and deliver to Buyer at closing, free and clear of all encumbrances, and Buyer shall purchase and acquire at closing: (a) the entire percentage of the Seller’s working interest in the Leases (the "Working Interests"); and (b) the undivided interest in and to all oil and gas wells, equipment, fixtures and other personal property located upon the Leases and used in connection with oil and gas operations upon the Leases attributable to the Working Interests being purchased by Buyer. The property sold and to be conveyed hereby as hereinabove described may hereinafter be referred to collectively as the "Property."

3. PURCHASE PRICE. Buyer shall purchase a portion of the Property for Thirty Thousand Three Hundred Seventy Five and 00/100 Dollars ($30,375.00) and Seller agrees to make a capital contribution to Buyer of the remainder of the Property in exchange for One Hundred Twelve Thousand Five Hundred (112,500) shares of common stock in Buyer which are currently valued at $0.20 per share being traded under the trading symbol VKIN (the “Shares”).

4. ASSIGNMENT FORM. Seller shall at closing execute an Assignment Agreement and Bill of Sale conveying to Buyer the Property, including, without limitation, the stated Working Interest in and to the Leases. Such Assignment Agreement and Bill of Sale shall be in the form requested by the Buyer.

5. CLOSING. Closing shall be on or before August 1, 2016 at a time and place mutually agreeable to Buyer and Seller. This transaction shall be made effective as of 12:01 a.m. on August 1^st, 2016 (the "Effective Time"). At closing Buyer shall tender the full purchase price in collected funds, and shall deliver the agreed upon common stock of Buyer to Seller and Seller shall deliver the fully executed Assignment and Bill of Sale. The respective obligations of each Party to effect the transactions contemplated hereby are subject to the fulfillment or waiver at or prior to closing of the conditions set forth in the paragraphs below:

a.

Financing. Buyer shall have obtained on terms and conditions satisfactory to it all of the financing it needs in order to consummate the purchase of the Property and to fund the working capital requirements of the Buyer after closing; and

b.

Due Diligence. The Buyer shall have conducted and been satisfied with such further due diligence as Buyer deems appropriate to evaluate the viability of the purchase contemplated by this Agreement. During such due diligence process the Seller will give the Buyer and its representatives and professional advisors access to all of the Seller’ properties, facilities, books, documents and records that the Buyer may reasonably request. The Buyer agrees to coordinate its due diligence with the Seller. If the purchase is not completed, upon the written request of the Seller, the Buyer will return to the Seller, or destroy, all information in the Buyer’s possession derived from its due diligence activities and which was not otherwise known by the Buyer.

6. DUE DILIGENCE PERIOD. Buyer may perform any inspections or commission any studies or evaluations of the Property at Buyer's sole cost and expense as part of its due diligence prior to Closing. Such due diligence shall include but not be limited to reservoir studies, title work, surveying, or appraisal.

7. NO BUSINESS RELATIONSHIP. Nothing in this Agreement will be deemed, held, or construed to make either party a partner or associate of the other in the operation of the Leases, or to render either party liable for any debts, liabilities, or obligations incurred by the other party. It is expressly understood and agreed that the relationship between the parties hereto will always be that of vendor and vendee.

 

2

8. SELLERS RETENTION. Seller shall not terminate any operating agreements with respect to the Leases prior to the Closing. Seller shall retain all production from said operations prior to closing and shall pay all expenses and liabilities to the date of closing. All continuing services such as utilities, pumper fees and related expenses shall become on the date of closing Buyer’s liability.

9. TIME IS OF THE ESSENCE. It is very important to the Parties that this sale is performed in a prudent and timely manner. Time is of the essence, thus all things which are required to be done by certain dates must be done, otherwise such failure shall be deemed a material default. If either party breaches this agreement the non-breaching party may elect to declare this null and void and all right of the defaulting party hereunder shall terminate. If the non-breaching party does not exercise its option to terminate this agreement, said non-breaching party may require specific performance and also exercise any other legal rights and remedies available to it, and said non-breaching party shall be entitled to recover from the breaching party its cost, expenses and attorney fees incurred in enforcing the terms of this agreement or pursuing a remedy as a result of the breach of this agreement.

10. POSSESSION AT CLOSING. Possession of the Property shall be on the date of closing and Seller shall have any risk of casualty loss prior to said date, and Buyer the risk of casualty loss on and after that date. Buyer shall be permitted to come upon the Leases to make such inspections of the Property as it may reasonably desire. Nothing shall be removed from the Leases while making such inspections and respect must be paid to the landowner rights.

11. TAXES. All property, ad valorem, severance or other taxes assessed against the Property shall be prorated as of the closing. All such taxes which are currently due or payable shall be paid by Seller prior to closing. Buyer will bear all applicable sales or similar taxes imposed by any state, county, municipal or other governmental entity as a result of this sale.

12. SELLER’S REPRESENTATIONS AND WARRANTIES. This Agreement is made and entered into based upon the belief that the following representations made by Seller are true and will continue to be true as of the date of closing:

a. Title. Seller owns the interest in and to the Property which is to be transferred to Buyer at closing. The title to the Property is such that upon purchase by Buyer, the title to the Property will be free of any encumbrances. "Encumbrances" shall mean any, liens, mortgages, security interests, unitization agreements, pooling agreements, orders to plug wells, penalties for overproduction, or production curtailment orders.

b. Authority to Enter Into This Agreement. (i) Seller have the authority to enter into this Agreement; (ii) its signatories have been properly authorized to enter into this Agreement (including the execution and delivery of any other agreement (including with respect to any Assignment, on the date of that Assignment), document, certificate, or instrument contemplated by this Agreement as to be executed and delivered by Seller) and to perform all of the covenants and agreements contained herein; (iii) Seller are not a party to, subject to, or bound by any agreement or instrument or any statute, regulation, judgment, or decree of any court or governmental body which could at the date of the Closing prevent the performance of any of Seller’s obligations under this Agreement or adversely affect Buyer's Interests obtained in the Property; (iv) to the extent not disclosed, there are no other contracts or agreements relating to the Property; and (v) all suppliers, contractors and subcontractors who have supplied labor or materials upon the Leases have been fully paid.

c. Warranty. Seller warrants that no act or omission by it or any of its agents or employees could give rise to an action or claim of any kind relating to the Property, the operator of the Leases, or to impair the title to the same. The terms "action or claim" as used in this paragraph shall mean any action in tort, contract or regulatory agency claim, by any person or entity.

d. Production. Seller warrants that it is not aware of any facts or circumstances which would cause such production to decline at rates greater than normal and customary decline rates for the Working Interests, and Seller agree to provide current run tickets for all of the Leases to the Buyer within 5 business days of the execution hereof and prior to the Closing Date.

e. Brokers' Fees. Seller has not incurred any liability, contingent or otherwise, for brokers' or finders' fees relating to the transactions contemplated by this Agreement for which Buyer, any of its affiliates, or any of Buyer's interests in the Property shall have any liability.

The terms of this paragraph shall survive closing and shall not merge with the assignment and bill of sale executed by Seller and delivered to Buyer at closing. If it is determined at any time prior to closing that any of the above representations is not true or that there is a substantial likelihood that any of the above representations are not true, Buyer shall have the right to cancel this Agreement.

 

3

13. WARRANTIES BY SELLER. In the event Buyer ultimately purchases the Leases and related property, Seller warrants that all the "Representations by Seller" contained in paragraph 12 of this Contract are true and in the event that it is ever determined a representation is not true, Seller will, at Buyer's election, either (1) take the necessary remedial action to make the situation consistent with Seller's representation plus pay to Buyer the difference between the Property as represented and the value of the Property once the problem is identified and remedied; or (2) pay to Buyer an amount equal to the cost of remedying the problem plus the difference between the Property as represented and the value of the Property once the problem is identified and remedied. In addition, Seller shall indemnify Buyer against all actual losses and damages sustained as a result of such breach of Seller's warranty. The terms of this paragraph shall survive closing and shall not merge with the assignment and bill of sale executed by Seller and delivered to Buyer at closing.

14. BUYER'S REPRESENTATIONS AND WARRANTIES. This Agreement is made and entered into based upon the belief that the following representations made by Buyer are true and will continue to be true as of the date of closing:

a. Buyer's Stock. The shares of common stock to be transferred to Seller at Closing represent unimpaired shares of common stock in and to Buyer, which are currently valued at $0.20 per share and are traded under the trading symbol VKIN. Such shares shall be considered restricted securities pursuant to the Securities Act of 1933, as amended, but Buyer warrants that Rule 144 is currently available for the Buyer generally as a safe harbor under Rule 4(a)(1) of the Securities Act of 1933, as amended, as Buyer meets the current information and non-shell requirements therein. Buyer further agrees that Seller shall have piggy-back registration rights as to such shares and that Buyer will include as many of such shares as can be registered pursuant to registration limitations in any Form S-1 registration statement filed by the Buyer during the two years following the Closing Date.

b. Authority to Enter Into This Agreement. (i) Buyer has the authority to enter into this Agreement; (ii) its signatories have been properly authorized to enter into this Agreement (including the execution and delivery of any other agreement (including with respect to any Assignment on the date of that Assignment), document, certificate, or instrument contemplated by this Agreement as to be executed and delivered by Buyer) and to perform all of the covenants and agreements contained herein; (iii) Buyer is not a party to, subject to, or bound by any agreement or instrument or any statute, regulation, judgment, or decree of any court or governmental body which could at the date of the Closing prevent the performance of any of Buyer's obligations under this Agreement or adversely affect Seller's interest obtained in the common stock of Buyer.

c. Accredited Investor. Buyer and will acquire the Property for its own account and not with a view to a sale or distribution thereof in violation of the Securities Act and the rules and regulations thereunder, any applicable state Blue Sky Laws or any other applicable securities laws.

d. Independent Evaluation. Buyer, through their members and their respective affiliates, are sophisticated in the evaluation, purchase, ownership, development, investment in and operation of oil and gas properties. In making its decision to enter into this Agreement and to acquire the subject interest in the Property, Buyer, except to the extent of Seller’s express representations and warranties herein, has relied on its own independent investigation, review and analysis of such information and material as Buyer in its discretion has deemed relevant, which investigation, review and analysis was done by Buyer and their own advisors (including, to the extent deemed necessary by Buyer, legal, tax, economic, environmental, geological and geophysical, engineering and other advisors) and not on any factual representations or opinions of Seller or any representatives or consultants or advisors engaged by or otherwise purporting to represent Seller or any affiliate or principal of Seller.

e. Brokers' Fees. Buyer has not incurred any liability, contingent or otherwise, for brokers' or finders' fees relating to the transactions contemplated by this Agreement for which Seller, any of its affiliates, or any of Seller’s interests in the Property shall have any liability.

15. WARRANTIES BY BUYER. Buyer warrants that all the "Representations by Buyer" contained in paragraph 14 of this Agreement are true and in the event that it is ever determined a representation is not true, Buyer will, take the necessary remedial action to make the situation consistent with Buyer's representation, and pay to Seller all lost profits, consequential damages and other expenses incurred while waiting for Buyer to complete said remedial action. In addition, Buyer shall indemnify Seller against all actual losses and damages sustained as a result of such breach of Buyer's warranty including all costs incurred to defend any claims, whether or not such claims are ultimately determined to have been valid. The terms of this paragraph shall survive closing and shall not merge with the documents executed and delivered at closing.

 

4

16. ADJUSTMENTS. The following adjustments shall be made after Closing.

a. Oil, gas and other production from or attributable to the working interest in and to the Leases to be sold to Buyer which is produced prior to the Effective Time shall belong to Seller, and that which is produced on or after the Effective Time shall belong to Buyer, subject to third party revenue and royalty interests. Buyer will assume all responsibility for notifying the purchaser(s) of production of the change of ownership. Seller and Buyer shall execute such documents as may be reasonably required by any purchaser of production.

b. Buyer and Seller will effect a cash adjustment to account for Saleable Oil in any oil storage tank on the Leases at the Effective Time. As of the Effective Time the parties will jointly measure the oil above the commercial draw down valve in storage tanks on the Leases (the "Saleable Oil") and when oil is next sold after the Closing Date the amount allocated to Buyer and Seller shall be divided at that time.

c. The parties shall jointly read utility meters so that utility costs can be allocated pursuant to this Agreement with the adjustment for Seller's share to be made when the utility bill is next received after the Effective Time.

c. Seller shall be responsible for all costs of ownership and operation of the Leases up to the Effective Time, and Buyer shall be responsible for all such costs from and after the Effective Time.

e. If Seller operates the Leases for the benefit of Buyer after the Effective Time, or if Buyer operates the Leases prior to the Effective Time for the benefit of Seller, then the party benefitting from such interregnum operations shall reimburse the operating party for the reasonable costs of such operations, including direct field labor and benefits, contract labor and services, repairs, replacement parts, supplies and fuels.

f. Within 45 days following the Effective Time the parties shall settle and pay the adjustments provided for in this paragraph.

17. CONFIDENTIALITY. Buyer agrees that all information obtained from the examination of Seller’s files and records shall remain confidential. In the event the transactions contemplated by this Agreement are not closed, Buyer will return to Seller all copies of such files and all other information relating to the Property obtained pursuant to this Agreement, except as to that information obtained from records available to the public. This Agreement and the transaction contemplated herein shall be kept confidential and shall not be disclosed to any other party without the written consent of all Parties. Prior to closing, neither party shall make or release any public statements or announcements, including those to the media, concerning this Agreement or any transactions contemplated by this Agreement without the prior written consent of the other. To the extent that either party has a legal obligation or duty to release any public statements or announcements, such announcements shall describe the transaction as one entered into with "an undisclosed Buyer" or "an undisclosed Seller" and shall not specifically describe the Property to he sold or acquired.

18. DISCLAIMERS. The parties hereby stipulate and agree that neither party has made any representations or warranties of any kind to the other which are not expressly included herein. The parties further stipulate and agree that neither of them have entered into this agreement or changed their respective positions based upon any representations or warranties made by the other party which are not expressly included herein.

19. MISCELLANEOUS.

A. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon, and inure to the benefit of, the Parties hereto and their respective successors, heirs, administrator, and assigns. Either Buyer or Seller may assign all or any portion of their rights hereunder to a third party.

B. AMENDMENTS. This Agreement may be amended or modified only by a written instrument executed by the Seller and the Buyer.

C. GOVERNING LAW. This Agreement shall be governed by, construed and enforced in accordance with the laws of Kansas. The venue of any action shall be in Miami County, Kansas.

 

5

D. MERGER OF PRIOR AGREEMENTS. This Agreement, as may be amended, and the exhibits attached hereto constitute the entire Agreement between Buyer and Seller with respect to the purchase and sale of the Property and supersede all prior Agreements and understandings between the Parties hereto relating to the subject matter hereof.

E. CONSENT OR WAIVER. No consent or waiver, express or implied, by either Party to or of any breach or default by the other Party in the performance of this Agreement shall be construed as a consent or waiver to or of any subsequent breach or default in the performance by such other Party of the same or any other obligations hereunder.

F. COUNTERPARTS. This Agreement may be executed in counterparts and all counterparts shall be considered part of one Agreement binding on all parties hereto.

G. CAPTIONS. Captions herein are for convenience of reference only and in no way define, limit, or expand the scope or intent of this Agreement.

H. SEVERABILITY. In the event that one or more of the provisions hereof shall be held to be illegal, invalid, or unenforceable, such provisions shall be deemed severable and the remaining provisions hereof shall continue in full force and effect.

I. JOINT DRAFTING. The Parties shall be considered joint drafters of this Agreement so as not to construe this contract against one Party as drafter more than the other.

J. SURVIVAL OF TERMS. The terms of this Agreement shall survive Closing and shall not merge with the Assignment and Bill of Sale referenced herein.

K. DEFAULT. Time is of the essence of this Agreement. In the event either Party fails to comply with any of the terms of this Agreement, then this Agreement shall, at the option of the non‑defaulting Party, be terminated. If the non‑defaulting Party does not exercise the option to terminate this Agreement, the non‑defaulting party may require specific performance and also exercise any other legal rights and remedies available under Kansas law. In the event that either party brings suit to enforce the terms of this Agreement or for the breach of any representation or warranty contained herein, the non‑breaching party shall be entitled to recover its cost, expenses and attorney fees incurred in bringing such action and enforcing and collecting any judgment obtained therein from the breaching party.

 

6

In WITNESS WHEREOF THE PARTIES HAVE EXEUCTED THIS AGREEMENT on the ____ day of July, 2016.

SELLER: Moxy Trading LLC
By:	/s/ Robert Lucas
	Robert Lucas I have authority to bind the company
BUYER: Viking Investments Group, Inc., a Nevada corporation
By:	/s/ James A. Doris
	James A. Doris, President & C.E.O. I have authority to bind the company

7

EXHIBIT 'A'

ABC LEASE

Lease Details:

Sec 22, T-17S, R-22E

Legal Description and other details to be provided by the Seller.

8

EX-10.5

EXHIBIT 10.5

PURCHASE, SALE AND CAPITAL CONTRIBUTION AGREEMENT

BETWEEN:

MOXY HOLDINGS LLC

a Florida limited liability company

11301 Bonita Beach Road, Suite 33

Bonita Springs, FL 34135

(“SELLER”)

AND:

VIKING INVESTMENTS GROUP, INC.

1330 Avenue of the Americas, Suite 23A

New York, NY 10019

(“BUYER”)

RE: PURCHASE AND SALE OF WORKING INTERESTS AND OTHER PROPERTY IN VARIOUS OIL AND GAS LEASES IN KANSAS

 

1

Purchase Price:	As Per Section 3	Closing Date:	August 1, 2016
		Effective Date:	August 1, 2016

1. CONSIDERATION. The supporting consideration for this Agreement will be the exchange of the Purchase Price for the Property and the agreement to make capital contributions to Seller, and the mutual covenants and agreements contained herein. The Parties stipulate and agree that said consideration is sufficient to support this Agreement.

2. SALE OF PROPERTY. Seller is the owner of certain working interest in and to the oil and gas leases described on Exhibit 'A' attached hereto and incorporated herein by reference (the "Leases"). Seller shall sell, transfer, convey and deliver to Buyer at closing, free and clear of all encumbrances, and Buyer shall purchase and acquire at closing: (a) the entire percentage of the Seller’s working interest in the Leases (the "Working Interests"); and (b) the undivided interest in and to all oil and gas wells, equipment, fixtures and other personal property located upon the Leases and used in connection with oil and gas operations upon the Leases attributable to the Working Interests being purchased by Buyer. The property sold and to be conveyed hereby as hereinabove described may hereinafter be referred to collectively as the "Property."

3. PURCHASE PRICE. Buyer shall purchase a portion of the Property for Ninety Thousand and 00/100 Dollars ($90,000.00) and Seller agrees to make a capital contribution to Buyer of the remainder of the Property in exchange for One Million Five Hundred Seventy Five Thousand (1,575,000) shares of common stock in Buyer which are currently valued at $0.20 per share being traded under the trading symbol VKIN (the “Shares”).

4. ASSIGNMENT FORM. Seller shall at closing execute an Assignment Agreement and Bill of Sale conveying to Buyer the Property, including, without limitation, the stated Working Interest in and to the Leases. Such Assignment Agreement and Bill of Sale shall be in the form requested by the Buyer.

5. CLOSING. Closing shall be on or before August 1, 2016 at a time and place mutually agreeable to Buyer and Seller. This transaction shall be made effective as of 12:01 a.m. on August 1^st, 2016 (the "Effective Time"). At closing Buyer shall tender the full purchase price in collected funds, and shall deliver the agreed upon common stock of Buyer to Seller and Seller shall deliver the fully executed Assignment and Bill of Sale. The respective obligations of each Party to effect the transactions contemplated hereby are subject to the fulfillment or waiver at or prior to closing of the conditions set forth in the paragraphs below:

a.

Financing. Buyer shall have obtained on terms and conditions satisfactory to it all of the financing it needs in order to consummate the purchase of the Property and to fund the working capital requirements of the Buyer after closing; and

b.

Due Diligence. The Buyer shall have conducted and been satisfied with such further due diligence as Buyer deems appropriate to evaluate the viability of the purchase contemplated by this Agreement. During such due diligence process the Seller will give the Buyer and its representatives and professional advisors access to all of the Seller’ properties, facilities, books, documents and records that the Buyer may reasonably request. The Buyer agrees to coordinate its due diligence with the Seller. If the purchase is not completed, upon the written request of the Seller, the Buyer will return to the Seller, or destroy, all information in the Buyer’s possession derived from its due diligence activities and which was not otherwise known by the Buyer.

6. DUE DILIGENCE PERIOD. Buyer may perform any inspections or commission any studies or evaluations of the Property at Buyer's sole cost and expense as part of its due diligence prior to Closing. Such due diligence shall include but not be limited to reservoir studies, title work, surveying, or appraisal.

7. NO BUSINESS RELATIONSHIP. Nothing in this Agreement will be deemed, held, or construed to make either party a partner or associate of the other in the operation of the Leases, or to render either party liable for any debts, liabilities, or obligations incurred by the other party. It is expressly understood and agreed that the relationship between the parties hereto will always be that of vendor and vendee.

 

2

8. SELLERS RETENTION. Seller shall not terminate any operating agreements with respect to the Leases prior to the Closing. Seller shall retain all production from said operations prior to closing and shall pay all expenses and liabilities to the date of closing. All continuing services such as utilities, pumper fees and related expenses shall become on the date of closing Buyer’s liability.

9. TIME IS OF THE ESSENCE. It is very important to the Parties that this sale is performed in a prudent and timely manner. Time is of the essence, thus all things which are required to be done by certain dates must be done, otherwise such failure shall be deemed a material default. If either party breaches this agreement the non-breaching party may elect to declare this null and void and all right of the defaulting party hereunder shall terminate. If the non-breaching party does not exercise its option to terminate this agreement, said non-breaching party may require specific performance and also exercise any other legal rights and remedies available to it, and said non-breaching party shall be entitled to recover from the breaching party its cost, expenses and attorney fees incurred in enforcing the terms of this agreement or pursuing a remedy as a result of the breach of this agreement.

10. POSSESSION AT CLOSING. Possession of the Property shall be on the date of closing and Seller shall have any risk of casualty loss prior to said date, and Buyer the risk of casualty loss on and after that date. Buyer shall be permitted to come upon the Leases to make such inspections of the Property as it may reasonably desire. Nothing shall be removed from the Leases while making such inspections and respect must be paid to the landowner rights.

11. TAXES. All property, ad valorem, severance or other taxes assessed against the Property shall be prorated as of the closing. All such taxes which are currently due or payable shall be paid by Seller prior to closing. Buyer will bear all applicable sales or similar taxes imposed by any state, county, municipal or other governmental entity as a result of this sale.

12. SELLER’S REPRESENTATIONS AND WARRANTIES. This Agreement is made and entered into based upon the belief that the following representations made by Seller are true and will continue to be true as of the date of closing:

a. Title. Seller owns the interest in and to the Property which is to be transferred to Buyer at closing. The title to the Property is such that upon purchase by Buyer, the title to the Property will be free of any encumbrances. "Encumbrances" shall mean any, liens, mortgages, security interests, unitization agreements, pooling agreements, orders to plug wells, penalties for overproduction, or production curtailment orders.

b. Authority to Enter Into This Agreement. (i) Seller have the authority to enter into this Agreement; (ii) its signatories have been properly authorized to enter into this Agreement (including the execution and delivery of any other agreement (including with respect to any Assignment, on the date of that Assignment), document, certificate, or instrument contemplated by this Agreement as to be executed and delivered by Seller) and to perform all of the covenants and agreements contained herein; (iii) Seller are not a party to, subject to, or bound by any agreement or instrument or any statute, regulation, judgment, or decree of any court or governmental body which could at the date of the Closing prevent the performance of any of Seller’s obligations under this Agreement or adversely affect Buyer's Interests obtained in the Property; (iv) to the extent not disclosed, there are no other contracts or agreements relating to the Property; and (v) all suppliers, contractors and subcontractors who have supplied labor or materials upon the Leases have been fully paid.

c. Warranty. Seller warrants that no act or omission by it or any of its agents or employees could give rise to an action or claim of any kind relating to the Property, the operator of the Leases, or to impair the title to the same. The terms "action or claim" as used in this paragraph shall mean any action in tort, contract or regulatory agency claim, by any person or entity.

d. Production. Seller warrants that it is not aware of any facts or circumstances which would cause such production to decline at rates greater than normal and customary decline rates for the Working Interests, and Seller agree to provide current run tickets for all of the Leases to the Buyer within 5 business days of the execution hereof and prior to the Closing Date.

e. Brokers' Fees. Seller has not incurred any liability, contingent or otherwise, for brokers' or finders' fees relating to the transactions contemplated by this Agreement for which Buyer, any of its affiliates, or any of Buyer's interests in the Property shall have any liability.

The terms of this paragraph shall survive closing and shall not merge with the assignment and bill of sale executed by Seller and delivered to Buyer at closing. If it is determined at any time prior to closing that any of the above representations is not true or that there is a substantial likelihood that any of the above representations are not true, Buyer shall have the right to cancel this Agreement.

 

3

13. WARRANTIES BY SELLER. In the event Buyer ultimately purchases the Leases and related property, Seller warrants that all the "Representations by Seller" contained in paragraph 12 of this Contract are true and in the event that it is ever determined a representation is not true, Seller will, at Buyer's election, either (1) take the necessary remedial action to make the situation consistent with Seller's representation plus pay to Buyer the difference between the Property as represented and the value of the Property once the problem is identified and remedied; or (2) pay to Buyer an amount equal to the cost of remedying the problem plus the difference between the Property as represented and the value of the Property once the problem is identified and remedied. In addition, Seller shall indemnify Buyer against all actual losses and damages sustained as a result of such breach of Seller's warranty. The terms of this paragraph shall survive closing and shall not merge with the assignment and bill of sale executed by Seller and delivered to Buyer at closing.

14. BUYER'S REPRESENTATIONS AND WARRANTIES. This Agreement is made and entered into based upon the belief that the following representations made by Buyer are true and will continue to be true as of the date of closing:

a. Buyer's Stock. The shares of common stock to be transferred to Seller at Closing represent unimpaired shares of common stock in and to Buyer, which are currently valued at $0.20 per share and are traded under the trading symbol VKIN. Such shares shall be considered restricted securities pursuant to the Securities Act of 1933, as amended, but Buyer warrants that Rule 144 is currently available for the Buyer generally as a safe harbor under Rule 4(a)(1) of the Securities Act of 1933, as amended, as Buyer meets the current information and non-shell requirements therein. Buyer further agrees that Seller shall have piggy-back registration rights as to such shares and that Buyer will include as many of such shares as can be registered pursuant to registration limitations in any Form S-1 registration statement filed by the Buyer during the two years following the Closing Date.

b. Authority to Enter Into This Agreement. (i) Buyer has the authority to enter into this Agreement; (ii) its signatories have been properly authorized to enter into this Agreement (including the execution and delivery of any other agreement (including with respect to any Assignment on the date of that Assignment), document, certificate, or instrument contemplated by this Agreement as to be executed and delivered by Buyer) and to perform all of the covenants and agreements contained herein; (iii) Buyer is not a party to, subject to, or bound by any agreement or instrument or any statute, regulation, judgment, or decree of any court or governmental body which could at the date of the Closing prevent the performance of any of Buyer's obligations under this Agreement or adversely affect Seller's interest obtained in the common stock of Buyer.

c. Accredited Investor. Buyer and will acquire the Property for its own account and not with a view to a sale or distribution thereof in violation of the Securities Act and the rules and regulations thereunder, any applicable state Blue Sky Laws or any other applicable securities laws.

d. Independent Evaluation. Buyer, through their members and their respective affiliates, are sophisticated in the evaluation, purchase, ownership, development, investment in and operation of oil and gas properties. In making its decision to enter into this Agreement and to acquire the subject interest in the Property, Buyer, except to the extent of Seller’s express representations and warranties herein, has relied on its own independent investigation, review and analysis of such information and material as Buyer in its discretion has deemed relevant, which investigation, review and analysis was done by Buyer and their own advisors (including, to the extent deemed necessary by Buyer, legal, tax, economic, environmental, geological and geophysical, engineering and other advisors) and not on any factual representations or opinions of Seller or any representatives or consultants or advisors engaged by or otherwise purporting to represent Seller or any affiliate or principal of Seller.

e. Brokers' Fees. Buyer has not incurred any liability, contingent or otherwise, for brokers' or finders' fees relating to the transactions contemplated by this Agreement for which Seller, any of its affiliates, or any of Seller’s interests in the Property shall have any liability.

15. WARRANTIES BY BUYER. Buyer warrants that all the "Representations by Buyer" contained in paragraph 14 of this Agreement are true and in the event that it is ever determined a representation is not true, Buyer will, take the necessary remedial action to make the situation consistent with Buyer's representation, and pay to Seller all lost profits, consequential damages and other expenses incurred while waiting for Buyer to complete said remedial action. In addition, Buyer shall indemnify Seller against all actual losses and damages sustained as a result of such breach of Buyer's warranty including all costs incurred to defend any claims, whether or not such claims are ultimately determined to have been valid. The terms of this paragraph shall survive closing and shall not merge with the documents executed and delivered at closing.

 

4

16. ADJUSTMENTS. The following adjustments shall be made after Closing.

a. Oil, gas and other production from or attributable to the working interest in and to the Leases to be sold to Buyer which is produced prior to the Effective Time shall belong to Seller, and that which is produced on or after the Effective Time shall belong to Buyer, subject to third party revenue and royalty interests. Buyer will assume all responsibility for notifying the purchaser(s) of production of the change of ownership. Seller and Buyer shall execute such documents as may be reasonably required by any purchaser of production.

b. Buyer and Seller will effect a cash adjustment to account for Saleable Oil in any oil storage tank on the Leases at the Effective Time. As of the Effective Time the parties will jointly measure the oil above the commercial draw down valve in storage tanks on the Leases (the "Saleable Oil") and when oil is next sold after the Closing Date the amount allocated to Buyer and Seller shall be divided at that time.

c. The parties shall jointly read utility meters so that utility costs can be allocated pursuant to this Agreement with the adjustment for Seller's share to be made when the utility bill is next received after the Effective Time.

c. Seller shall be responsible for all costs of ownership and operation of the Leases up to the Effective Time, and Buyer shall be responsible for all such costs from and after the Effective Time.

e. If Seller operates the Leases for the benefit of Buyer after the Effective Time, or if Buyer operates the Leases prior to the Effective Time for the benefit of Seller, then the party benefitting from such interregnum operations shall reimburse the operating party for the reasonable costs of such operations, including direct field labor and benefits, contract labor and services, repairs, replacement parts, supplies and fuels.

f. Within 45 days following the Effective Time the parties shall settle and pay the adjustments provided for in this paragraph.

17. CONFIDENTIALITY. Buyer agrees that all information obtained from the examination of Seller’s files and records shall remain confidential. In the event the transactions contemplated by this Agreement are not closed, Buyer will return to Seller all copies of such files and all other information relating to the Property obtained pursuant to this Agreement, except as to that information obtained from records available to the public. This Agreement and the transaction contemplated herein shall be kept confidential and shall not be disclosed to any other party without the written consent of all Parties. Prior to closing, neither party shall make or release any public statements or announcements, including those to the media, concerning this Agreement or any transactions contemplated by this Agreement without the prior written consent of the other. To the extent that either party has a legal obligation or duty to release any public statements or announcements, such announcements shall describe the transaction as one entered into with "an undisclosed Buyer" or "an undisclosed Seller" and shall not specifically describe the Property to he sold or acquired.

18. DISCLAIMERS. The parties hereby stipulate and agree that neither party has made any representations or warranties of any kind to the other which are not expressly included herein. The parties further stipulate and agree that neither of them have entered into this agreement or changed their respective positions based upon any representations or warranties made by the other party which are not expressly included herein.

 

5

19. MISCELLANEOUS.

A. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon, and inure to the benefit of, the Parties hereto and their respective successors, heirs, administrator, and assigns. Either Buyer or Seller may assign all or any portion of their rights hereunder to a third party.

B. AMENDMENTS. This Agreement may be amended or modified only by a written instrument executed by the Seller and the Buyer.

C. GOVERNING LAW. This Agreement shall be governed by, construed and enforced in accordance with the laws of Kansas. The venue of any action shall be in Miami County, Kansas.

D. MERGER OF PRIOR AGREEMENTS. This Agreement, as may be amended, and the exhibits attached hereto constitute the entire Agreement between Buyer and Seller with respect to the purchase and sale of the Property and supersede all prior Agreements and understandings between the Parties hereto relating to the subject matter hereof.

E. CONSENT OR WAIVER. No consent or waiver, express or implied, by either Party to or of any breach or default by the other Party in the performance of this Agreement shall be construed as a consent or waiver to or of any subsequent breach or default in the performance by such other Party of the same or any other obligations hereunder.

F. COUNTERPARTS. This Agreement may be executed in counterparts and all counterparts shall be considered part of one Agreement binding on all parties hereto.

G. CAPTIONS. Captions herein are for convenience of reference only and in no way define, limit, or expand the scope or intent of this Agreement.

H. SEVERABILITY. In the event that one or more of the provisions hereof shall be held to be illegal, invalid, or unenforceable, such provisions shall be deemed severable and the remaining provisions hereof shall continue in full force and effect.

I. JOINT DRAFTING. The Parties shall be considered joint drafters of this Agreement so as not to construe this contract against one Party as drafter more than the other.

J. SURVIVAL OF TERMS. The terms of this Agreement shall survive Closing and shall not merge with the Assignment and Bill of Sale referenced herein.

K. DEFAULT. Time is of the essence of this Agreement. In the event either Party fails to comply with any of the terms of this Agreement, then this Agreement shall, at the option of the non‑defaulting Party, be terminated. If the non‑defaulting Party does not exercise the option to terminate this Agreement, the non‑defaulting party may require specific performance and also exercise any other legal rights and remedies available under Kansas law. In the event that either party brings suit to enforce the terms of this Agreement or for the breach of any representation or warranty contained herein, the non‑breaching party shall be entitled to recover its cost, expenses and attorney fees incurred in bringing such action and enforcing and collecting any judgment obtained therein from the breaching party.

 

6

In WITNESS WHEREOF THE PARTIES HAVE EXEUCTED THIS AGREEMENT on the ____ day of July, 2016.

SELLER: Moxy Holdings LLC
By:	/s/ Robert Lucas
	Robert Lucas I have authority to bind the company
BUYER: Viking Investments Group, Inc., a Nevada corporation
By:	/s/ James A. Doris
	James A. Doris, President & C.E.O. I have authority to bind the company

  

7

EXHIBIT 'A'

TERBROCK

Lease Details:

Sec 16, T-17S, R-22E

Legal Description and other details to be provided by the Seller.

RENNER

Lease Details:

Sec 16, T-17S, R-22E

Legal Description and other details to be provided by the Seller.

8

EX-10.6

  EXHIBIT 10.6

PURCHASE, SALE AND CAPITAL CONTRIBUTION AGREEMENT

BETWEEN:

ENUTROFF, LLC

a Nevada limited liability company

10380 West 179th St.

Bucyrus, Kansas 66013

(“SELLER”)

AND:

VIKING INVESTMENTS GROUP, INC.

1330 Avenue of the Americas, Suite 23A

New York, NY 10019

(“BUYER”)

RE: PURCHASE AND SALE OF WORKING INTEREST AND OTHER PROPERTY IN “ABC” OIL AND GAS LEASE IN KANSAS

 

1

Purchase Price: As Per Section 3	Closing Date: September 19, 2016
	Effective Date: September 1, 2016

1. CONSIDERATION. The supporting consideration for this Agreement will be the exchange of the Purchase Price for the Property and the agreement to make capital contributions to Seller, and the mutual covenants and agreements contained herein. The Parties stipulate and agree that said consideration is sufficient to support this Agreement.

2. SALE OF PROPERTY. Seller is the owner of certain working interest in and to the oil and gas leases described on Exhibit 'A' attached hereto and incorporated herein by reference (the "Leases"). Seller shall sell, transfer, convey and deliver to Buyer at closing, free and clear of all encumbrances, and Buyer shall purchase and acquire at closing: (a) the entire percentage of the Seller’s working interest in the Leases (the "Working Interests"); and (b) the undivided interest in and to all oil and gas wells, equipment, fixtures and other personal property located upon the Leases and used in connection with oil and gas operations upon the Leases attributable to the Working Interests being purchased by Buyer. The property sold and to be conveyed hereby as hereinabove described may hereinafter be referred to collectively as the "Property."

3. PURCHASE PRICE. Buyer shall purchase a portion of the Property for Seventeen Thousand One Hundred Seventy Five and 00/100 Dollars ($17,175.00) and Seller agrees to make a capital contribution to Buyer of the remainder of the Property in exchange for Sixty Eight Thousand Seven Hundred (68,700) shares of common stock in Buyer which are currently valued at $0.20 per share being traded under the trading symbol VKIN (the “Shares”).

4. ASSIGNMENT FORM. Seller shall at closing execute an Assignment Agreement and Bill of Sale conveying to Buyer the Property, including, without limitation, the stated Working Interest in and to the Leases. Such Assignment Agreement and Bill of Sale shall be in the form requested by the Buyer.

5. CLOSING. Closing shall be on or before September 19, 2016 at a time and place mutually agreeable to Buyer and Seller. This transaction shall be made effective as of 12:01 a.m. on September 1^st, 2016 (the "Effective Time"). At closing Buyer shall tender the full purchase price in collected funds, and shall deliver the agreed upon common stock of Buyer to Seller and Seller shall deliver the fully executed Assignment and Bill of Sale. The respective obligations of each Party to effect the transactions contemplated hereby are subject to the fulfillment or waiver at or prior to closing of the conditions set forth in the paragraphs below:

a.

Financing. Buyer shall have obtained on terms and conditions satisfactory to it all of the financing it needs in order to consummate the purchase of the Property and to fund the working capital requirements of the Buyer after closing; and

b.

Due Diligence. The Buyer shall have conducted and been satisfied with such further due diligence as Buyer deems appropriate to evaluate the viability of the purchase contemplated by this Agreement. During such due diligence process the Seller will give the Buyer and its representatives and professional advisors access to all of the Seller’ properties, facilities, books, documents and records that the Buyer may reasonably request. The Buyer agrees to coordinate its due diligence with the Seller. If the purchase is not completed, upon the written request of the Seller, the Buyer will return to the Seller, or destroy, all information in the Buyer’s possession derived from its due diligence activities and which was not otherwise known by the Buyer.

6. DUE DILIGENCE PERIOD. Buyer may perform any inspections or commission any studies or evaluations of the Property at Buyer's sole cost and expense as part of its due diligence prior to Closing. Such due diligence shall include but not be limited to reservoir studies, title work, surveying, or appraisal.

7. NO BUSINESS RELATIONSHIP. Nothing in this Agreement will be deemed, held, or construed to make either party a partner or associate of the other in the operation of the Leases, or to render either party liable for any debts, liabilities, or obligations incurred by the other party. It is expressly understood and agreed that the relationship between the parties hereto will always be that of vendor and vendee.

8. SELLERS RETENTION. Seller shall not terminate any operating agreements with respect to the Leases prior to the Closing. Seller shall retain all production from said operations prior to closing and shall pay all expenses and liabilities to the date of closing. All continuing services such as utilities, pumper fees and related expenses shall become on the date of closing Buyer’s liability.

2

9. TIME IS OF THE ESSENCE. It is very important to the Parties that this sale is performed in a prudent and timely manner. Time is of the essence, thus all things which are required to be done by certain dates must be done, otherwise such failure shall be deemed a material default. If either party breaches this agreement the non-breaching party may elect to declare this null and void and all right of the defaulting party hereunder shall terminate. If the non-breaching party does not exercise its option to terminate this agreement, said non-breaching party may require specific performance and also exercise any other legal rights and remedies available to it, and said non-breaching party shall be entitled to recover from the breaching party its cost, expenses and attorney fees incurred in enforcing the terms of this agreement or pursuing a remedy as a result of the breach of this agreement.

10. POSSESSION AT CLOSING. Possession of the Property shall be on the date of closing and Seller shall have any risk of casualty loss prior to said date, and Buyer the risk of casualty loss on and after that date. Buyer shall be permitted to come upon the Leases to make such inspections of the Property as it may reasonably desire. Nothing shall be removed from the Leases while making such inspections and respect must be paid to the landowner rights.

11. TAXES. All property, ad valorem, severance or other taxes assessed against the Property shall be prorated as of the closing. All such taxes which are currently due or payable shall be paid by Seller prior to closing. Buyer will bear all applicable sales or similar taxes imposed by any state, county, municipal or other governmental entity as a result of this sale.

12. SELLER’S REPRESENTATIONS AND WARRANTIES. This Agreement is made and entered into based upon the belief that the following representations made by Seller are true and will continue to be true as of the date of closing:

a.	Title. Seller owns the interest in and to the Property which is to be transferred to Buyer at closing. The title to the Property is such that upon purchase by Buyer, the title to the Property will be free of any encumbrances. "Encumbrances" shall mean any, liens, mortgages, security interests, unitization agreements, pooling agreements, orders to plug wells, penalties for overproduction, or production curtailment orders.
b.	Authority to Enter Into This Agreement. (i) Seller have the authority to enter into this Agreement; (ii) its signatories have been properly authorized to enter into this Agreement (including the execution and delivery of any other agreement (including with respect to any Assignment, on the date of that Assignment), document, certificate, or instrument contemplated by this Agreement as to be executed and delivered by Seller) and to perform all of the covenants and agreements contained herein; (iii) Seller are not a party to, subject to, or bound by any agreement or instrument or any statute, regulation, judgment, or decree of any court or governmental body which could at the date of the Closing prevent the performance of any of Seller’s obligations under this Agreement or adversely affect Buyer's Interests obtained in the Property; (iv) to the extent not disclosed, there are no other contracts or agreements relating to the Property; and (v) all suppliers, contractors and subcontractors who have supplied labor or materials upon the Leases have been fully paid.
c.	Warranty. Seller warrants that no act or omission by it or any of its agents or employees could give rise to an action or claim of any kind relating to the Property, the operator of the Leases, or to impair the title to the same. The terms "action or claim" as used in this paragraph shall mean any action in tort, contract or regulatory agency claim, by any person or entity.
d.	Production. Seller warrants that it is not aware of any facts or circumstances which would cause such production to decline at rates greater than normal and customary decline rates for the Working Interests, and Seller agree to provide current run tickets for all of the Leases to the Buyer within 5 business days of the execution hereof and prior to the Closing Date.
e.	Brokers' Fees. Seller has not incurred any liability, contingent or otherwise, for brokers' or finders' fees relating to the transactions contemplated by this Agreement for which Buyer, any of its affiliates, or any of Buyer's interests in the Property shall have any liability.

The terms of this paragraph shall survive closing and shall not merge with the assignment and bill of sale executed by Seller and delivered to Buyer at closing. If it is determined at any time prior to closing that any of the above representations is not true or that there is a substantial likelihood that any of the above representations are not true, Buyer shall have the right to cancel this Agreement.

3

13. WARRANTIES BY SELLER. In the event Buyer ultimately purchases the Leases and related property, Seller warrants that all the "Representations by Seller" contained in paragraph 12 of this Contract are true and in the event that it is ever determined a representation is not true, Seller will, at Buyer's election, either (1) take the necessary remedial action to make the situation consistent with Seller's representation plus pay to Buyer the difference between the Property as represented and the value of the Property once the problem is identified and remedied; or (2) pay to Buyer an amount equal to the cost of remedying the problem plus the difference between the Property as represented and the value of the Property once the problem is identified and remedied. In addition, Seller shall indemnify Buyer against all actual losses and damages sustained as a result of such breach of Seller's warranty. The terms of this paragraph shall survive closing and shall not merge with the assignment and bill of sale executed by Seller and delivered to Buyer at closing.

14. BUYER'S REPRESENTATIONS AND WARRANTIES. This Agreement is made and entered into based upon the belief that the following representations made by Buyer are true and will continue to be true as of the date of closing:

a.	Buyer's Stock. The shares of common stock to be transferred to Seller at Closing represent unimpaired shares of common stock in and to Buyer, which are currently valued at $0.20 per share and are traded under the trading symbol VKIN. Such shares shall be considered restricted securities pursuant to the Securities Act of 1933, as amended, but Buyer warrants that Rule 144 is currently available for the Buyer generally as a safe harbor under Rule 4(a)(1) of the Securities Act of 1933, as amended, as Buyer meets the current information and non-shell requirements therein. Buyer further agrees that Seller shall have piggy-back registration rights as to such shares and that Buyer will include as many of such shares as can be registered pursuant to registration limitations in any Form S-1 registration statement filed by the Buyer during the two years following the Closing Date.
b.	Authority to Enter Into This Agreement. (i) Buyer has the authority to enter into this Agreement; (ii) its signatories have been properly authorized to enter into this Agreement (including the execution and delivery of any other agreement (including with respect to any Assignment on the date of that Assignment), document, certificate, or instrument contemplated by this Agreement as to be executed and delivered by Buyer) and to perform all of the covenants and agreements contained herein; (iii) Buyer is not a party to, subject to, or bound by any agreement or instrument or any statute, regulation, judgment, or decree of any court or governmental body which could at the date of the Closing prevent the performance of any of Buyer's obligations under this Agreement or adversely affect Seller's interest obtained in the common stock of Buyer.
c.	Accredited Investor. Buyer and will acquire the Property for its own account and not with a view to a sale or distribution thereof in violation of the Securities Act and the rules and regulations thereunder, any applicable state Blue Sky Laws or any other applicable securities laws.
d.	Independent Evaluation. Buyer, through their members and their respective affiliates, are sophisticated in the evaluation, purchase, ownership, development, investment in and operation of oil and gas properties. In making its decision to enter into this Agreement and to acquire the subject interest in the Property, Buyer, except to the extent of Seller’s express representations and warranties herein, has relied on its own independent investigation, review and analysis of such information and material as Buyer in its discretion has deemed relevant, which investigation, review and analysis was done by Buyer and their own advisors (including, to the extent deemed necessary by Buyer, legal, tax, economic, environmental, geological and geophysical, engineering and other advisors) and not on any factual representations or opinions of Seller or any representatives or consultants or advisors engaged by or otherwise purporting to represent Seller or any affiliate or principal of Seller.
e.	Brokers' Fees. Buyer has not incurred any liability, contingent or otherwise, for brokers' or finders' fees relating to the transactions contemplated by this Agreement for which Seller, any of its affiliates, or any of Seller’s interests in the Property shall have any liability.

15. WARRANTIES BY BUYER. Buyer warrants that all the "Representations by Buyer" contained in paragraph 14 of this Agreement are true and in the event that it is ever determined a representation is not true, Buyer will, take the necessary remedial action to make the situation consistent with Buyer's representation, and pay to Seller all lost profits, consequential damages and other expenses incurred while waiting for Buyer to complete said remedial action. In addition, Buyer shall indemnify Seller against all actual losses and damages sustained as a result of such breach of Buyer's warranty including all costs incurred to defend any claims, whether or not such claims are ultimately determined to have been valid. The terms of this paragraph shall survive closing and shall not merge with the documents executed and delivered at closing.

4

16. ADJUSTMENTS. The following adjustments shall be made after Closing.

a.	Oil, gas and other production from or attributable to the working interest in and to the Leases to be sold to Buyer which is produced prior to the Effective Time shall belong to Seller, and that which is produced on or after the Effective Time shall belong to Buyer, subject to third party revenue and royalty interests. Buyer will assume all responsibility for notifying the purchaser(s) of production of the change of ownership. Seller and Buyer shall execute such documents as may be reasonably required by any purchaser of production.
b.	Buyer and Seller will effect a cash adjustment to account for Saleable Oil in any oil storage tank on the Leases at the Effective Time. As of the Effective Time the parties will jointly measure the oil above the commercial draw down valve in storage tanks on the Leases (the "Saleable Oil") and when oil is next sold after the Closing Date the amount allocated to Buyer and Seller shall be divided at that time.
c.	The parties shall jointly read utility meters so that utility costs can be allocated pursuant to this Agreement with the adjustment for Seller's share to be made when the utility bill is next received after the Effective Time.
d.	Seller shall be responsible for all costs of ownership and operation of the Leases up to the Effective Time, and Buyer shall be responsible for all such costs from and after the Effective Time.
e.	If Seller operates the Leases for the benefit of Buyer after the Effective Time, or if Buyer operates the Leases prior to the Effective Time for the benefit of Seller, then the party benefitting from such interregnum operations shall reimburse the operating party for the reasonable costs of such operations, including direct field labor and benefits, contract labor and services, repairs, replacement parts, supplies and fuels.
f.	Within 45 days following the Effective Time the parties shall settle and pay the adjustments provided for in this paragraph.

17. CONFIDENTIALITY. Buyer agrees that all information obtained from the examination of Seller’s files and records shall remain confidential. In the event the transactions contemplated by this Agreement are not closed, Buyer will return to Seller all copies of such files and all other information relating to the Property obtained pursuant to this Agreement, except as to that information obtained from records available to the public. This Agreement and the transaction contemplated herein shall be kept confidential and shall not be disclosed to any other party without the written consent of all Parties. Prior to closing, neither party shall make or release any public statements or announcements, including those to the media, concerning this Agreement or any transactions contemplated by this Agreement without the prior written consent of the other. To the extent that either party has a legal obligation or duty to release any public statements or announcements, such announcements shall describe the transaction as one entered into with "an undisclosed Buyer" or "an undisclosed Seller" and shall not specifically describe the Property to he sold or acquired.

18. DISCLAIMERS. The parties hereby stipulate and agree that neither party has made any representations or warranties of any kind to the other which are not expressly included herein. The parties further stipulate and agree that neither of them have entered into this agreement or changed their respective positions based upon any representations or warranties made by the other party which are not expressly included herein.

19. MISCELLANEOUS.

A. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon, and inure to the benefit of, the Parties hereto and their respective successors, heirs, administrator, and assigns. Either Buyer or Seller may assign all or any portion of their rights hereunder to a third party.

B. AMENDMENTS. This Agreement may be amended or modified only by a written instrument executed by the Seller and the Buyer.

C. GOVERNING LAW. This Agreement shall be governed by, construed and enforced in accordance with the laws of Kansas. The venue of any action shall be in Miami County, Kansas.

D. MERGER OF PRIOR AGREEMENTS. This Agreement, as may be amended, and the exhibits attached hereto constitute the entire Agreement between Buyer and Seller with respect to the purchase and sale of the Property and supersede all prior Agreements and understandings between the Parties hereto relating to the subject matter hereof.

E. CONSENT OR WAIVER. No consent or waiver, express or implied, by either Party to or of any breach or default by the other Party in the performance of this Agreement shall be construed as a consent or waiver to or of any subsequent breach or default in the performance by such other Party of the same or any other obligations hereunder.

5

F. COUNTERPARTS. This Agreement may be executed in counterparts and all counterparts shall be considered part of one Agreement binding on all parties hereto.

G. CAPTIONS. Captions herein are for convenience of reference only and in no way define, limit, or expand the scope or intent of this Agreement.

H. SEVERABILITY. In the event that one or more of the provisions hereof shall be held to be illegal, invalid, or unenforceable, such provisions shall be deemed severable and the remaining provisions hereof shall continue in full force and effect.

I. JOINT DRAFTING. The Parties shall be considered joint drafters of this Agreement so as not to construe this contract against one Party as drafter more than the other.

J. SURVIVAL OF TERMS. The terms of this Agreement shall survive Closing and shall not merge with the Assignment and Bill of Sale referenced herein.

K. DEFAULT. Time is of the essence of this Agreement. In the event either Party fails to comply with any of the terms of this Agreement, then this Agreement shall, at the option of the non‑defaulting Party, be terminated. If the non‑defaulting Party does not exercise the option to terminate this Agreement, the non‑defaulting party may require specific performance and also exercise any other legal rights and remedies available under Kansas law. In the event that either party brings suit to enforce the terms of this Agreement or for the breach of any representation or warranty contained herein, the non‑breaching party shall be entitled to recover its cost, expenses and attorney fees incurred in bringing such action and enforcing and collecting any judgment obtained therein from the breaching party.

In WITNESS WHEREOF THE PARTIES HAVE EXEUCTED THIS AGREEMENT on the ____ day of August, 2016.

SELLER: Enutroff, LLC
By:	/s/ James Loeffelbein
	James Loeffelbein
	I have authority to bind the company
BUYER: Viking Investments Group, Inc., a Nevada corporation
By:	/s/ James A. Doris
	James A. Doris, President & C.E.O.
	I have authority to bind the company

6

EXHIBIT 'A'

ABC LEASE

Lease Details:

Sec 22, T-17S, R-22E

Legal Description and other details to be provided by the Seller.

7

EX-10.7

EXHIBIT 10.7

ACKNOWLEDGEMENT & AGREEMENT

RECITALS:

A.	On or about April 14th, 2016 Viking Investments Group, Inc. (“Viking”) entered into a Purchase, Sale and Capital Contribution Agreement (the “EGO Agreement”) with Euramerica Gas & Oil Corp. (“EGO”), pursuant to which Viking agreed to purchase, free and clear of all encumbrances, EGO’s entire working interest in the following oil & gas leases in Eastern Kansas: (i) ABC; (ii) Wilson A; and (iii) Griffith (collectively, the “EGO WI’s”). In exchange for the aforementioned working interests Viking agreed to pay EGO $460,000 in cash (the “Cash Component”), and issue EGO 2,400,000 common shares in the capital stock of Viking (the “Stock Component”).
B.	Viking’s obligations under the EGO Agreement were conditional upon Viking obtaining financing to complete the transaction.
C.	The closing date of the transaction was scheduled initially for May 15th, 2016. By mutual agreement, the parties extended the closing date to May 31st, 2016 and then to June 15th, 2016 as a result of Viking being unable to secure satisfactory financing by such dates.
D.	EGO is willing to extend the closing date to July 1st, 2016 subject to the terms of this Agreement.
E.	In the event Viking cannot pay the Cash Component to EGO on or before July 1st, 2016, Global Equity Funding, LLC (“Global”) and Coal Creek Energy, LLC (“Coal Creek”) are willing to pay the Cash Component to EGO subject to the terms of this Agreement.

AGREEMENT:

FOR VALUE RECEIVED, the parties agree as follows:

1.	Recitals. The recitals above are true and correct and hereby form an integral part of this Agreement.
2.	Extension. Viking and EGO hereby agree to extend the closing date of the EGO Agreement to July 1st, 2016.
3.	Closing. In the event Viking is unable to pay the Cash Component to EGO on the Closing Date, Global and Coal Creek shall pay such amount to EGO on such date. Concurrent with and subject to such payment by Global and/or Coal Creek, Viking shall issue the Stock Component to EGO. If none of Viking, Global or Coal Creek pay the Cash Component to EGO as aforesaid, all agreements amongst any of the parties concerning the EGO WI’s shall be at an end, and EGO shall be free to sell the EGO WI’s to any other party.
4.	Title To WI’s. If Viking pays the Cash Component along with the issue of the stocks in the name of EGO, EGO shall forthwith execute and deliver an Assignment Agreement transferring title to the EGO WI’s to Viking, or a subsidiary of Viking if so directed, free and clear of all encumbrances. If Global and/or Coal Creek pays the Cash Component to EGO, EGO shall forthwith execute and deliver an Assignment Agreement transferring title to the EGO WI’s to Global or Coal Creek, as applicable, free and clear of all encumbrances.

Agreement – Viking / Euramerica / Global / Coal Creek

1

5. Option to Purchase. If Global and/or Coal Creek pay the Cash Component to EGO and Viking issues the stocks in the name of EGO, Global and Coal Creek will receive title to the EGO WI’s as per sections 3 and 4 herein, the parties hereby agree as follows:

 

a.	Each of Global and Coal Creek hereby grant to Viking the option to purchase from Global and Coal Creek all, but not less than all, of the EGO WI’s. The purchase price to be paid by Viking for the EGO WI’s shall be equal to $506,000 (the “New EGO WI Price”).
b.	This option granted above must be exercised by Viking within sixty (60) days from the date Global and/or Coal Creek pay the Cash Component to EGO.
c.	Concurrent with Viking purchasing the EGO WI’s from Global and Coal Creek Viking shall also purchase from Global, Global’s working interest (collectively, the “Global WI’s”) in the following leases in Eastern Kansas: (i) Elam/Hahn (minimum 25% working interest); (ii) Wilson A. (East Wilson) (minimum 15% working interest); and (ii) L. Wilson (West Wilson) (minimum 12% working interest), on the terms and conditions agreed to by Global and Viking.
d.	During the Option Period, neither Global nor Coal Creek shall sell, offer for sale or entertain any offers to sell, the EGO WI’s, in whole or in part.
e.	Upon payment by Viking of the New EGO WI price and the price to be paid by Viking to Global in connection with subparagraph 5 (c) above, Global and/or Coal Creek shall forthwith execute and deliver one or more Assignment Agreements transferring title to the EGO WI’s and Global WI’s to Viking, or a subsidiary of Viking if so directed, free and clear of all encumbrances.

6.	Other Documents. The parties agree to promptly execute and deliver all such documents and take all such action reasonably necessary or appropriate to give effect to the provisions and intent of this Agreement.
7.	Enurement. This Agreement shall be binding upon and enure to the benefit of the parties hereto and their respective successors and permitted assigns.
8.	Governing Law. This Agreement shall be governed by, construed and enforced in accordance with the laws of Kansas. The venue of any action shall be in Miami County, Kansas.

Agreement – Viking / Euramerica / Global / Coal Creek

2

DATED effective this 20^th day of June, 2016.

VIKING INVESTMENTS GROUP, INC.
	/s/ James A. Doris
Name:	James A. Doris
Title:	President & C.E.O.
EURAMERICA GAS & OIL CORP.
	/s/ Claudio Coltellini
Name:	Claudio Coltellini
Title:	C.E.O.
GLOBAL EQUITY FUNDING, LLC
	/s/ H. M. Burstein
Name:	H. M. Burstein
Title:	President
COAL CREEK ENERGY, LLC
	/s/ John Loeffelbein
Name:	John Loeffelbein
Title:	President

Agreement – Viking / Euramerica / Global / Coal Creek

3

EX-31.1

EXHIBIT 31.1

VIKING ENERGY GROUP, INC.

Certification Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, James Doris, Principal Executive Officer, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Viking Energy Group, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:

(a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that was materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors:

(a)	all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 15, 2017	By:	/s/ James Doris
		James Doris
		Principal Executive Officer

EX-31.2

EXHIBIT 31.2

VIKING ENERGY GROUP, INC.

Certification Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Tom Simeo Principal Financial Officer, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Viking Energy Group, Inc;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant’s as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:

(a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that was materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors:

(a)	all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

   

Date: May 15, 2017	By:	/s/ Tom Simeo
		Tom Simeo
		Principal Financial Officer

EX-32.1

EXHIBIT 32.1

VIKING ENERGY GROUP, INC.

Certification Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Viking Energy Group, Inc. (the Company) on Form 10-Q for the quarterly period ended March 31, 2017, as filed with the Securities and Exchange Commission on the date hereof (the Report), I James Doris, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

May 15, 2017	By:	/s/ James Doris
		James Doris
		Principal Executive Officer

EX-32.2

EXHIBIT 32.2

VIKING ENERGY GROUP, INC.

Certification Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Viking Energy Group, Inc. (the Company) on Form 10-Q for the quarterly period ended March 31, 2017, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Tom Simeo, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

May 15, 2017	By:	/s/ Tom Simeo
		Tom Simeo
		Principal Financial Officer

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 10, 2017
Document And Entity Information
Entity Registrant Name	VIKING ENERGY GROUP, INC.
Entity Central Index Key	0001102432
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filer	No
Entity's Reporting Status Current	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		59,455,134
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2017

XML

Consolidated Balance Sheets - USD ($)	Mar. 31, 2017	Dec. 31, 2016
CURRENT ASSETS
Cash	$ 296,803	$ 18,605
Accounts receivable	45,042	66,176
Other receivable - joint venture	76,939	76,939
Prepaid expenses	96,717	87,532
Total current assets	515,501	249,252
Oil and gas properties, full cost method
Proved developed producing oil and gas properties, net	1,741,265	1,765,373
Undeveloped and non-producing oil and gas properties, net	1,210,315	1,237,489
Total Oil and gas properties, net	2,951,580	3,002,862
Long term investment		106,930
Derivative asset	5,843
TOTAL ASSETS	3,472,924	3,359,044
CURRENT LIABILITIES
Accrued expenses and other current liabilities	183,949	179,421
Accounts payable	127,397	121,365
Derivative liability	771,493	1,136,894
Amount due to directors	1,176,792	1,072,576
Current portion of long term debt - net of debt discount	1,416,136	1,302,476
Total current liabilities	3,675,767	3,812,732
Long term debt - net of current portion and debt discount	1,537,879	1,579,469
Asset retirement obligation	841,854	833,017
TOTAL LIABILITIES	6,055,500	6,225,218
Commitments and contingencies (Note 7)
STOCKHOLDERS' DEFICIT
Preferred stock, $0.001 par value, 5,000,000 shares authorized, 28,092 shares issued and outstanding as of March 31, 2017 and December 31, 2016	28	28
Common stock, $0.001 par value, 100,000,000 shares authorized, 59,455,134 and 53,093,192 shares issued, issuable and outstanding as of March 31,2017 and December 31,2016 respectively.	59,455	53,093
Additional Paid-In Capital	12,731,294	11,526,847
Prepaid equity-based compensation	(404,324)	(35,068)
Accumulated other comprehensive income (loss)		(1,446)
Accumulated deficit	(14,969,029)	(14,409,628)
TOTAL STOCKHOLDERS' DEFICIENCY	(2,582,576)	(2,866,174)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY	$ 3,472,924	$ 3,359,044

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2017	Dec. 31, 2016
STOCKHOLDERS' EQUITY
Preferred stock Series, par value	$ 0.001	$ 0.001
Preferred stock Series, authorized	5,000,000	5,000,000
Preferred stock Series, issued	28,092	28,092
Preferred stock Series, outstanding	28,092	28,092
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized	100,000,000	100,000,000
Common stock, issued	59,455,134	53,093,192
Common stock, outstanding	59,455,134	53,093,192

XML

Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenue
Oil and gas sales	$ 206,863	$ 40,722
Operating expenses
Lease operating costs	160,518	40,984
General and administrative	270,341	120,195
Stock based compensation	347,404	165,555
Accretion - ARO	8,837	5,108
Depreciation, depletion & amortization	51,282	20,366
Total operating expenses	838,382	352,208
Loss from operations	(631,519)	(311,486)
Other income (expenses)
Interest expense	(256,710)	(431,707)
Change in fair value of derivatives	336,013	(1,655,536)
Loss on sale of investments	(7,185)
Total other income (expenses)	72,118	(2,087,243)
Net loss before income taxes	(559,401)	(2,398,729)
Income tax expense
Net loss	(559,401)	(2,398,729)
Other comprehensive income (loss)
Unrealized gain on securities available-for-sale	1,446	(7,265)
Net Comprehensive loss	$ (557,955)	$ (2,405,994)
Loss per weighted average number of common shares outstanding - basic	$ (0.01)	$ (0.06)
Weighted average number of common shares outstanding - basic	56,766,673	37,741,400

XML

Consolidated Statement Of Cash Flows (Unaudited) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Cash flows from operating activities:
Net loss	$ (559,401)	$ (2,398,729)	$ (5,445,187)
Adjustments to reconcile net loss to cash used in operating activities:
Derivative (gain) loss	(336,013)	1,655,536
Amortization of prepaid expenses	90,815
Stock based compensation	347,404	165,555
Loss on sale of investments	7,185
Depreciation, depletion and amortization	51,282	20,366
Accretion - Asset retirement obligation	8,837	5,108
Amortization of debt discount	178,153	387,723
Changes in operating assets and liabilities
Accounts receivable	21,134	(7,604)
Accounts payable	6,032	(6,400)
Accrued expenses and other current liabilities	21,433	61,791
Amounts due to directors	39,892	35,194
Net cash used in operating activities	(123,247)	(81,460)
Cash flows from investing activities:
Purchase of oil and gas properties		(1,350,000)
Proceeds from sale of investments	101,191
Net cash used in investing activities	101,191	(1,350,000)
Cash flows from financing activities:
Proceeds from amount due to directors	3,900
Repayments of amount due to directors	(144,480)	(35,775)
Proceeds from sale of common stock	331,667
Proceeds from long term debt	331,667	1,480,000
Repayment of long term debt	(222,500)
Net cash provided by financing activities	300,254	1,444,225
Net increase (decrease) in cash	278,198	12,765
Cash, beginning of year	18,605	30,585	30,585
Cash, end of year	296,803	43,350	$ 18,605
Supplemental Cash Flow Information
Cash paid for: Interest	67,136
Cash paid for: Income taxes
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Conversion of convertible note payable		6,778
Issuance of shares for oil and gas property acquisitions		820,250
Issuance of warrants for 4,062,500 common shares as debt discount		416,315
Prepayment of contract through amounts due directors	100,000
Long term debt paid through amounts due directors	104,904
Issuance of shares for contract services	700,920
Sale of shares through satisfaction of unrelated notes payable	127,215
Accrued expenses exchanged for long term debt	$ 9,500

XML

Consolidated Statement of Changes in Stockholders' Deficit (Unaudited) - USD ($)	Common Stock	Shares to be issued	Preferred Stock	Additional Paid-in Capital	Prepaid Equity Based Compensation	Accumulated Other Comprehensive Income	Accumulated Deficit	Total
Beginning Balance, Shares at Dec. 31, 2015	30,333,993		28,092
Beginning Balance, Amount at Dec. 31, 2015	$ 30,334		$ 28	$ 7,960,372	$ (145,562)	$ (158,424)	$ (8,964,441)	$ (1,277,693)
Shares issued in satisfaction of debt, shares	300,926
Shares issued in satisfaction of debt, amount	$ 301			9,810				10,111
Derivative liability adjustment - satisfaction of convertible debt				685,668				685,668
Shares issued for consulting services, Shares	1,315,000
Shares issued for consulting services, Amount	$ 1,315			164,185				165,500
Shares issued in acquisition of oil and gas properties, shares	14,862,021
Shares issued in acquisition of oil and gas properties, amount	$ 14,862			1,430,829				1,445,691
Shares issued as prepaid equity-based compensation, shares	5,000,000
Shares issued as prepaid equity-based compensation, amount	$ 5,000			795,000	(800,000)
Cancellation of shares issued as prepaid equity-based compensation, shares	(4,000,000)
Cancellation of shares issued as prepaid equity-based compensation, amounts	$ (4,000)			(636,000)	640,000
Sale of stock, shares	2,841,667
Sale of stock, amount	$ 2,842			423,408				426,250
Capital issuance costs				(37,500)				(37,500)
Shares issued as payment for interest expense, shares	1,931,250
Shares issued as payment for interest expense, amount	$ 1,931			324,444				326,375
Shares issued as additional discount on debt, shares	508,335
Shares issued as additional discount on debt, amount	$ 508			75,742				76,250
Warrants issued for services				330,889				330,889
Amortization of prepaid equity-based compensation					270,494			270,494
Unrealized gain (loss) on securities held for sale						156,978		156,978
Net loss							(5,445,187)	(5,445,187)
Ending Balance, Shares at Dec. 31, 2016	53,093,192		28,092
Ending Balance, Amount at Dec. 31, 2016	$ 53,093		$ 28	11,526,847	(35,068)	(1,446)	(14,409,628)	(2,866,174)
Derivative liability adjustment - satisfaction of convertible debt				35,232				35,232
Shares issued for consulting services, Shares	62,500
Shares issued for consulting services, Amount	$ 63			12,437				12,500
Shares issued as prepaid equity-based compensation, shares	3,240,000
Shares issued as prepaid equity-based compensation, amount	$ 3,240			700,920	(704,160)
Sale of stock, shares	3,059,442
Sale of stock, amount	$ 3,059			455,858				458,917
Amortization of prepaid equity-based compensation					334,904			334,904
Unrealized gain (loss) on securities held for sale						1,446		1,446
Net loss							(559,401)	(559,401)
Ending Balance, Shares at Mar. 31, 2017	59,455,134		28,092
Ending Balance, Amount at Mar. 31, 2017	$ 59,455		$ 28	$ 12,731,294	$ (404,324)		$ (14,969,029)	$ (2,582,576)

XML

Nature of Business and Going Concern

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Note 1. Nature of Business and Going Concern

Viking Energy Group, Inc. (“Viking” or the “Company”) was incorporated under the laws of the State of Florida on May 3, 1989, as Sparta Ventures Corp. and remained inactive until June 27, 1998. After several name changes, the Company merged with and into a wholly-owned subsidiary, SinoCubate, Inc., which remained the surviving entity of the merger. SinoCubate, Inc. was formed in the State of Nevada on September 11, 2008. The merger resulted in a change of name of the Company from Synthenol Inc. to SinoCubate, Inc., and a change in the state of incorporation of the Company from Florida to Nevada. On June 13, 2012, the Company changed its name to Viking Investments Group, Inc., and the Company’s ticker symbol was changed to “VKIN.” On March 17, 2017, the Company changed its name to Viking Energy Group, Inc.

The Company's business plan is to engage in the acquisition, exploration, development and production of oil and natural gas properties, both individually and through collaborative partnerships with other companies in this field of endeavor. On March 8, 2016, the Company incorporated a wholly owned subsidiary, Viking Oil & Gas (Canada) ULC, in Alberta, Canada, to hold its Canadian oil and gas interests. In November of 2014, the Company entered into its first contract relative to oil and gas activities involving jointly controlled assets and related liabilities by purchasing an undivided 50% interest in the Joffre project located in Alberta, Canada. On February 23, 2016, the Company closed on the acquisition of working interests in four leases with access to the mineral rights (oil and gas) concerning approximately 281 acres of property in Miami and Franklin Counties in eastern Kansas. On August 30, 2016, the Company incorporated an additional wholly owned subsidiary, Mid-Con Petroleum, LLC (“Mid-Con”), in the State of Kansas to hold its current acquisitions in the central United States. On October 4, 2016, the Company, through Mid-Con, completed an acquisition whereby the Company (i) increased its working interest in three existing oil and gas leases in Miami and Franklin Counties in Eastern Kansas, and (ii) acquired a working interest in four new oil and gas leases in the same region, comprising approximately 660 acres of property.

These consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company had a net comprehensive loss of $557,955, and $2,405,994 for the three months ended March 31, 2017 and 2016, respectively. The Company has accumulated a stockholders’ deficit of $2,582,576 as of March 31, 2017. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party advances; however, there is no assurance of additional funding being available. These consolidated financial statements do not include any adjustments to the recorded assets or liabilities that might be necessary should the Company have to curtail operations or be unable to continue in existence.

XML

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Note 2. Summary of Significant Accounting Policies

a) Basis of Presentation 

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto contained in Viking’s latest Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments (unless otherwise indicated), necessary for a fair presentation of the financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

b) Basis of Consolidation

The financial statements presented herein reflect the consolidated financial results of the Company and its wholly owned subsidiaries, Viking Oil & Gas (Canada) ULC, a Canadian corporation formed on March 8, 2016, to provide a base of operations for properties in Canada, and Mid-Con Petroleum, LLC, formed on August 30, 2016, to provide a base of operations for properties in the Central United States. All significant intercompany transactions and balances have been eliminated upon consolidation.

c) Use of Estimates in the Preparation of Financial Statements

The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts and timing of revenues and expenses, the reported amounts and classification of assets and liabilities, and disclosure of contingent assets and liabilities. The Company's actual results could vary materially from management's estimates and assumptions. Significant areas requiring the use of management estimates relate to the determination of expected tax rates for future income tax recoveries, stock-based compensation, embedded derivative liabilities, asset retirement obligations and impairment of long-lived assets.

The estimates of proved, probable and possible oil and gas reserves are used as significant inputs in determining the depletion of oil and gas properties and the impairment of proved and unproved oil and gas properties. There are numerous uncertainties inherent in the estimation of quantities of proved, probable and possible reserves and in the projection of future rates of production and the timing of development expenditures. Similarly, evaluations for impairment of proved and unproved oil and gas properties are subject to numerous uncertainties including, among others, estimates of future recoverable reserves and commodity price outlooks.

Actual results could differ from the estimates and assumptions utilized.

d) Financial Instruments 

ASC Topic 820-10, “Fair Value Measurement” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 820-10, defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for other receivable – related party, accrued expenses and other current liabilities, accounts payable, derivative liabilities, amount due to directors, and convertible notes each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

· Level 1: inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

·  Level 2: inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

· Level 3: inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Assets and liabilities measured at fair value as of March 31, 2017 are classified below based on the three fair value hierarchy described above:

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Gains (Losses)
Financial Assets
Long term investment	$	-	$	-	$	-	$	1,446
Commodity Derivative		-		5,843		-		66,904
	$	-	$	5,843	$	-	$	68,350
Financial liabilities
Derivative liabilities	$	-	$	-	$	771,493	$	269,109
	$	-	$	-	$	771,493	$	269,109

Assets and liabilities measured at fair value as of December 31, 2016 are classified below based on the three fair value hierarchy described above:

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Gains (Losses)
Financial Assets
Long term investment	$	106,930	$	-	$	-	$	156,978
	$	106,930	$	-	$	-	$	156,978
Financial liabilities
Derivative liabilities	$	-	$	-	$	1,075,833	$	265,448
Commodity Derivative		-		61,061		-		(61,061	)
	$	-	$	61,061	$	1,075,833	$	204,387

The Company’s long term investment consisted of 1,437,500 common shares of Tanager Energy Inc., as of December 31, 2016, which is traded on the TSX Venture Exchange (Toronto Stock Exchange). During the three months ended March 31, 2017, the Company sold these shares. The change in the fair value of this investment that has been recognized as an unrealized gain in other comprehensive income on the statement of operations and comprehensive loss was $1,446 for the three months ended March 31, 2017, and $(7,265) for the three months ended March 31, 2016.

The Company had commodity financial derivatives in place at March 31, 2017. The Company does not designate its commodities derivative instruments as hedges and therefore does not apply hedge accounting. Changes in fair value of derivative instruments subsequent to the initial measurement are recorded as change in fair value on derivative liability, in other income (expense). The estimated fair value amounts of the Company’s commodity derivative instruments have been determined at discrete points in time based on relevant market information which resulted in the Company classifying such derivatives as Level 2. Although the Company’s commodity derivative instruments are valued using public indices, the instruments themselves are traded with unrelated counterparties and are not openly traded on an exchange.

The Company uses the Black-Scholes model to value its derivative liabilities. This model takes into account inputs such as contract terms, including maturity and market parameters, including assumptions associated with interest rates, volatility and credit worthiness. The embedded derivative assets and liabilities of the Company were $5,843 and $771,493 as of March 31, 2017, and $0 and $1,075,833 as of December 31, 2016, respectively. The change in the fair value of the derivative assets and liabilities for the three months ended March 31, 2017 consisted of an increase of $66,904 associated with commodity derivatives, a decrease in derivative liabilities of $304,341 associated with warrants and the conversion features of convertible debt, and a reduction of $35,232 associated with the satisfaction of certain convertible debt and a gain recognized in the statement of operations and comprehensive loss in the amount of $336,013.

e) Cash and Cash Equivalents 

Cash and cash equivalents include cash in banks and highly liquid investment securities that have original maturities of three months or less. At March 31, 2017 and December 31, 2016, the Company does not have any cash deposits in excess of FDIC insured limits.

f) Accounts receivable

Accounts receivable consist of oil and gas receivables. The Company has classified these as short-term assets in the balance sheet because the Company expects repayment or recovery within the next 12 months. The Company evaluates these accounts receivable for collectability and, when necessary, records allowances for expected unrecoverable amounts. The Company deems all accounts receivable to be collectable, and has not recorded any allowance for doubtful accounts.

g) Prepaid equity based compensation

Prepaid equity-based expenses represent amounts paid in advance through the issuance of restricted shares of stock, for future contractual benefits to be received. These expenses paid in advance are recorded as prepaid equity-based compensation as a component of “Stockholders’ Deficit” and then amortized to the statements of operations and comprehensive loss over the life of the contract using the straight-line method. At March 31, 2017 and December 31, 2016, the balances of the prepaid equity-based compensation were comprised of the following:

	March 31, 2017		December 31, 2016
In March 2016, three one-year consulting agreements with three unrelated parties for services related to the petroleum industry for a combined total amount of $800,000.		-		35,068
In January 2017, a six-month consulting agreement for services related to marketing and promotion of the Company on various platforms associated with the petroleum industry and the financial markets for a total amount of $660,000.		364,641		-
In February 2017, a one-year consulting agreement for services related to investor relations, market exposure and content development for a total amount of $44,160.		39,683
	$	404,324	$	35,068

h) Oil and Gas Properties

The Company uses the full cost method of accounting for its investment in oil and natural gas properties. Under this method of accounting, all costs associated with acquisition, exploration and development of oil and gas reserves, including directly related overhead costs, are capitalized. General and administrative costs related to production and general overhead are expensed as incurred.

All capitalized costs of oil and gas properties, including the estimated future costs to develop proved reserves, are amortized on the unit of production method using estimates of proved reserves. Disposition of oil and gas properties are accounted for as a reduction of capitalized costs, with no gain or loss recognized unless such adjustment would significantly alter the relationship between capitalized costs and proved reserves of oil and gas, in which case the gain or loss is recognized in operations. Unproved properties and major development projects are not amortized until proved reserves associated with the projects can be determined or until impairment occurs. If the results of an assessment indicate that the properties are impaired, the amount of the impairment is included in loss from continuing operations before income taxes and the adjusted carrying amount of the unproved properties is amortized on the unit-of-production method.

Depreciation, depletion and amortization expense utilizing the unit-of-production method for the Company’s oil and gas properties for the three months ended March 31, 2017 and 2016 were as follows:

Oil and Gas Properties by Geographical Cost Center
	Three months ended,
	March 31,
Cost Center	2017		2016
Canada	$	17,007	$	2,064
United States		34,275		18,302
	$	51,282	$	20,366

i) Limitation on Capitalized Costs

Under the full-cost method of accounting, we are required, at the end of each reporting date, to perform a test to determine the limit on the book value of our oil and natural gas properties (the “Ceiling” test). If the capitalized costs of our oil and natural gas properties, net of accumulated amortization and related deferred income taxes, exceed the Ceiling, this excess or impairment is charged to expense. The expense may not be reversed in future periods, even though higher oil and natural gas prices may subsequently increase the Ceiling. The Ceiling is defined as the sum of:

(a) the present value, discounted at 10 percent, and assuming continuation of existing economic conditions, of 1) estimated future gross revenues from proved reserves, which is computed using oil and natural gas prices determined as the unweighted arithmetic average of the first-day-of-the-month price for each month within the 12-month hedging arrangements pursuant to SAB 103, less 2) estimated future expenditures (based on current costs) to be incurred in developing and producing the proved reserves, plus

(b) the cost of properties not being amortized; plus

(c) the lower of cost or estimated fair value of unproven properties included in the costs being amortized, net of

(d) the related tax effects related to the difference between the book and tax basis of our oil and natural gas properties.

j) Oil and Gas Reserves

Reserve engineering is a subjective process that is dependent upon the quality of available data and the interpretation thereof, including evaluations and extrapolations of well flow rates and reservoir pressure. Estimates by different engineers often vary sometimes significantly. In addition, physical factors such as the results of drilling, testing and production subsequent to the date of an estimate, as well as economic factors such as changes in product prices, may justify revision of such estimates. Because proved reserves are required to be estimated using recent prices of the evaluation, estimated reserve quantities can be significantly impacted by changes in product prices.

k) Loss per Share

Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and, adjusted by any effects of warrants and options outstanding, if dilutive, that may add to the number of common shares during the period. At March 31, 2017 and 2016, there were 6,582,259 and 6,059,537 common stock equivalents respectively, that were anti-dilutive and were not included in the calculation.

l) Revenue Recognition 

All revenue is recognized when persuasive evidence of an arrangement exists, the service or sale is complete, the price is fixed or determinable and collectability is reasonably assured. Revenue is derived from the sale of crude oil and natural gas. Revenue from crude oil and natural gas sales is recognized when the product is delivered to the purchaser and collectability is reasonably assured. The Company follows the “sales method” of accounting for oil and natural gas revenue, so it recognizes revenue on all natural gas or crude oil sold to purchasers.

m) Comprehensive Loss

FASB ASC 220 “Comprehensive Income,” establishes standards for the reporting and presentation of comprehensive income and its components in the consolidated financial statements. For the three months ended March 31, 2017 and 2016, comprehensive income (loss) was $1,446 and $(7,265) respectively, and consisted primarily of unrealized gains and (losses) on available for sale securities.

n) Income Taxes

The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets likely. The Company did not incur any material impact to its financial condition or results of operations due to the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company is subject to U.S federal jurisdiction income tax examinations for the tax years 2007 through 2016. In addition, the Company is subject to state and local income tax examinations for the tax years 2007 through 2016.

o) Stock-Based Compensation 

The Company may issue stock options to employees and stock options or warrants to non-employees in non-capital raising transactions for services and for financing costs. In accordance with guidance in ASC Topic 718, the cost of stock options and warrants issued to employees and non-employees is measured on the grant date based on the fair value. The fair value is determined using the Black-Scholes option pricing model. The resulting amount is charged to expense on the straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period.

The fair value of stock warrants was determined at the date of grant using the Black-Scholes option pricing model. The Black-Scholes option model requires management to make various estimates and assumptions, including expected term, expected volatility, risk-free rate, and dividend yield. The expected term represents the period of time that stock-based compensation awards granted are expected to be outstanding and is estimated based on considerations including the vesting period, contractual term and anticipated employee exercise patterns. Expected volatility is based on the historical volatility of the Company’s stock. The risk-free rate is based on the U.S. Treasury yield curve in relation to the contractual life of stock-based compensation instrument. The dividend yield assumption is based on historical patterns and future expectations for the Company dividends.

The following table represents stock warrant activity as of and for the three months ended March 31, 2017:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
Warrants Outstanding – December 31, 2016		5,720,834		0.19		-		-
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited/expired/cancelled		-				-		-
Warrants Outstanding – March 31, 2017		5,720,834	$	0.19	5.0 years		$	-
Outstanding Exercisable – December 31, 2016		5,720,834	$	0.19	5.0 years		$	-
Outstanding Exercisable – March 31, 2017		5,720,834	$	0.19	5.0 years		$	-

p) Long-term Investment 

Management determines the appropriate classification of investment securities at the time of purchase. Securities are classified held-to-maturity when the Company has both the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are stated at amortized cost. Securities that are bought and held principally for the purpose of selling in the near term are classified as trading securities and reported at fair value, with unrealized gains and losses included in earnings. Securities not classified as held-to-maturity or trading are classified as available-for-sale. Available-for-sale securities are stated at fair value, the changes in the market value of available-for-sale securities, excluding other-than-temporary impairments, are reflected in Other Comprehensive Income, with the impairment losses, net of income taxes, charged to net income in the period in which it occurs.

The fair value of securities is based on quoted market prices. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities. A decline in the market value of any available-for-sale or held-for-maturity security below cost that is deemed to be other-then-temporary results in a reduction in carrying amount to fair value.

Impairments that are considered other-than-temporary are recognized as a loss in the consolidated statements of operations and comprehensive loss. The Company considers various factors in reviewing impairments, including the length of time and extent to which fair value has been less than the Company’s cost basis, the financial condition and near-term prospects of the issuer, and the Company’s intent and ability to hold the investments for a period of time sufficient to allow for any anticipated recovery in market value.

As of March 31, 2017, and December 31, 2016, the Company had no trading and held-to-maturity securities.

The Company’s long term investment consisted of 1,437,500 common shares of Tanager Energy Inc., as of December 31, 2016, which is traded on the TSX Venture Exchange (Toronto Stock Exchange). During the three months ended March 31, 2017, the Company sold these shares. The change in the fair value of this investment, recognized as an unrealized gain in other comprehensive income on the statement of operations and comprehensive loss was $1,446 and ($7,265) for the three months ended March 31, 2017 and 2016, respectively.

q) Impairment of long-lived assets 

In accordance with ASC 360, "Accounting for the Impairment or Disposal of Long-Lived Assets", the Company is required to review its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value.

Assets are grouped and evaluated at the lowest level for their identifiable cash flows that are largely independent of the cash flows of other groups of assets. The Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount of the asset to the future estimated cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds estimated expected undiscounted future cash flows, the Company measures the amount of impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is generally determined by using the asset's expected future discounted cash flows or market value. The Company estimates fair value of the assets based on certain assumptions such as budgets, internal projections, and other available information as considered necessary. There is no impairment of long-lived assets during the three months ended March 31, 2017 and 2016.

r) Foreign Currency Exchange 

An entity's functional currency is the currency of the primary economic environment in which it operates, normally that is the currency of the environment in which the entity primarily generates and expends cash. Management's judgment is essential to determine the functional currency by assessing various indicators, such as cash flows, sales price and market, expenses, financing and inter-company transactions and arrangements. The functional currency of the parent company is the U.S. Dollar. The reporting currency of the Company is the U.S. Dollar. The Company has oil and gas operations in Alberta, Canada in which the Canadian Dollar (“CAD” or “CS” herein) is the primary economic environment. The reporting currency of these consolidated financial statements is the U.S. Dollar.

For financial reporting purposes, the operational results of the Company's oil and gas operations in Canada are prepared using the CAD, and are translated into the Company's reporting currency, the U.S. Dollar. Revenue and expenses applicable to the oil and gas operations in Alberta, Canada are translated using average rates prevailing during each reporting period. Gains or losses resulting from the settlement of foreign currency transactions are recorded as a separate component of accumulated other comprehensive loss in stockholders' deficit when realized. There have been no settlement transactions that resulted in the recognition of a foreign currency exchange gain or loss during the three months ended March 31, 2017 and 2016.

s) Convertible Notes Payable

The Company accounts for conversion options embedded in convertible notes in accordance with ASC 815. ASC 815 generally requires companies to bifurcate conversion options embedded in convertible notes from their host instruments and to account for them as free standing derivative financial instruments.

The Company has evaluated the terms and conditions of its convertible notes under the guidance of ASC 815. The conversion feature did not meet the definition of “indexed to a company’s own stock” provided for in ASC 815 due to the down round protection feature. Therefore, the conversion feature requires bifurcation and liability classification. Additionally, the default put requires bifurcation because it is indexed to risks that are not associated with credit or interest risk. As a result, the compound embedded derivative comprises of (i) the embedded conversion feature and (i) the default put. Rather than bifurcating and recording the compound embedded derivative as a derivative liability, the Company elected to initially and subsequently measure the convertible note in its entirety at fair value, with changes in fair value recognized in earnings in accordance with ASC 815-15-25-4.

t) Derivative Liability

We review the terms of convertible debt issues to determine whether there are embedded derivative instruments, including embedded conversion options, which are required to be bifurcated and accounted for separately as derivative financial instruments. In circumstances where the host instrument contains more than one embedded derivative instrument, including the conversion option, that is required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument

Bifurcated embedded derivatives are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value reported as non-operating income or expense. When the equity or convertible debt instruments contain embedded derivative instruments that are to be bifurcated and accounted for as liabilities, the total proceeds received are first allocated to the fair value of all the bifurcated derivative instruments. The remaining proceeds, if any, are then allocated to the host instruments themselves, usually resulting in those instruments being recorded at a discount from their face value. The discount from the face value of the convertible debt, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to interest expense.

u) Accounting for Asset Retirement Obligations

Asset retirement obligations (“ARO”) primarily represent the estimated present value of the amount the Company will incur to plug, abandon and remediate its producing properties at the projected end of their productive lives, in accordance with applicable federal, state and local laws. The Company determined its ARO by calculating the present value of estimated cash flows related to the obligation. The retirement obligation is recorded as a liability at its estimated present value as of the obligation’s inception, with an offsetting increase to proved properties.

The following table describes the changes in the Company’s asset retirement obligations for the three months ended March 31, 2017 and the year ended December 31, 2016:

	Three months ended March 31, 2017		Year ended December 31, 2016
Asset retirement obligation – beginning	$	833,017	$	416,246
Oil and gas purchases		-		393,808
Accretion expense		8,837		22,963
Asset retirement obligation - ending	$	841,854	$	833,017

v) Recent Accounting Pronouncements

During the quarter ended March 31, 2017, there were several new accounting pronouncements issued by the Financial Accounting Standards Board. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). This standard provides a single set of guidelines for revenue recognition to be used across all industries and requires additional disclosures. It is effective for annual and interim reporting periods beginning after December 15, 2017. This standard permits early adoption and permits the use of either the retrospective or cumulative effect transition method. We are currently evaluating the potential impact of this standard on our financial position and results of operations, as well as our selected transition method. Based on our preliminary assessment, we believe the new standard will not have a material impact on our financial position and results of operations, as we do not expect to change the manner or timing of recognizing revenue on a majority of our revenue transactions.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This standard requires all leases that have a term of over 12 months to be recognized on the balance sheet with the liability for lease payments and the corresponding right-of-use asset initially measured at the present value of amounts expected to be paid over the term. Recognition of the costs of these leases on the income statement will be dependent upon their classification as either an operating or a financing lease. Costs of an operating lease will continue to be recognized as a single operating expense on a straight-line basis over the lease term. Costs for a financing lease will be disaggregated and recognized as both an operating expense (for the amortization of the right-of-use asset) and interest expense (for interest on the lease liability). This standard will be effective for our interim and annual periods beginning January 1, 2019, and must be applied on a modified retrospective basis to leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. We are currently evaluating the timing of adoption and the potential impact of this standard on our financial position, but we do not expect it to have a material impact on our results of operations.

w) Subsequent events

The Company has evaluated all subsequent events from March 31, 2017, through the date of filing this report, and determined there are no additional items to disclose other than those disclosed in Note 8 below.

XML

Related Party Transactions

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Note 3. Related Party Transactions

During April 2015, the Company made an advance to Tanager Energy Inc., in conjunction with a joint investment in the second oil well of the Joffre Project. As of March 31, 2017, the balance owed by Tanager to the Company is $153,877. The Company has determined to reserve 50% of the balance and has reduced the amount shown as other receivable – related party to $76,939 on the consolidated balance sheet.

During the three months ended March 31, 2017, the Company’s Executive Chairman and Director, Tom Simeo did not accrue payroll and made no advances to the Company. The Company paid a total of $20,000 against prior advances. Any accruals and advances do not bear interest, are unsecured and have no specific terms of repayment. As of March 31, 2017, the net amount due for prior accruals and expenses paid on behalf of the Company is $16,103. The Company has not imputed interest as the amount is deemed immaterial.

During the three months ended March 31, 2017, the Company’s CEO and Director, James Doris incurred expenses on behalf of, and made advances to the Company in the amount of $51,841 in order to provide the Company with funds to carry on its operations, and the Company made repayments of $124,480. These advances do not bear interest, are unsecured and have no specific terms of repayment. As of March 31, 2017, the amount due for advances and expenses paid on behalf of the Company is $298,299. The Company has not imputed interest as the amount is deemed immaterial. Additionally, during the three months ended March 31, 2017, Mr. Doris made several loans to the Company totaling $196,855, all accruing interest at 12%, and payable on demand. As of March 31, 2017, the total amount due to Mr. Doris for advances and expenses paid on behalf of the Company and loans is $1,160,689. Accrued interest of $97,235 is included in accrued expenses and other current liabilities at March 31, 2017.

XML

Oil and Gas Properties

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Note 4. Oil and Gas Properties

The following table summarizes the Company’s oil and gas activities by classification and geographical cost center for the three months ended March 31, 2017:

	December 31, 2016			Additions			Impairments		March 31, 2017
Proved developed producing oil and gas properties
Canada cost center	$	34,733		$	-		$	-	$	34,733
United States cost center		1,787,840			-			-		1,787,840
Accumulated depreciation, depletion and amortization		(57,200	)		(24,108	)		-		(81,308	)
Proved developed producing oil and gas properties, net	$	1,765,373		$	(24,108	)	$	-	$	1,741,265
Undeveloped and non-producing oil and gas properties
Canada cost center	$	371,481		$	-		$	-	$	371,481
United States cost center		917,184			-			-		917,184
Accumulated depreciation, depletion and amortization		(51,176	)		(27,174	)		-		(78,350	)
Undeveloped and non-producing oil and gas properties, net	$	1,237,489		$	(27,174	)	$	-	$	1,210,315
Total Oil and Gas Properties, Net	$	3,002,862		$	(51,282	)	$	-	$	2,951,580

The following table summarizes the Company’s oil and gas activities by classification for the year ended December 31, 2016:

	December 31, 2015			Adjustments			Impairments			December 31, 2016
Proved developed producing oil and gas properties
Canada cost center	$	33,082		$	1,651		$	-		$	34,733
United States cost center		-			2,838,943			(1,051,103	)		1,787,840
Accumulated depreciation, depletion and amortization		(2,093	)		(55,107	)		-			(57,200	)
Proved developed producing oil and gas properties, net	$	30,989		$	2,785,487		$	(1,051,103	)	$	1,765,373
Undeveloped and non-producing oil and gas properties
Canada cost center	$	518,269		$	(1,652	)	$	(145,136	)	$	371,481
United States cost center		-			1,456,414			(539,230	)		917,184
Accumulated depreciation, depletion and amortization		(32,788	)		(43,464	)		25,076			(51,176	)
Undeveloped and non-producing oil and gas properties, net	$	485,481		$	1,411,298		$	(659,290	)	$	1,237,489
Total Oil and Gas Properties, Net	$	516,470		$	2,092,625		$	(1,710,393	)	$	3,002,862

On February 23, 2016, with an effective date of February 1, 2016, the Company closed on the acquisition of working interests in four leases with access to the mineral rights (oil and gas) concerning approximately 281 acres of property in Miami and Franklin Counties in eastern Kansas. This project produces oil from the Cherokee formation at a depth of approximately 600 feet. The purchase includes an undivided interest in all oil and gas wells, equipment, fixtures and other personal property located upon the leased properties and used in connection with oil and gas operations upon the leases attributable to the working interests purchased by the Company.

As consideration for this transaction, the Company paid $1,350,000 plus 4,650,000 shares of common stock valued at $.085 per share, or $395,250.

The Company also purchased a 100% working interest (Net Revenue Interest of 83%) in certain Non-Producing Leases as follows: (i) three leases with access to the mineral rights (oil and gas) concerning approximately 270 acres of property in Miami and Franklin Counties in eastern Kansas; and (ii) 31 leases with access to the mineral rights (oil and gas) concerning approximately 5,500 acres of property in Cass and Bates Counties in Missouri. The purchase includes an undivided interest in all oil and gas wells, equipment, fixtures and other personal property located upon the leased properties and used in connection with oil and gas operations upon the leases attributable to the working interests purchased by Viking. As consideration for this transaction, Viking agreed to issue the vendors 5,000,000 shares of common stock valued at $.085 per share or $425,000.

To facilitate these acquisitions, the Company borrowed $1,625,000 from private lenders pursuant to a 15% Senior Secured Convertible Promissory Note (the "Note"), arranged through a licensed broker/dealer, with the primary terms of the loan being as follows: (i) Term – 6 months; (ii) Rate – 15% per annum; (iii) Security – 1^st ranking charge against company assets pursuant to a Security and Pledge Agreement (the "Security Agreement"); (iv) Conversion – the lenders have a right to convert all or part of the note into common stock of Viking at a price of $0.15 per share, subject to certain ownership restrictions; and (v) Warrants – the lenders were given an option to purchase, within the next 5 years, 4,062,500 shares of common stock of Viking at an exercise price of $0.20 per share pursuant to a Common Stock Purchase Warrant. Viking's CEO and director, James Doris, also personally guaranteed repayment of the loan and granted the lenders a security interest in his assets.

On October 4, 2016, the Company, through Mid-Con Petroleum, LLC, completed an acquisition whereby the Company (i) increased its working interest in three existing oil and gas leases in Miami and Franklin Counties in Eastern Kansas, and (ii) acquired a working interest in four new oil and gas leases in the same region, comprising approximately 660 acres of property.

As consideration for this transaction, the Company paid $920,857 plus 5,212,021 shares of common stock valued at $625,442.

XML

Capital Stock and Additional Paid-in Capital

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Note 5. Capital Stock and Additional Paid-in Capital

(a) Preferred Stock 

The Company is authorized to issue 5,000,000 shares of Preferred Stock, par value $0.001 per share (the “Preferred Stock”), of which 50,000 have been designated as Series C Preferred Stock (the “Series C Preferred Stock”).

Each share of Series C Preferred Stock entitles the holder to two thousand (2,000) votes on all matters submitted to a vote of the stockholders of the Company. In the event the Company shall at any time on or after the date that Preferred Stock has been issued declare or pay any dividend on common stock payable in shares of common stock, or effect a subdivision or combination or consolidation of the outstanding shares of common stock (by reclassification or otherwise than by payment of a dividend in shares of common stock) into a greater or lesser number of shares of common stock, then in each such case the number of votes per share to which holders of shares of Series C Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction of the numerator of which is the number of shares of common stock outstanding immediately after such event and the denominator of which is the number of shares of common stock that were outstanding immediately prior to such event.

Each share of Series C Preferred Stock shall be convertible, at the option of the holder, at any time after the date of issuance into one share of fully paid and non-assessable common stock.

(b) Common Stock 

The Company is authorized to issue 100,000,000 shares of common stock, par value $0.001 per share.

On January 12, 2016, the Company issued 300,926 common shares for convertible debt in the amount of $10,111.

On March 16, 2016, the Company issued 1,000,000 common shares for services, valued at $102,500.

On February 1, 2016, the Company authorized the issuance of 9,650,000 common shares as part of the consideration for the acquisition of the Oil and Gas properties made at that time.

On March 21, 2016, the Company executed a one year advisory services agreement requiring the issuance of 1,000,000 common shares for the contract. The shares are to be issued as 375,002 upon execution of the contract, with 56,818 shares being issued at the beginning of each month for the remaining eleven months.

As of April 29, 2016, the Company, pursuant to a securities purchase agreement, sold 1,250,000 shares of its common stock at $0.15 per share.

On August 18, 2016, the Company authorized the issuance of 156,250 common shares pursuant to an extension agreement on certain convertible notes that had become due.

On September 28, 2016, the Company issued 2,400,000 common shares, at the current market value of $288,000 as part of the consideration for the acquisition of the Oil and Gas Properties acquired on October 4, 2016.

During September 2016, the Company negotiated the payment of certain convertible notes, and committed to the issuance of 375,000 common shares at the current market value of $52,500 as additional interest.

As of September 30, 2016, the Company, pursuant to a securities purchase agreement, sold $1,337,500 shares of its common stock at $0.15 per share.

On October 4, 2016, the Company authorized the issuance of 2,752,021 common shares as part of the consideration for the acquisition of the Oil and Gas properties made at that time.

On October 4, 2016, the Company issued 60,000 common shares as part of the consideration for the acquisition of the Oil and Gas properties made at that time.

On October 21, 2016, the Company issued 1,400,000 common shares valued at $252,000 pursuant to an extension agreement on certain convertible notes that had become due.

On October 21, 2016, the Company sold 187,500 common shares, pursuant to a securities purchase agreement, at $0.15 per share.

During November 2016, the Company authorized the issuance of 508,335 common shares as additional discount on debt previously issued, and an amendment extending the due date of the debt.

On December 30, 2016, the Company sold 66,667 common shares pursuant to a securities purchase agreement, at $0.15 per share.

As of December 31, 2016, the Company, pursuant to a securities purchase agreement, sold $1,337,500 shares of its common stock at $0.15 per share.

As of December 31, 2016, the Company authorized the issuance of 315,000 common shares for services.

During January 2017, the Company issued 62,500 common shares for services.

On January 9, 2017, the Company issued 3,000,000 common shares upon the execution of a six-month services contract.

On January 25, 2017, the Company sold 333,333 common shares, pursuant to a securities purchase agreement, at $0.15 per share.

On February 16, 2017, the Company sold 666,666 common shares pursuant to a securities purchase agreement at $0.15 per share.

On March 23, 2017, the Company sold 2,059,443 common shares pursuant to a securities purchase agreement at $0.15 per share.

XML

Long Term Debt

3 Months Ended

Mar. 31, 2017

Long Term Debt

Note 6. Long Term Debt

Long term debt consisted of the following at March 31, 2017 and December 31, 2016:

	March 31, 2017			December 31, 2016
On February 19, 2016, the Company issued a total of $1,625,000 15% convertible notes with a term expiring August 18, 2016 (the “Maturity Date”). The principal amounts of each note and interest is payable on the maturity date. Placement fees of $145,000 were subtracted from proceeds. The notes are convertible into common stock at any time, at the holder’s option, the conversion price shall be the lowest of (i) $0.15, (ii) 58% of the price of the Company’s securities that are sold in any offering of the Company’s securities in excess of $100,000, of (iii) the conversion price of any Equity converted on or prior to the Conversion Date.		-			125,000
On April 29, 2016, the Company issued a total of $375,000 of 10% Secured Subordinated promissory notes with a term expiring January 12, 2017 (the “Maturity Date”), and an original issue discount of fifty percent (50%). Interest is payable on the outstanding principal of these notes at 10% per annum on the Maturity Date. The balance shown is net of unamortized discount of $8,824 at December 31, 2016.		-			366,176
On July 27, 2016, the Company issued a promissory note in the amount of $20,000, bearing interest at 12%, with an initial maturity date of August 27, 2016, and a provision for an extension of six additional terms of 30 days.					20,000
As of December 31, 2016, the Company issued a total of $630,000 of 10% Secured promissory notes with a term expiring April 3, 2017 (the “Maturity Date”), and an original issue discount of thirty-seven and one half percent (37.5%). The discount was modified to fifty percent (50%) retroactively with an extension of the maturity to June 2017. During the quarter ended March 31, 2017, the Company issued an additional $917,833 of 10% Secured promissory notes with terms expiring in June, August and September of 2017, and an original issue discount of fifty percent (50%). Interest is payable on the outstanding principal of these notes at 10% per annum on the various maturity dates. The balance shown is net of unamortized discount of $501,061 and $208,064 at March 31, 2017 and December 31, 2016 respectively..		1,046,772			421,936
On October 4, 2016, the Company issued a non-interest bearing note, payable on demand in the amount of $203,000.		203,000			203,000
On October 4, 2016, the Company closed on a revolver loan with Crossfirst Bank in the amount of $1,800,000, payable at $15,000 per month, interest at 10%, with all unpaid principal and accrued interest payable on September 30, 2018. The balance shown is net of unamortized discount of $20,758 and $24,167 at March 31, 2017 and December 31, 2016 respectively.		1,704,243			1,745,833
		2,954,015			2,881,945
Less current portion		(1,416,136	)		(1,302,476	)
	$	1,537,879		$	1,579,469

XML

Commitments and contingencies

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Note 7. Commitments and contingencies

From time to time the Company may be a party to litigation matters involving claims against the Company. Management believes that there are no current matters that would have a material effect on the Company’s consolidated financial position or results of operations.

XML

Subsequent Events

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Note 8. Subsequent Events

On April 18, 2017, the Company entered into a one-year consulting agreement for services, which requires the issuance of 250,000 common shares per quarter for the term of the contract. None of these shares have been issued as of the date of filing this report.

On May 4, 2017, the Company established an Advisory Board to assist Viking with identifying and evaluating acquisition and development opportunities, and authorized the issuance of 1,000,000 common shares. None of these shares have been issued as of the date of this report.

On May 4, 2017, the Company authorized the issuance of 421,667 common shares for services. None of these shares have been issued as of the date of this report.

XML

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2017

Summary Of Significant Accounting Policies Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto contained in Viking’s latest Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments (unless otherwise indicated), necessary for a fair presentation of the financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

Basis of Consolidation

The financial statements presented herein reflect the consolidated financial results of the Company and its wholly owned subsidiaries, Viking Oil & Gas (Canada) ULC, a Canadian corporation formed on March 8, 2016, to provide a base of operations for properties in Canada, and Mid-Con Petroleum, LLC, formed on August 30, 2016, to provide a base of operations for properties in the Central United States. All significant intercompany transactions and balances have been eliminated upon consolidation.

Use of Estimates in the Preparation of Financial Statements

The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts and timing of revenues and expenses, the reported amounts and classification of assets and liabilities, and disclosure of contingent assets and liabilities. The Company's actual results could vary materially from management's estimates and assumptions. Significant areas requiring the use of management estimates relate to the determination of expected tax rates for future income tax recoveries, stock-based compensation, embedded derivative liabilities, asset retirement obligations and impairment of long-lived assets.

The estimates of proved, probable and possible oil and gas reserves are used as significant inputs in determining the depletion of oil and gas properties and the impairment of proved and unproved oil and gas properties. There are numerous uncertainties inherent in the estimation of quantities of proved, probable and possible reserves and in the projection of future rates of production and the timing of development expenditures. Similarly, evaluations for impairment of proved and unproved oil and gas properties are subject to numerous uncertainties including, among others, estimates of future recoverable reserves and commodity price outlooks.

Actual results could differ from the estimates and assumptions utilized.

Financial Instruments

ASC Topic 820-10, “Fair Value Measurement” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 820-10, defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for other receivable – related party, accrued expenses and other current liabilities, accounts payable, derivative liabilities, amount due to directors, and convertible notes each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

· Level 1: inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

·  Level 2: inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

· Level 3: inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Assets and liabilities measured at fair value as of March 31, 2017 are classified below based on the three fair value hierarchy described above:

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Gains (Losses)
Financial Assets
Long term investment	$	-	$	-	$	-	$	1,446
Commodity Derivative		-		5,843		-		66,904
	$	-	$	5,843	$	-	$	68,350
Financial liabilities
Derivative liabilities	$	-	$	-	$	771,493	$	269,109
	$	-	$	-	$	771,493	$	269,109

Assets and liabilities measured at fair value as of December 31, 2016 are classified below based on the three fair value hierarchy described above:

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Gains (Losses)
Financial Assets
Long term investment	$	106,930	$	-	$	-	$	156,978
	$	106,930	$	-	$	-	$	156,978
Financial liabilities
Derivative liabilities	$	-	$	-	$	1,075,833	$	265,448
Commodity Derivative		-		61,061		-		(61,061	)
	$	-	$	61,061	$	1,075,833	$	204,387

The Company’s long term investment consisted of 1,437,500 common shares of Tanager Energy Inc., as of December 31, 2016, which is traded on the TSX Venture Exchange (Toronto Stock Exchange). During the three months ended March 31, 2017, the Company sold these shares. The change in the fair value of this investment that has been recognized as an unrealized gain in other comprehensive income on the statement of operations and comprehensive loss was $1,446 for the three months ended March 31, 2017, and $(7,265) for the three months ended March 31, 2016.

The Company had commodity financial derivatives in place at March 31, 2017. The Company does not designate its commodities derivative instruments as hedges and therefore does not apply hedge accounting. Changes in fair value of derivative instruments subsequent to the initial measurement are recorded as change in fair value on derivative liability, in other income (expense). The estimated fair value amounts of the Company’s commodity derivative instruments have been determined at discrete points in time based on relevant market information which resulted in the Company classifying such derivatives as Level 2. Although the Company’s commodity derivative instruments are valued using public indices, the instruments themselves are traded with unrelated counterparties and are not openly traded on an exchange.

The Company uses the Black-Scholes model to value its derivative liabilities. This model takes into account inputs such as contract terms, including maturity and market parameters, including assumptions associated with interest rates, volatility and credit worthiness. The embedded derivative assets and liabilities of the Company were $5,843 and $771,493 as of March 31, 2017, and $0 and $1,075,833 as of December 31, 2016, respectively. The change in the fair value of the derivative assets and liabilities for the three months ended March 31, 2017 consisted of an increase of $66,904 associated with commodity derivatives, a decrease in derivative liabilities of $304,341 associated with warrants and the conversion features of convertible debt, and a reduction of $35,232 associated with the satisfaction of certain convertible debt and a gain recognized in the statement of operations and comprehensive loss in the amount of $336,013.

Cash and Cash Equivalents

Cash and cash equivalents include cash in banks and highly liquid investment securities that have original maturities of three months or less. At March 31, 2017 and December 31, 2016, the Company does not have any cash deposits in excess of FDIC insured limits.

Accounts receivable

Accounts receivable consist of oil and gas receivables. The Company has classified these as short-term assets in the balance sheet because the Company expects repayment or recovery within the next 12 months. The Company evaluates these accounts receivable for collectability and, when necessary, records allowances for expected unrecoverable amounts. The Company deems all accounts receivable to be collectable, and has not recorded any allowance for doubtful accounts.

Prepaid equity based compensation

Prepaid equity-based expenses represent amounts paid in advance through the issuance of restricted shares of stock, for future contractual benefits to be received. These expenses paid in advance are recorded as prepaid equity-based compensation as a component of “Stockholders’ Deficit”and then amortized to the statements of operations and comprehensive loss over the life of the contract using the straight-line method. At March 31, 2017 and December 31, 2016, the balances of the prepaid equity-based compensation were comprised of the following:

	March 31, 2017		December 31, 2016
In March 2016, three one-year consulting agreements with three unrelated parties for services related to the petroleum industry for a combined total amount of $800,000.		-		35,068
In January 2017, a six-month consulting agreement for services related to marketing and promotion of the Company on various platforms associated with the petroleum industry and the financial markets for a total amount of $660,000.		364,641		-
In February 2017, a one-year consulting agreement for services related to investor relations, market exposure and content development for a total amount of $44,160.		39,683
	$	404,324	$	35,068

Oil and Gas Properties

The Company uses the full cost method of accounting for its investment in oil and natural gas properties. Under this method of accounting, all costs associated with acquisition, exploration and development of oil and gas reserves, including directly related overhead costs, are capitalized. General and administrative costs related to production and general overhead are expensed as incurred.

All capitalized costs of oil and gas properties, including the estimated future costs to develop proved reserves, are amortized on the unit of production method using estimates of proved reserves. Disposition of oil and gas properties are accounted for as a reduction of capitalized costs, with no gain or loss recognized unless such adjustment would significantly alter the relationship between capitalized costs and proved reserves of oil and gas, in which case the gain or loss is recognized in operations. Unproved properties and major development projects are not amortized until proved reserves associated with the projects can be determined or until impairment occurs. If the results of an assessment indicate that the properties are impaired, the amount of the impairment is included in loss from continuing operations before income taxes and the adjusted carrying amount of the unproved properties is amortized on the unit-of-production method.

Depreciation, depletion and amortization expense utilizing the unit-of-production method for the Company’s oil and gas properties for the three months ended March 31, 2017 and 2016 were as follows:

Oil and Gas Properties by Geographical Cost Center
	Three months ended,
	March 31,
Cost Center	2017		2016
Canada	$	17,007	$	2,064
United States		34,275		18,302
	$	51,282	$	20,366

Limitation on Capitalized Costs

Under the full-cost method of accounting, we are required, at the end of each reporting date, to perform a test to determine the limit on the book value of our oil and natural gas properties (the “Ceiling” test). If the capitalized costs of our oil and natural gas properties, net of accumulated amortization and related deferred income taxes, exceed the Ceiling, this excess or impairment is charged to expense. The expense may not be reversed in future periods, even though higher oil and natural gas prices may subsequently increase the Ceiling. The Ceiling is defined as the sum of:

(a) the present value, discounted at 10 percent, and assuming continuation of existing economic conditions, of 1) estimated future gross revenues from proved reserves, which is computed using oil and natural gas prices determined as the unweighted arithmetic average of the first-day-of-the-month price for each month within the 12-month hedging arrangements pursuant to SAB 103, less 2) estimated future expenditures (based on current costs) to be incurred in developing and producing the proved reserves, plus

(b) the cost of properties not being amortized; plus

(c) the lower of cost or estimated fair value of unproven properties included in the costs being amortized, net of

(d) the related tax effects related to the difference between the book and tax basis of our oil and natural gas properties.

Oil and Gas Reserves

Reserve engineering is a subjective process that is dependent upon the quality of available data and the interpretation thereof, including evaluations and extrapolations of well flow rates and reservoir pressure. Estimates by different engineers often vary sometimes significantly. In addition, physical factors such as the results of drilling, testing and production subsequent to the date of an estimate, as well as economic factors such as changes in product prices, may justify revision of such estimates. Because proved reserves are required to be estimated using recent prices of the evaluation, estimated reserve quantities can be significantly impacted by changes in product prices.

Loss per Share

Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and, adjusted by any effects of warrants and options outstanding, if dilutive, that may add to the number of common shares during the period. At March 31, 2017 and 2016, there were 6,582,259 and 6,059,537 common stock equivalents respectively, that were anti-dilutive and were not included in the calculation.

Revenue Recognition

All revenue is recognized when persuasive evidence of an arrangement exists, the service or sale is complete, the price is fixed or determinable and collectability is reasonably assured. Revenue is derived from the sale of crude oil and natural gas. Revenue from crude oil and natural gas sales is recognized when the product is delivered to the purchaser and collectability is reasonably assured. The Company follows the “sales method” of accounting for oil and natural gas revenue, so it recognizes revenue on all natural gas or crude oil sold to purchasers.

Comprehensive Loss

FASB ASC 220 “Comprehensive Income,” establishes standards for the reporting and presentation of comprehensive income and its components in the consolidated financial statements. For the three months ended March 31, 2017 and 2016, comprehensive income (loss) was $1,446 and $(7,265) respectively, and consisted primarily of unrealized gains and (losses) on available for sale securities.

Income Taxes

The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets likely. The Company did not incur any material impact to its financial condition or results of operations due to the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company is subject to U.S federal jurisdiction income tax examinations for the tax years 2007 through 2016. In addition, the Company is subject to state and local income tax examinations for the tax years 2007 through 2016. 

Stock-Based Compensation

The Company may issue stock options to employees and stock options or warrants to non-employees in non-capital raising transactions for services and for financing costs. In accordance with guidance in ASC Topic 718, the cost of stock options and warrants issued to employees and non-employees is measured on the grant date based on the fair value. The fair value is determined using the Black-Scholes option pricing model. The resulting amount is charged to expense on the straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period.

The fair value of stock warrants was determined at the date of grant using the Black-Scholes option pricing model. The Black-Scholes option model requires management to make various estimates and assumptions, including expected term, expected volatility, risk-free rate, and dividend yield. The expected term represents the period of time that stock-based compensation awards granted are expected to be outstanding and is estimated based on considerations including the vesting period, contractual term and anticipated employee exercise patterns. Expected volatility is based on the historical volatility of the Company’s stock. The risk-free rate is based on the U.S. Treasury yield curve in relation to the contractual life of stock-based compensation instrument. The dividend yield assumption is based on historical patterns and future expectations for the Company dividends.

The following table represents stock warrant activity as of and for the three months ended March 31, 2017:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
Warrants Outstanding – December 31, 2016		5,720,834		0.19		-		-
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited/expired/cancelled		-				-		-
Warrants Outstanding – March 31, 2017		5,720,834	$	0.19	5.0 years		$	-
Outstanding Exercisable – December 31, 2016		5,720,834	$	0.19	5.0 years		$	-
Outstanding Exercisable – March 31, 2017		5,720,834	$	0.19	5.0 years		$	-

Long-term Investment

Management determines the appropriate classification of investment securities at the time of purchase. Securities are classified held-to-maturity when the Company has both the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are stated at amortized cost. Securities that are bought and held principally for the purpose of selling in the near term are classified as trading securities and reported at fair value, with unrealized gains and losses included in earnings. Securities not classified as held-to-maturity or trading are classified as available-for-sale. Available-for-sale securities are stated at fair value, the changes in the market value of available-for-sale securities, excluding other-than-temporary impairments, are reflected in Other Comprehensive Income, with the impairment losses, net of income taxes, charged to net income in the period in which it occurs.

The fair value of securities is based on quoted market prices. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities. A decline in the market value of any available-for-sale or held-for-maturity security below cost that is deemed to be other-then-temporary results in a reduction in carrying amount to fair value.

Impairments that are considered other-than-temporary are recognized as a loss in the consolidated statements of operations and comprehensive loss. The Company considers various factors in reviewing impairments, including the length of time and extent to which fair value has been less than the Company’s cost basis, the financial condition and near-term prospects of the issuer, and the Company’s intent and ability to hold the investments for a period of time sufficient to allow for any anticipated recovery in market value.

As of March 31, 2017, and December 31, 2016, the Company had no trading and held-to-maturity securities.

The Company’s long term investment consisted of 1,437,500 common shares of Tanager Energy Inc., as of December 31, 2016, which is traded on the TSX Venture Exchange (Toronto Stock Exchange). During the three months ended March 31, 2017, the Company sold these shares. The change in the fair value of this investment, recognized as an unrealized gain in other comprehensive income on the statement of operations and comprehensive loss was $1,446 and ($7,265) for the three months ended March 31, 2017 and 2016, respectively.

Impairment of long-lived assets

In accordance with ASC 360, "Accounting for the Impairment or Disposal of Long-Lived Assets", the Company is required to review its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value.

Assets are grouped and evaluated at the lowest level for their identifiable cash flows that are largely independent of the cash flows of other groups of assets. The Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount of the asset to the future estimated cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds estimated expected undiscounted future cash flows, the Company measures the amount of impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is generally determined by using the asset's expected future discounted cash flows or market value. The Company estimates fair value of the assets based on certain assumptions such as budgets, internal projections, and other available information as considered necessary. There is no impairment of long-lived assets during the three months ended March 31, 2017 and 2016.

Foreign Currency Exchange

An entity's functional currency is the currency of the primary economic environment in which it operates, normally that is the currency of the environment in which the entity primarily generates and expends cash. Management's judgment is essential to determine the functional currency by assessing various indicators, such as cash flows, sales price and market, expenses, financing and inter-company transactions and arrangements. The functional currency of the parent company is the U.S. Dollar. The reporting currency of the Company is the U.S. Dollar. The Company has oil and gas operations in Alberta, Canada in which the Canadian Dollar (“CAD” or “CS” herein) is the primary economic environment. The reporting currency of these consolidated financial statements is the U.S. Dollar.

For financial reporting purposes, the operational results of the Company's oil and gas operations in Canada are prepared using the CAD, and are translated into the Company's reporting currency, the U.S. Dollar. Revenue and expenses applicable to the oil and gas operations in Alberta, Canada are translated using average rates prevailing during each reporting period. Gains or losses resulting from the settlement of foreign currency transactions are recorded as a separate component of accumulated other comprehensive loss in stockholders' deficit when realized. There have been no settlement transactions that resulted in the recognition of a foreign currency exchange gain or loss during the three months ended March 31, 2017 and 2016.

Convertible Notes Payable

The Company accounts for conversion options embedded in convertible notes in accordance with ASC 815. ASC 815 generally requires companies to bifurcate conversion options embedded in convertible notes from their host instruments and to account for them as free standing derivative financial instruments.

The Company has evaluated the terms and conditions of its convertible notes under the guidance of ASC 815. The conversion feature did not meet the definition of “indexed to a company’s own stock” provided for in ASC 815 due to the down round protection feature. Therefore, the conversion feature requires bifurcation and liability classification. Additionally, the default put requires bifurcation because it is indexed to risks that are not associated with credit or interest risk. As a result, the compound embedded derivative comprises of (i) the embedded conversion feature and (i) the default put. Rather than bifurcating and recording the compound embedded derivative as a derivative liability, the Company elected to initially and subsequently measure the convertible note in its entirety at fair value, with changes in fair value recognized in earnings in accordance with ASC 815-15-25-4. 

Derivative Liability

We review the terms of convertible debt issues to determine whether there are embedded derivative instruments, including embedded conversion options, which are required to be bifurcated and accounted for separately as derivative financial instruments. In circumstances where the host instrument contains more than one embedded derivative instrument, including the conversion option, that is required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument

Bifurcated embedded derivatives are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value reported as non-operating income or expense. When the equity or convertible debt instruments contain embedded derivative instruments that are to be bifurcated and accounted for as liabilities, the total proceeds received are first allocated to the fair value of all the bifurcated derivative instruments. The remaining proceeds, if any, are then allocated to the host instruments themselves, usually resulting in those instruments being recorded at a discount from their face value. The discount from the face value of the convertible debt, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to interest expense.

Accounting for Asset Retirement Obligations

Asset retirement obligations (“ARO”) primarily represent the estimated present value of the amount the Company will incur to plug, abandon and remediate its producing properties at the projected end of their productive lives, in accordance with applicable federal, state and local laws. The Company determined its ARO by calculating the present value of estimated cash flows related to the obligation. The retirement obligation is recorded as a liability at its estimated present value as of the obligation’s inception, with an offsetting increase to proved properties.

The following table describes the changes in the Company’s asset retirement obligations for the three months ended March 31, 2017 and the year ended December 31, 2016:

	Three months ended March 31, 2017		Year ended December 31, 2016
Asset retirement obligation – beginning	$	833,017	$	416,246
Oil and gas purchases		-		393,808
Accretion expense		8,837		22,963
Asset retirement obligation - ending	$	841,854	$	833,017

Recently Accounting Pronouncements

During the quarter ended March 31, 2017, there were several new accounting pronouncements issued by the Financial Accounting Standards Board. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). This standard provides a single set of guidelines for revenue recognition to be used across all industries and requires additional disclosures. It is effective for annual and interim reporting periods beginning after December 15, 2017. This standard permits early adoption and permits the use of either the retrospective or cumulative effect transition method. We are currently evaluating the potential impact of this standard on our financial position and results of operations, as well as our selected transition method. Based on our preliminary assessment, we believe the new standard will not have a material impact on our financial position and results of operations, as we do not expect to change the manner or timing of recognizing revenue on a majority of our revenue transactions.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This standard requires all leases that have a term of over 12 months to be recognized on the balance sheet with the liability for lease payments and the corresponding right-of-use asset initially measured at the present value of amounts expected to be paid over the term. Recognition of the costs of these leases on the income statement will be dependent upon their classification as either an operating or a financing lease. Costs of an operating lease will continue to be recognized as a single operating expense on a straight-line basis over the lease term. Costs for a financing lease will be disaggregated and recognized as both an operating expense (for the amortization of the right-of-use asset) and interest expense (for interest on the lease liability). This standard will be effective for our interim and annual periods beginning January 1, 2019, and must be applied on a modified retrospective basis to leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. We are currently evaluating the timing of adoption and the potential impact of this standard on our financial position, but we do not expect it to have a material impact on our results of operations.

Subsequent events

The Company has evaluated all subsequent events from March 31, 2017, through the date of filing this report, and determined there are no additional items to disclose other than those disclosed in Note 8 below.

XML

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2017

Summary Of Significant Accounting Policies Tables

Financial Assets and liabilities measured at fair value

Assets and liabilities measured at fair value as of March 31, 2017 are classified below based on the three fair value hierarchy described above:

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Gains (Losses)
Financial Assets
Long term investment	$	-	$	-	$	-	$	1,446
Commodity Derivative		-		5,843		-		66,904
	$	-	$	5,843	$	-	$	68,350
Financial liabilities
Derivative liabilities	$	-	$	-	$	771,493	$	269,109
	$	-	$	-	$	771,493	$	269,109

Assets and liabilities measured at fair value as of December 31, 2016 are classified below based on the three fair value hierarchy described above:

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Gains (Losses)
Financial Assets
Long term investment	$	106,930	$	-	$	-	$	156,978
	$	106,930	$	-	$	-	$	156,978
Financial liabilities
Derivative liabilities	$	-	$	-	$	1,075,833	$	265,448
Commodity Derivative		-		61,061		-		(61,061	)
	$	-	$	61,061	$	1,075,833	$	204,387

Schedule of Prepaid equity based compensation expenses

	March 31, 2017		December 31, 2016
In March 2016, three one-year consulting agreements with three unrelated parties for services related to the petroleum industry for a combined total amount of $800,000.		-		35,068
In January 2017, a six-month consulting agreement for services related to marketing and promotion of the Company on various platforms associated with the petroleum industry and the financial markets for a total amount of $660,000.		364,641		-
In February 2017, a one-year consulting agreement for services related to investor relations, market exposure and content development for a total amount of $44,160.		39,683
	$	404,324	$	35,068

Depreciation, depletion and amortization expense

Oil and Gas Properties by Geographical Cost Center
	Three months ended,
	March 31,
Cost Center	2017		2016
Canada	$	17,007	$	2,064
United States		34,275		18,302
	$	51,282	$	20,366

Stock-Based Compensation

The following table represents stock warrant activity as of and for the three months ended March 31, 2017:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
Warrants Outstanding – December 31, 2016		5,720,834		0.19		-		-
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited/expired/cancelled		-				-		-
Warrants Outstanding – March 31, 2017		5,720,834	$	0.19	5.0 years		$	-
Outstanding Exercisable – December 31, 2016		5,720,834	$	0.19	5.0 years		$	-
Outstanding Exercisable – March 31, 2017		5,720,834	$	0.19	5.0 years		$	-

Summury of changes in the Company's asset retirement obligations

	Three months ended March 31, 2017		Year ended December 31, 2016
Asset retirement obligation – beginning	$	833,017	$	416,246
Oil and gas purchases		-		393,808
Accretion expense		8,837		22,963
Asset retirement obligation - ending	$	841,854	$	833,017

XML

Oil and Gas Properties (Tables)

3 Months Ended

Mar. 31, 2017

Oil And Gas Properties Tables

Schedule of oil and gas activities

The following table summarizes the Company’s oil and gas activities by classification and geographical cost center for the three months ended March 31, 2017:

	December 31, 2016			Additions			Impairments		March 31, 2017
Proved developed producing oil and gas properties
Canada cost center	$	34,733		$	-		$	-	$	34,733
United States cost center		1,787,840			-			-		1,787,840
Accumulated depreciation, depletion and amortization		(57,200	)		(24,108	)		-		(81,308	)
Proved developed producing oil and gas properties, net	$	1,765,373		$	(24,108	)	$	-	$	1,741,265
Undeveloped and non-producing oil and gas properties
Canada cost center	$	371,481		$	-		$	-	$	371,481
United States cost center		917,184			-			-		917,184
Accumulated depreciation, depletion and amortization		(51,176	)		(27,174	)		-		(78,350	)
Undeveloped and non-producing oil and gas properties, net	$	1,237,489		$	(27,174	)	$	-	$	1,210,315
Total Oil and Gas Properties, Net	$	3,002,862		$	(51,282	)	$	-	$	2,951,580

The following table summarizes the Company’s oil and gas activities by classification for the year ended December 31, 2016:

	December 31, 2015			Adjustments			Impairments			December 31, 2016
Proved developed producing oil and gas properties
Canada cost center	$	33,082		$	1,651		$	-		$	34,733
United States cost center		-			2,838,943			(1,051,103	)		1,787,840
Accumulated depreciation, depletion and amortization		(2,093	)		(55,107	)		-			(57,200	)
Proved developed producing oil and gas properties, net	$	30,989		$	2,785,487		$	(1,051,103	)	$	1,765,373
Undeveloped and non-producing oil and gas properties
Canada cost center	$	518,269		$	(1,652	)	$	(145,136	)	$	371,481
United States cost center		-			1,456,414			(539,230	)		917,184
Accumulated depreciation, depletion and amortization		(32,788	)		(43,464	)		25,076			(51,176	)
Undeveloped and non-producing oil and gas properties, net	$	485,481		$	1,411,298		$	(659,290	)	$	1,237,489
Total Oil and Gas Properties, Net	$	516,470		$	2,092,625		$	(1,710,393	)	$	3,002,862

XML

Long Term Debt (Tables)

3 Months Ended

Mar. 31, 2017

Long Term Debt

Schedule of Long-term Debt

Long term debt consisted of the following at March 31, 2017 and December 31, 2016:

	March 31, 2017			December 31, 2016
On February 19, 2016, the Company issued a total of $1,625,000 15% convertible notes with a term expiring August 18, 2016 (the “Maturity Date”). The principal amounts of each note and interest is payable on the maturity date. Placement fees of $145,000 were subtracted from proceeds. The notes are convertible into common stock at any time, at the holder’s option, the conversion price shall be the lowest of (i) $0.15, (ii) 58% of the price of the Company’s securities that are sold in any offering of the Company’s securities in excess of $100,000, of (iii) the conversion price of any Equity converted on or prior to the Conversion Date.		-			125,000
On April 29, 2016, the Company issued a total of $375,000 of 10% Secured Subordinated promissory notes with a term expiring January 12, 2017 (the “Maturity Date”), and an original issue discount of fifty percent (50%). Interest is payable on the outstanding principal of these notes at 10% per annum on the Maturity Date. The balance shown is net of unamortized discount of $8,824 at December 31, 2016.		-			366,176
On July 27, 2016, the Company issued a promissory note in the amount of $20,000, bearing interest at 12%, with an initial maturity date of August 27, 2016, and a provision for an extension of six additional terms of 30 days.					20,000
As of December 31, 2016, the Company issued a total of $630,000 of 10% Secured promissory notes with a term expiring April 3, 2017 (the “Maturity Date”), and an original issue discount of thirty-seven and one half percent (37.5%). The discount was modified to fifty percent (50%) retroactively with an extension of the maturity to June 2017. During the quarter ended March 31, 2017, the Company issued an additional $917,833 of 10% Secured promissory notes with terms expiring in June, August and September of 2017, and an original issue discount of fifty percent (50%). Interest is payable on the outstanding principal of these notes at 10% per annum on the various maturity dates. The balance shown is net of unamortized discount of $501,061 and $208,064 at March 31, 2017 and December 31, 2016 respectively..		1,046,772			421,936
On October 4, 2016, the Company issued a non-interest bearing note, payable on demand in the amount of $203,000.		203,000			203,000
On October 4, 2016, the Company closed on a revolver loan with Crossfirst Bank in the amount of $1,800,000, payable at $15,000 per month, interest at 10%, with all unpaid principal and accrued interest payable on September 30, 2018. The balance shown is net of unamortized discount of $20,758 and $24,167 at March 31, 2017 and December 31, 2016 respectively.		1,704,243			1,745,833
		2,954,015			2,881,945
Less current portion		(1,416,136	)		(1,302,476	)
	$	1,537,879		$	1,579,469

XML

Nature of Business and Going Concern (Details Narrative)	1 Months Ended	3 Months Ended
	Nov. 30, 2014	Mar. 31, 2017 USD ($)	Mar. 31, 2016 USD ($)	Oct. 04, 2016 a	Feb. 23, 2016 a
Controlling purchasing percentage of ownerships	50.00%
Net Loss | $		$ (557,955)	$ (2,405,994)
Area of oil and gas acquisition | a				660	281
Sparta Ventures Corp. [Member]
State of incorporation		Florida
Date of Incorporation		May 03, 1989
SinoCubate, Inc. [Member]
State of incorporation		Nevada
Date of Incorporation		Sep. 11, 2008

XML

Summary of Significant Accounting Policies (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Financial Assets
Long term investment		$ 106,930
Financial Liabilities
Derivative Liabilities	771,493	1,136,894
Quoted Prices in Active Markets for Identical Assets/Level 1 [Member]
Financial Assets
Long term investment		106,930
Commodity Derivative
Financial Asset		106,930
Financial Liabilities
Derivative Liabilities
Financial Liabilities
Significant Other Observable Inputs/Level 2 [Member]
Financial Assets
Long term investment
Commodity Derivative	5,843
Financial Asset	5,843
Financial Liabilities
Derivative Liabilities
Commodity Derivative	5,843	61,061
Financial Liabilities		61,061
Significant Unobservable Inputs/Level 3 [Member]
Financial Assets
Long term investment
Commodity Derivative
Financial Asset
Financial Liabilities
Derivative Liabilities	771,493	1,075,833
Commodity Derivative	5,843
Financial Liabilities	771,493	1,075,833
Total Gain Loss [Member]
Financial Assets
Long term investment	1,446	156,978
Commodity Derivative	66,904
Financial Asset	68,350	156,978
Financial Liabilities
Derivative Liabilities	269,109	265,448
Commodity Derivative		(61,061)
Financial Liabilities	$ 269,109	$ 204,387

XML

Summary of Significant Accounting Policies (Details 1) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Prepaid equity-based compensation	$ 404,324	$ 35,068
consulting agreements with 3 unrelated parties [Member] | In March, 2016 [Member]
Prepaid equity-based compensation		35,068
Consulting agreement with an unrelated party [Member] | In January, 2017 [Member]
Prepaid equity-based compensation	364,641
Consulting Agreement For Services Related To Investor Relations [Member] | In February 2017 [Member]
Prepaid equity-based compensation	$ 39,683

XML

Summary of Significant Accounting Policies (Details 2) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Amortization expense for the oil and gas properties	$ 51,282	$ 20,366
Canada [Member]
Amortization expense for the oil and gas properties	17,007	2,064
United States [Member]
Amortization expense for the oil and gas properties	$ 34,275	$ 18,302

XML

Summary of Significant Accounting Policies (Details 3)	3 Months Ended
	Mar. 31, 2017 USD ($) $ / shares shares
Number of Shares
Outstanding, Beginning	5,720,834
Granted
Exercised
Forfeited/expired/cancelled
Outstanding, Ending	5,720,834
Exercisable at December 31, 2016	5,720,834
Exercisable at March 31, 2017	5,720,834
Weighted Average Exercise Price
Outstanding, Beginning | $ / shares	$ 0.19
Granted | $ / shares	0.19
Exercised | $ / shares
Forfeited/expired/cancelled | $ / shares
Outstanding, Ending | $ / shares	0.19
Exercisable at December 31, 2016 | $ / shares	$ 0.19
Exercisable at March 31, 2017	0.19
Weighted Average Remaining Contractual Life
Granted	5 years
Outstanding, Ending	5 years
Exercisable at December 31, 2016	5 years
Aggregate Intrinsic Value
Outstanding, Beginning | $
Granted | $
Forfeited/expired/cancelled | $
Outstanding, Ending | $
Outstanding Exercisable December 31, 2016 | $
Outstanding Exercisable March 31, 2017 | $

XML

Summary of Significant Accounting Policies (Details 4) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Summary Of Significant Accounting Policies Details 4
Asset retirement obligation – beginning	$ 833,017	$ 416,246
Oil and gas purchases		393,808
Accretion expense	8,837	22,963
Asset retirement obligation - ending	$ 841,854	$ 833,017

XML

Summary of Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016	Jan. 09, 2017
Common stock shares issued	59,455,134		53,093,192	3,000,000
Unrealized gain (loss) on securities available-for-sale	$ 1,446	$ (7,265)
Derivative Liabilities	771,493		$ 1,136,894
Conversion features of new convertible debt	$ 304,341
Common stock equivalents as anti-dilutive	6,582,259	6,059,537
Derivative liability adjustment - satisfaction of convertible debt	$ 35,232		685,668
Derivative (gain) loss	336,013	$ (1,655,536)
Significant Unobservable Inputs/Level 3 [Member]
Derivative Liabilities	771,493		1,075,833
Commodity Derivative	5,843
Total Gain Loss [Member]
Derivative Liabilities	$ 269,109		265,448
Commodity Derivative			$ (61,061)
Tanager Energy, Inc. [Member]
Common stock shares issued	1,437,500

XML

Related Party Transactions (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended
	Nov. 30, 2014	Mar. 31, 2017	Dec. 31, 2016
Other receivable - joint venture		$ 76,939	$ 76,939
Controlling purchasing percentage of ownerships	50.00%
Due to related party		1,176,792	$ 1,072,576
Mr. Tom Simeo [Member]
Advances to related party		20,000
Due to related party		16,103
Mr. James A. Doris [Member]
Advances to related party		51,841
Repayments to related party		124,480
Due to related party		298,299
Accrued interest		97,235
Due amount		$ 1,160,689
Interest rate		12.00%
Total loan payable		$ 196,855
Tanager Energy, Inc. [Member]
Loan to Tanager advanced from directors		$ 153,877
Controlling purchasing percentage of ownerships		50.00%

XML

Oil and Gas Properties (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Oil and gas properties, net	$ 1,741,265	$ 1,765,373
Total Oil and Gas Properties, Net	2,951,580	3,002,862
Proved Developed Producing [Member]
Canada cost center		34,733	$ 33,082
United States cost center		1,787,840
Accumulated depletion and impairment amortization	(24,108)	(57,200)	(2,093)
Oil and gas properties, net	(24,108)	1,765,373	30,989
Undeveloped and Non-producing [Member]
Canada cost center		371,481	518,269
United States cost center		917,184
Accumulated depletion and impairment amortization	(27,174)	(51,176)	(32,788)
Oil and gas properties, net	(27,174)	1,237,489	485,481
Total Oil and Gas Properties, Net	(51,282)	3,002,862	$ 516,470
Adjustments Proved Developed Producing [Member]
Canada cost center		1,651
United States cost center		2,838,943
Accumulated depletion and impairment amortization		(55,107)
Oil and gas properties, net		2,785,487
Adjustments Undeveloped and non-producing [Member]
Canada cost center		(1,652)
United States cost center		1,456,414
Accumulated depletion and impairment amortization		(43,464)
Oil and gas properties, net		1,411,298
Total Oil and Gas Properties, Net		2,092,625
Impairments Proved Developed Producing [Member]
Canada cost center	34,733
United States cost center	1,787,840	(1,051,103)
Accumulated depletion and impairment amortization	(81,308)
Oil and gas properties, net	1,741,265	(1,051,103)
Impairments Undeveloped and non-producing [Member]
Canada cost center	371,481	(145,136)
United States cost center	917,184	(539,230)
Accumulated depletion and impairment amortization	(78,350)	25,076
Oil and gas properties, net	(78,350)	(659,290)
Total Oil and Gas Properties, Net	$ 1,210,315	$ (1,710,393)

XML

Oil and Gas Properties (Details Narrative)	3 Months Ended
	Mar. 31, 2017 USD ($) $ / shares shares	Jan. 09, 2017 shares	Dec. 31, 2016 USD ($) $ / shares shares	Oct. 04, 2016 a	Feb. 23, 2016 a
Area of oil and gas acquisition | a				660	281
Common stock shares issued | shares	59,455,134	3,000,000	53,093,192
Common stock, par value | $ / shares	$ 0.001		$ 0.001
Common stock value	$ 59,455		$ 53,093
Common stock exercise price | $ / shares	$ 0.19
Oil and Gas Properties [Member]
Aggregate amount of additional paid-in capital	$ 1,350,000
Common stock shares issued | shares	4,650,000
Common stock, par value | $ / shares	$ .085
Common stock value	$ 395,250
Acquired working interest	100.00%
Net revenue interest acquired	83.00%
Description of property acquisition	Three leases with access to the mineral rights (oil and gas) concerning approximately 270 acres of property in Miami and Franklin Counties in eastern Kansas; and (ii) 31 leases with access to the mineral rights (oil and gas) concerning approximately 5,500 acres of property in Cass and Bates Counties in Missouri
Oil and Gas Properties [Member] | Senior Secured Convertible Promissory [Member]
Common stock shares issued | shares	4,062,500
Common stock, par value | $ / shares	$ 0.15
Borrowed amount	$ 1,625,000
Interest rate	15.00%
Common stock exercise price | $ / shares	$ 0.20
Purchase term	5 years
Loan term	6 months
Oil and Gas Properties [Member] | Vendors [Member]
Common stock shares issued | shares	5,000,000
Common stock, par value | $ / shares	$ .085
Common stock value	$ 425,000
Oil and Gas Properties One [Member]
Aggregate amount of additional paid-in capital	$ 920,857
Common stock shares issued | shares	5,212,021
Common stock value	$ 625,442

XML

Capital Stock and Additional Paid-in Capital (Details Narrative) - USD ($)

1 Months Ended

3 Months Ended

12 Months Ended

Oct. 04, 2016

Feb. 01, 2016

Jan. 12, 2016

Nov. 30, 2016

Oct. 21, 2016

Sep. 30, 2016

Sep. 28, 2016

Aug. 18, 2016

Mar. 21, 2016

Mar. 16, 2016

Mar. 31, 2017

Dec. 31, 2016

Mar. 23, 2017

Feb. 16, 2017

Jan. 25, 2017

Jan. 09, 2017

Dec. 30, 2016

Apr. 29, 2016

Preferred stock Series, par value

$ 0.001

$ 0.001

Preferred stock Series, authorized

5,000,000

5,000,000

Series C preferred stock designated shares

50,000

Voting rights

two thousand (2,000) votes

Common stock, par value

$ 0.001

$ 0.001

Common stock, authorized

2,752,021

100,000,000

100,000,000

Common stock shares issued

59,455,134

53,093,192

3,000,000

Common stock shares sold

$ 187,500

$ 2,059,443

$ 666,666

$ 333,333

$ 66,667

$ 1,250,000

Sale of Stock, Price Per Share

$ 0.15

$ 0.15

$ 0.15

$ 0.15

$ 0.15

$ 0.15

Shares issued in satisfaction of debt , shares

300,926

Shares issued in satisfaction of debt , amount

$ 10,111

$ 10,111

Common shares issued for services, shares

315,000

Common shares issued for services, value

$ 102,500

Common shares issued for consideration for the acquisition, shares

60,000

9,650,000

1,400,000

2,400,000

Common shares issued for consideration for the acquisition, amount

$ 252,000

$ 288,000

Common shares for advisory services agreement

1,000,000

Common shares issued on execution of the contract

375,002

Common shares issued at begnning of month

56,818

Common shares pursuant on certain convertible notes

156,250

Common shares issued for negotiated payment of convertible notes

375,000

Additional interest

$ 52,500

Common shares issued as additional discount on debt

508,335

Securities Purchase Agreement [Member]

Common stock shares sold

$ 1,337,500

$ 1,337,500

Sale of Stock, Price Per Share

$ 0.15

$ 0.15

XML

Long Term Debt (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Long term debt including current and non-current portion	$ 2,954,015	$ 2,881,945
Less current portion	(1,416,136)	(1,302,476)
Long term debt	1,537,879	1,579,469
February 19, 2016, convertible promissory note [Member]
Long term debt including current and non-current portion		125,000
April 29, 2016, convertible promissory note [Member]
Long term debt including current and non-current portion		366,176
July 27, 2016 convertible promissory note [Member]
Long term debt including current and non-current portion		20,000
December 31, 2016 convertible promissory note [Member]
Long term debt including current and non-current portion	1,046,772	421,936
October 4, 2016 convertible promissory note [Member]
Long term debt including current and non-current portion	203,000	203,000
October 4, 2016 convertible promissory note 1 [Member]
Long term debt including current and non-current portion	$ 1,704,243	$ 1,745,833

XML

Long Term Debt (Details Narrative) - USD ($)

3 Months Ended

12 Months Ended

Mar. 31, 2017

Dec. 31, 2016

February 19, 2016, convertible promissory note [Member]

Convertible promissory note

$ 1,625,000

Interest rate

15.00%

Maturity date

Aug. 18, 2016

Terms of conversion price

The conversion price shall be the lowest of (i) $0.15, (ii) 58% of the price of the Company’s securities that are sold in any offering of the Company’s securities in excess of $100,000, of (iii) the conversion price of any Equity converted on or prior to the Conversion Date

Private placement fees

$ 145,000

Value of equity used for conversion price calculation

100,000

April 29, 2016, convertible promissory note [Member]

Convertible promissory note

$ 375,000

Interest rate

10.00%

Original issue discount, Percentage

50.00%

Maturity date

Jan. 12, 2017

Unamortized discount

$ 8,824

Interest payable, Description

Interest is payable on the outstanding principal of these notes at 10% per annum on the Maturity Date

July 27, 2016 convertible promissory note [Member]

Convertible promissory note

$ 20,000

Interest rate

12.00%

Maturity date

Aug. 27, 2016

Amendment to maturity date description

a provision for an extension of six additional terms of 30 days

December 31, 2016 convertible promissory note [Member]

Convertible promissory note

$ 917,833

$ 630,000

Interest rate

10.00%

Original issue discount, Percentage

37.50%

Original issue discount, Description

The discount was modified to fifty percent (50%) retroactively

Maturity date

Apr. 03, 2017

Unamortized discount

$ 501,061

$ 208,064

Interest payable, Description

Interest is payable on the outstanding principal of these notes at 10% per annum on the Maturity Date

Amendment to maturity date description

Extension of the maturity to June 2017

October 4, 2016 convertible promissory note [Member]

Convertible promissory note

$ 203,000

October 4, 2016 convertible promissory note 1 [Member] | Crossfirst Bank [Member]

Convertible promissory note

$ 1,800,000

Interest rate

10.00%

Maturity date

Sep. 30, 2018

Unamortized discount

$ 20,758

$ 24,167

Debt instrument periodic payment

$ 15,000

XML

Subsequent Events (Details Narrative) - shares	May 04, 2017	Apr. 18, 2017	Mar. 31, 2017	Dec. 31, 2016	Oct. 04, 2016
Common stock, authorized			100,000,000	100,000,000	2,752,021
Subsequent Event [Member] | Advisory Board [Member]
Common stock, authorized	1,000,000
Common shares authorized for services	421,667
Subsequent Event [Member] | Consulting agreement [Member]
Common stock issuable per quarter		250,000