OIL AND GAS PROPERTIES (Tables)

12 Months Ended

Dec. 31, 2012

Computation of gain on sale of oil and gas property

At December 31, 2011, the Company's estimated proved reserves associated with the La Cuerva and LLA 62 blocks totaled 94,619 barrels of oil, which represented 82% of the Company's estimated proved oil and natural gas reserves. Sales of oil and gas properties under the full cost method of accounting are accounted for as adjustments of capitalized costs with no gain or loss recognized, unless the adjustment significantly alters the relationship between capitalized costs and reserves. Since the sale of these oil and gas properties would significantly alter the relationship, the Company recognized a gain on the sale of $315,119 during 2012, computed as follows:

Sales price	$	1,224,393
Add: Transfer of asset retirement and other obligations		34,471
Less: Transaction costs		(30,330	)
Less: Prepaid deposits		(54,857	)
Less: Carrying value of oil and gas properties, net		(858,558	)
Net gain on sale	$	315,119

Pro-Forma Information

The following table presents pro forma data that reflects revenue, income from continuing operations, net loss and loss per common share for 2012 and 2011 as if the HC, LLC sale had occurred at the beginning of each period and excludes the gain on sale.

Pro-Forma Information (unaudited):	2012		2011

Oil and gas revenue	$	148,163	$	148,266
Loss from operations	$	(56,566,181)	$	(5,943,911)
Net loss	$	(56,847,211)	$	(4,366,837)

Basic and diluted loss per common share	$	(1.47)	$	(0.14)

Schedule of unevaluated oil and gas properties not subject to amortization

Unevaluated Oil and Gas Properties

Unevaluated oil and gas properties not subject to amortization at December 31, 2012 included the following:

	North America		South America		Total
Leasehold acquisition costs	$	972,005	$	2,015,850	$	2,987,855
Geological, geophysical, screening and evaluation costs		880		2,820,562		2,821,442
Total	$	972,885	$	4,836,412	$	5,809,297

Unevaluated oil and gas properties not subject to amortization at December 31, 2011 included the following:

	North America		South America		Total
Leasehold acquisition costs	$	861,169	$	4,464,200	$	5,325,369
Geological, geophysical, screening and evaluation costs		880		17,564,695		17,565,575
Total	$	862,049	$	22,028,895	$	22,890,944