Oil and Gas Assets

6 Months Ended

Oct. 31, 2015

Extractive Industries [Abstract]

Oil and Gas Assets

The following table summarizes the oil and gas assets by project:

Cost	Oklahoma			Kansas			Missouri		Other		Total
Balance April 30, 2015	$	6,935,000		$	7,803,020		$	918,991	$	100,000	$	15,757,011
Additions		7,283			-			-		-		7,283
Disposals		(279,013	)		-			-		-		(279,013	)
Depreciation, depletion and amortization		(23,042	)		(58,634	)		-		-		(81,676	)
Balance October 31, 2015	$	6,640,228		$	7,744,386		$	918,991	$	100,000	$	15,403,605

During the six months ended October 31, 2015, the Company disposed of oil and gas assets and received proceeds totaling $279,013. The proceeds were offset against the full cost pool therefore no gain or loss was recognized.

As of April 30, 2015, the Company performed a ceiling test on the oil and gas assets and recognized an impairment charge of $1,246,975. As of October 31, 2015, the Company performed a ceiling test on the oil and gas assets and no impairment was noted.

Change in Personia West Concession.  On July 31, 2015, the Company received formal notice from the Osage Mineral Council that the new concession terms for the Pearsonia West Concession (“Pearsonia West”) are effective and formalized. Pearsonia West is a 106,500 contiguous acre position in Osage County, Oklahoma which the Company owns a controlling interest in through its investment in Bandolier Energy LLC, whole owner of the concession.  

The new terms allow for vertical drilling obligations to hold the concession which previously had horizontal drilling obligations.  This provides a significant cost savings to the Company and preserves potential control of its core asset until 2018, assuming the negotiated obligations are met. Previously, the concession required 11 horizontal wells to be drilled by the end of 2015 with the concession terminating in the event these wells were not drilled.  The estimated cost of this obligation was approximately $22.1 million.

Pursuant to the new terms, assuming estimated completion costs of $300,000 per vertical well, the drilling obligations only require capital expenditures of: $1.8 million in 2016, $2.7 million in 2017, and $3.6 million in 2018, collectively $8.1 million to hold the entire concession.  This represents a cost savings to the Company of approximately $14.0 million while gaining an extra three years of potential control. 

The Company is currently exploring multiple options for development for the Pearsonia Concession including entertaining inquiries from industry and joint venture partners.