Organization	3 Months Ended
Jul. 31, 2016
Organization And Liquidity
Organization	Petro River Oil Corp. (the “Company”) is an independent energy company focused on the exploration and development of conventional oil and gas assets with low discovery and development costs. The Company is focused on taking advantage of the current downturn in oil prices to enter highly prospective plays with industry-leading partners. Diversification over a number of projects, each with low initial capital expenditures and strong risk reward characteristics, reduces risk and provides cross-functional exposure to a number of attractive risk adjusted opportunities. The Company recently completed a reorganization, including the addition of new management, the acquisition of several promising new assets, and an infusion of cash. In connection with the reorganization, the Company consummated the MegaWest Transaction, defined below, in which Fortis Property Group, LLC (“Fortis”) and the Company plan to jointly develop its acreage in Osage County, Oklahoma and other oil and gas assets. The Company’s core holdings are in the Mid-Continent Region in Oklahoma and Larne Basin, Northern Ireland. Following the acquisition of Horizon I Investments, LLC (“Horizon Investments”), the Company now has exposure to a portfolio of several domestic and international oil and gas assets consisting of highly prospective conventional plays diversified across project type, geographic location and risk profile, as well as access to a broad network of industry leaders from Horizon Investment’s 20% interest in Horizon Energy Partners, LLC (“Horizon Energy”). Horizon Energy is an oil and gas exploration and development company owned and managed by former senior oil and gas executives. It has a portfolio of domestic and international assets, including two assets located in the United Kingdom, adjacent to the giant Wytch Farm oil field, the largest onshore oil field in Western Europe. Other projects include the proposed redevelopment of a large oil field in Kern County, California and the development of an additional recent discovery in Kern County. Each of the assets in the Horizon Energy portfolio is characterized by low initial capital expenditure requirements and strong risk reward characteristics. In light of the challenging oil price environment and capital markets, management is focusing on specific target acquisitions and investments, limiting operating expenses and exploring farm-in and joint venture opportunities for the Company’s oil and gas assets. No assurances can be given that management will be successful. Certain Transactions and Recent Developments Spyglass Drilling Program. On August 19, 2016, Spyglass Energy Group, LLC (“Spyglass”), a wholly owned subsidiary of Bandolier Energy, LLC (“Bandolier”), entered into a Joint Exploration and Development Agreement (the “Exploration Agreement”) between Spyglass, Phoenix 2016, LLC (“Phoenix”) and Mackey Consulting & Leasing, LLC (“Mackey”). Pursuant to the Exploration Agreement, Phoenix and Mackey shall operate and provide certain services, including obtaining permits and providing technical services, at cost, in connection with a Phase I Development Program as agreed to by the parties (the “Phase I Program”). Phoenix and Mackey shall earn a 25% working interest on all wells drilled in the Phase I Program. Following success and completion of the Phase I Program, Phoenix and Mackey shall earn a 25% working interest in the Osage County, Oklahoma Concession held by Spyglass. Under the Exploration Agreement, Bandolier has agreed commit up to $2.1 million towards costs of the Phase I Program, at their sole discretion. Divestiture of Missouri Properties. Effective July 11, 2016, MegaWest Energy Missouri Corp (“MegaWest Missouri”) assigned its leaseholds covering approximately 320 acres in Grassy Creek, Missouri (the “Grassy Creek Assets”) to Paluca Petroleum, Inc. (“Paluca”) in furtherance of the Company’s corporate strategy to divest its legacy assets. Pursuant to the terms and conditions of the assignment, Paluca agreed to assume all liabilities associated with the Grassy Creek Assets and, as consideration for the assignment, granted MegaWest Missouri an overriding royalty interest equal to 4% of the value of all oil and gas assets produced and sold under the assigned lease. MegaWest Transaction. On October 15, 2015, the Company entered into a contribution agreement (the “Contribution Agreement”) with MegaWest and Fortis Property Group, LLC, a Delaware limited liability company (“Fortis”), pursuant to which the Company and Fortis each agreed to contribute certain assets to MegaWest in exchange for shares of MegaWest common stock (“MegaWest Shares”) (the “MegaWest Transaction”). Upon execution of the Contribution Agreement, (i) the Company transferred its 50% membership interest in Bandolier (the “Bandolier Interest”), and cancelled all of its ownership interest in the then issued and outstanding MegaWest Shares, which prior to the MegaWest Transaction represented 100% ownership of MegaWest; and (ii) Fortis transferred certain indirect interests held in 30 condominium units and the rights to any profits and proceeds therefrom. Immediately thereafter, MegaWest issued to the Company 58,510 MegaWest Shares, representing a 58.51% equity interest in MegaWest, as consideration for the assignment of the Bandolier Interest, and issued to Fortis 41,490 MegaWest Shares, representing a 41.49% equity interest in MegaWest, as consideration for the assets assigned to MegaWest by Fortis. The account receivable and the Company’s interest in real estate reflected on the Company’s balance sheet are assets held by MegaWest, and are controlled by MegaWest’s board of directors, consisting of two members appointed by Fortis, and one by the Company. The relative composition of the board of directors of MegaWest shall continue as long as Fortis has an equity interest in MegaWest. Subject to the terms and conditions of the Contribution Agreement, the Contribution Agreement provided for a redetermination of the fair market value of the Bandolier Interest at any time following the six month anniversary after the execution thereof (the “Redetermination”), Upon a Redetermination, which has not occurred as of July 31, 2016, in the event there is a shortfall from the valuation ascribed to the Bandolier Interest at the time of the Redetermination, as compared to the value ascribed to the Bandolier Interest in the Contribution Agreement, the Company will be required to provide Fortis with a cash payment in an amount equal to the shortfall. If the Company is unable to deliver to Fortis the cash payment required after the Redetermination, if any, the board of directors of MegaWest shall have the right to exercise certain remedies against the Company, including a right to foreclose on the Company’s entire equity in MegaWest, which equity interest has been pledged to Fortis under the terms of the Contribution Agreement. In the event of foreclosure, the Bandolier Interest would revert back to the Company.

Organization

3 Months Ended

Jul. 31, 2016

Petro River Oil Corp. (the “Company”) is an independent energy company focused on the exploration and development of conventional oil and gas assets with low discovery and development costs. The Company is focused on taking advantage of the current downturn in oil prices to enter highly prospective plays with industry-leading partners. Diversification over a number of projects, each with low initial capital expenditures and strong risk reward characteristics, reduces risk and provides cross-functional exposure to a number of attractive risk adjusted opportunities.

The Company recently completed a reorganization, including the addition of new management, the acquisition of several promising new assets, and an infusion of cash. In connection with the reorganization, the Company consummated the MegaWest Transaction, defined below, in which Fortis Property Group, LLC (“Fortis”) and the Company plan to jointly develop its acreage in Osage County, Oklahoma and other oil and gas assets.

The Company’s core holdings are in the Mid-Continent Region in Oklahoma and Larne Basin, Northern Ireland. Following the acquisition of Horizon I Investments, LLC (“Horizon Investments”), the Company now has exposure to a portfolio of several domestic and international oil and gas assets consisting of highly prospective conventional plays diversified across project type, geographic location and risk profile, as well as access to a broad network of industry leaders from Horizon Investment’s 20% interest in Horizon Energy Partners, LLC (“Horizon Energy”). Horizon Energy is an oil and gas exploration and development company owned and managed by former senior oil and gas executives. It has a portfolio of domestic and international assets, including two assets located in the United Kingdom, adjacent to the giant Wytch Farm oil field, the largest onshore oil field in Western Europe. Other projects include the proposed redevelopment of a large oil field in Kern County, California and the development of an additional recent discovery in Kern County. Each of the assets in the Horizon Energy portfolio is characterized by low initial capital expenditure requirements and strong risk reward characteristics.

In light of the challenging oil price environment and capital markets, management is focusing on specific target acquisitions and investments, limiting operating expenses and exploring farm-in and joint venture opportunities for the Company’s oil and gas assets. No assurances can be given that management will be successful.

Certain Transactions and Recent Developments

Spyglass Drilling Program. On August 19, 2016, Spyglass Energy Group, LLC (“Spyglass”), a wholly owned subsidiary of Bandolier Energy, LLC (“Bandolier”), entered into a Joint Exploration and Development Agreement (the “Exploration Agreement”) between Spyglass, Phoenix 2016, LLC (“Phoenix”) and Mackey Consulting & Leasing, LLC (“Mackey”). Pursuant to the Exploration Agreement, Phoenix and Mackey shall operate and provide certain services, including obtaining permits and providing technical services, at cost, in connection with a Phase I Development Program as agreed to by the parties (the “Phase I Program”). Phoenix and Mackey shall earn a 25% working interest on all wells drilled in the Phase I Program. Following success and completion of the Phase I Program, Phoenix and Mackey shall earn a 25% working interest in the Osage County, Oklahoma Concession held by Spyglass. Under the Exploration Agreement, Bandolier has agreed commit up to $2.1 million towards costs of the Phase I Program, at their sole discretion.

Divestiture of Missouri Properties. Effective July 11, 2016, MegaWest Energy Missouri Corp (“MegaWest Missouri”) assigned its leaseholds covering approximately 320 acres in Grassy Creek, Missouri (the “Grassy Creek Assets”) to Paluca Petroleum, Inc. (“Paluca”) in furtherance of the Company’s corporate strategy to divest its legacy assets. Pursuant to the terms and conditions of the assignment, Paluca agreed to assume all liabilities associated with the Grassy Creek Assets and, as consideration for the assignment, granted MegaWest Missouri an overriding royalty interest equal to 4% of the value of all oil and gas assets produced and sold under the assigned lease.

MegaWest Transaction. On October 15, 2015, the Company entered into a contribution agreement (the “Contribution Agreement”) with MegaWest and Fortis Property Group, LLC, a Delaware limited liability company (“Fortis”), pursuant to which the Company and Fortis each agreed to contribute certain assets to MegaWest in exchange for shares of MegaWest common stock (“MegaWest Shares”) (the “MegaWest Transaction”).

Upon execution of the Contribution Agreement, (i) the Company transferred its 50% membership interest in Bandolier (the “Bandolier Interest”), and cancelled all of its ownership interest in the then issued and outstanding MegaWest Shares, which prior to the MegaWest Transaction represented 100% ownership of MegaWest; and (ii) Fortis transferred certain indirect interests held in 30 condominium units and the rights to any profits and proceeds therefrom. Immediately thereafter, MegaWest issued to the Company 58,510 MegaWest Shares, representing a 58.51% equity interest in MegaWest, as consideration for the assignment of the Bandolier Interest, and issued to Fortis 41,490 MegaWest Shares, representing a 41.49% equity interest in MegaWest, as consideration for the assets assigned to MegaWest by Fortis. The account receivable and the Company’s interest in real estate reflected on the Company’s balance sheet are assets held by MegaWest, and are controlled by MegaWest’s board of directors, consisting of two members appointed by Fortis, and one by the Company. The relative composition of the board of directors of MegaWest shall continue as long as Fortis has an equity interest in MegaWest.

Subject to the terms and conditions of the Contribution Agreement, the Contribution Agreement provided for a redetermination of the fair market value of the Bandolier Interest at any time following the six month anniversary after the execution thereof (the “Redetermination”), Upon a Redetermination, which has not occurred as of July 31, 2016, in the event there is a shortfall from the valuation ascribed to the Bandolier Interest at the time of the Redetermination, as compared to the value ascribed to the Bandolier Interest in the Contribution Agreement, the Company will be required to provide Fortis with a cash payment in an amount equal to the shortfall. If the Company is unable to deliver to Fortis the cash payment required after the Redetermination, if any, the board of directors of MegaWest shall have the right to exercise certain remedies against the Company, including a right to foreclose on the Company’s entire equity in MegaWest, which equity interest has been pledged to Fortis under the terms of the Contribution Agreement. In the event of foreclosure, the Bandolier Interest would revert back to the Company.