Oil and Natural Gas Properties

9 Months Ended

Sep. 30, 2011

Oil and Natural Gas Properties [Abstract]

OIL AND NATURAL GAS PROPERTIES

NOTE 3 OIL AND NATURAL GAS PROPERTIES

Major Joint Venture

In May 2008, the Company entered into the Major Joint Venture Agreement with a third-party partner to acquire certain oil and natural gas leases in the Tiger Ridge Gas Field in Blaine, Hill, and Choteau Counties of Montana. Under the terms of the joint venture agreement, the Company is responsible for all lease acquisition costs. The third-party joint venture partner is responsible for coordinating the geology, acquiring the leases in its name, preparing and disseminating assignments, accounting for the project costs and administration of the well operator. The Company controls an 87.5% working interest on all future production and reserves, while the third-party joint venture partner controls a 12.5% working interest. The joint venture had accumulated oil and natural gas leases totaling 67,384 net mineral acres as of September 30, 2011. The Company initially committed to a minimum of $1,000,000 toward this joint venture.  An amendment to the joint venture agreement was executed in April 2011 to remove the maximum amount committed under the joint venture.  The third-party joint venture partner issues cash calls during the year to replenish the joint venture cash account. The Company’s contributions to the joint venture totaled $3,910,917 as of September 30, 2011, consisting of $1,861,878 in leasing costs, $1,610,434 in seismic costs and $149,987 in drilling costs. The unutilized cash balance was $288,618 as of September 30, 2011.

Tiger Ridge Joint Venture

In November 2009, the Company entered into the Tiger Ridge Joint Venture Agreement with a third-party and a well operator to develop and exploit a drilling program in two certain blocks of acreage in the Major Joint Venture, which is an area of mutual interest. The Company controls a 70% working interest, while the third-party investor and well operator control a 10% working interest and 20% working interest, respectively. The joint venture agreement requires that all parties contribute in cash their proportional share to cover all costs incurred in developing these blocks of acreage for drilling. Drilling activity commenced on three wells in October 2011.

Big Snowy Joint Venture

In October 2008, the Company entered into the Big Snowy Joint Venture Agreement with an administrator third-party to acquire certain oil and natural gas leases in the Heath oil play in Musselshell, Petroleum, Garfield, Rosebud and Fergus Counties of Montana, and another third-party to perform as the operator. Under the terms of the agreement, the Company is responsible for 72.5% of lease acquisition costs, and the other two third-parties are individually responsible for 2.5% and 25% of the lease acquisition costs. Each party controls the same respective working interest on all future production and reserves.  The administrator third-party joint venture partner is responsible for coordinating the geology, acquiring the leases in its name, preparing and disseminating assignments, accounting for the project costs and administration of the well operator.  The joint venture had accumulated oil and natural gas leases totaling 33,562 net mineral acres as of September 30, 2011. The Company is committed to a minimum of $1,000,000 and up to $1,993,750 toward this joint venture, with all partners, including the Company, committing a minimum of $2,750,000. The administrator third-party joint venture partner issues cash calls during the year to replenish the joint venture cash account. The Company’s contributions to the joint venture totaled $724,744 as of September 30, 2011. The unutilized cash balance was $11,799 as of September 30, 2011.

Niobrara Development with Slawson Exploration Company, Inc.

On June 28, 2010, the Company entered into an exploration and development agreement with Slawson Exploration Company, Inc. (“Slawson”) to develop Slawson’s 48,000 net acres in the Niobrara formation of the Denver-Julesberg (D-J) Basin in Weld County, Colorado, which included approximately 34,000 net acres leased from the State of Colorado. Slawson commenced the continuous drilling program in early July 2010 with an initial series of three test wells. Beginning in October 2010, Slawson commenced drilling operations on 15 spacing units and an additional 10 spacing units’ leases which were granted extensions to November 2011 by the state of Colorado due to access restrictions. Voyager purchased a 50% working interest in the approximately 48,000 acre block for $7.5 million to participate on a heads-up basis on all wells drilled, as well as participate for its proportionate working interest in all additional acreage acquired in an Area of Mutual Interest consisting of Weld County, Colorado and Laramie County, Wyoming. Following the results of the initial three test wells, Voyager and Slawson allowed approximately 15,000 acres of the initial 34,000 acres of state leases in Weld County, Colorado to expire on November 15, 2010. The Company currently holds approximately 10,000 net acres. Three additional wells were drilled during the quarter ended March 31, 2011 and were in production as of September 30, 2011. There are no plans for additional development wells in 2011.

Other Property Acquisitions

On May 24, 2011, the Company purchased certain leases consisting of approximately 1,680 net acres in Williams County, North Dakota and Richland County, Montana for a total purchase price of $2,514,863.   On May 27, 2011 the Company purchased certain leases consisting of approximately 1,195 net acres in Richland County, Montana for a total purchase price of $1,792,950.  The Company has also completed other miscellaneous acquisitions in the Williston Basin of Montana and North Dakota during the nine months ended September 30, 2011.