Financial Instruments and Derivatives

12 Months Ended

Dec. 31, 2011

General Discussion Of Derivative Instruments and Hedging Activities [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

NOTE 5 - FINANCIAL INSTRUMENTS AND DERIVATIVES

Periodically, the Company enters into various commodity derivative financial instruments intended to hedge against exposure to market fluctuations of oil prices. During the year ended December 31, 2011, the Company terminated and settled certain future commodity swaps resulting in a realized gain of approximately $625,000.

As of December 31, 2011, the Company maintained an active commodity swap for 100 barrels per day through December 31, 2012, at a price of $96.25 per barrel.

The amount of gain (loss) recognized in income related to our derivative financial instruments was as follows:

	For the Year Ended December 31,
	2011			2010			2009(1)
Realized gain on oil price hedges	$	625,043		$	570,233		$	-
Unrealized loss oil price hedges	$	(75,609	)	$	(398,840	)	$	-

(1)   Prior to January 1, 2010, the Company did not enter any derivative financial instruments. 

Unrealized gains and losses resulting from derivatives are recorded at fair value on the consolidated balance sheet and changes in fair value are recognized in the unrealized gain (loss) on hedge contracts line on the consolidated statement of operations. Realized gains and losses resulting from the contract settlement of derivatives are recorded in the realized gain (loss)  line on the consolidated statement of income. As of December 31, 2011, the Company recorded an unrealized loss on its only active swap of $75,609.