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</LabelSeparator><Level>2</Level><ElementName>us-gaap_SignificantAccountingPoliciesTextBlock</ElementName><ElementPrefix>us-gaap_</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsCalendarTitle>false</IsCalendarTitle><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><FootnoteIndexer /><Cells><Cell FlagID="0" ContextID="From2013-01-01to2013-06-30" UnitID=""><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;&lt;b&gt;NOTE
3 &amp;#150; SIGNIFICANT ACCOUNTING POLICIES&lt;/b&gt;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white; text-indent: 0.5in"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;&lt;b&gt;&amp;#160;&lt;/b&gt;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;&lt;u&gt;Use
of Estimates&lt;/u&gt;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white; text-indent: 0.5in"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;&lt;b&gt;&amp;#160;&lt;/b&gt;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ
from those estimates.&lt;b&gt;&amp;#160;&lt;/b&gt;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white; text-indent: 0.5in"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;&lt;b&gt;&amp;#160;&amp;#160;&lt;/b&gt;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;&lt;u&gt;Recent
Accounting Pronouncements&lt;/u&gt;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white; text-indent: 0.5in"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;&lt;b&gt;&amp;#160;&lt;/b&gt;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;The
Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact
on the Company&amp;#146;s financial position or statements.&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;&lt;u&gt;Oil
and Gas Properties&lt;/u&gt;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white; text-indent: 0.5in"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;&lt;b&gt;&amp;#160;&lt;/b&gt;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;The
Company uses the full cost method of accounting for oil and natural gas properties. Under this method, all acquisition, exploration
and development costs, including certain payroll, asset retirement costs, other internal costs, and interest incurred for the
purpose of finding oil and natural gas reserves, are capitalized. Internal costs that are capitalized are directly attributable
to acquisition, exploration and development activities and do not include costs related to production, general corporate overhead
or similar activities. Costs associated with production and general corporate activities are expensed in the period incurred.
Proceeds from the sale of oil and natural gas properties are applied to reduce the capitalized costs of oil and natural gas properties
unless the sale would significantly alter the relationship between capitalized costs and proved reserves, in which case a gain
or loss is recognized.&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;&amp;#160;&amp;#160;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;Capitalized
costs associated with impaired properties and capitalized costs related to properties having proved reserves, plus the estimated
future development costs, and asset retirement costs under Financial Accounting Standards Board (&amp;#147;FASB&amp;#148;) Accounting
Standards Codification (&amp;#147;ASC&amp;#148;) Topic 410&amp;#160;&amp;#147;Asset Retirement and Environmental Obligations&amp;#148;&amp;#160;(FASB
ASC 410), are amortized using the unit-of-production method based on proved reserves. Capitalized costs of oil and natural gas
properties, net of accumulated amortization and deferred income taxes, are limited to the total of estimated future net cash flows
from proved oil and natural gas reserves, discounted at ten percent, plus the cost of unevaluated properties.&amp;#160;&amp;#160;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;&amp;#160;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;There
are many factors, including global events that may influence the production, processing, marketing and price of oil and natural
gas. A reduction in the valuation of oil and natural gas properties resulting from declining prices or production could adversely
impact depletion rates and capitalized cost limitations. Capitalized costs associated with properties that have not been evaluated
through drilling or seismic analysis, including exploration wells in progress, are excluded from the unit-of-production amortization.
Exclusions are adjusted annually based on drilling results and interpretative analysis.&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white; text-indent: 0.5in"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;&lt;b&gt;&amp;#160;&lt;/b&gt;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;Sales
of oil and natural gas properties are accounted for as adjustments to the net full cost pool with no gain or loss recognized,
unless the adjustment would significantly alter the relationship between capitalized costs and proved reserves. If it is determined
that the relationship is significantly altered, the corresponding gain or loss will be recognized in the statements of operations.&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white; text-indent: 0.5in"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;&lt;b&gt;&amp;#160;&amp;#160;&lt;/b&gt;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;Costs
of oil and gas properties are depleted using the unit-of-production method. For the six months ended June 30, 2013, the Company
recognized $97,829 of depletion expense related to oil and gas production.&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white; text-indent: 0.5in"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;&lt;b&gt;&amp;#160;&lt;/b&gt;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;&lt;u&gt;Ceiling
Test&lt;/u&gt;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white; text-indent: 0.5in"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;&lt;b&gt;&amp;#160;&lt;/b&gt;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif; color: black"&gt;&lt;i&gt;Ceiling
Test&amp;#160;&lt;/i&gt;&lt;font style="background-color: white"&gt;- In applying the full cost method and in accordance with ASC 932, the Company
performs an impairment test (ceiling test) at each reporting date, whereby the carrying value of property and equipment is compared
to the value of its proved reserves discounted at a ten percent interest rate of future net revenues, based on current economic
and operating conditions, plus the cost of properties not being amortized, plus the lower of cost or fair market value of unproved
properties included in costs being amortized, less the income tax effects related to book and tax basis differences of the properties.
&lt;/font&gt;&lt;/font&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif; background-color: white"&gt;The Company recorded $13,948 and
$-0- of impairment expense has been recorded in connection with the full cost ceiling test calculation for the six month periods
ending June 30, 2013 and 2012, respectively.&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white; text-indent: 0.5in"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;&lt;b&gt;&amp;#160;&lt;/b&gt;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;&lt;u&gt;Revenue
Recognition&lt;/u&gt;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white; text-indent: 0.5in"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;&lt;b&gt;&amp;#160;&lt;/b&gt;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif; color: black"&gt;Revenues
from the sale of oil and natural gas are recognized &lt;/font&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;according to
the sales method, which is &lt;font style="color: black"&gt;when the product is delivered at a fixed or determinable price, title has
transferred, and collectability is reasonably assured. &amp;#160;For oil sales, this occurs when the customer takes delivery of oil
from the operators&amp;#146; storage tanks.&lt;/font&gt;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;&lt;b&gt;&amp;#160;&lt;/b&gt;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;&lt;u&gt;Asset
Retirement Obligations&lt;/u&gt;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;&amp;#160;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;&lt;font style="font: 10pt Times New Roman, Times, Serif"&gt;The
Company records the fair value of a liability for an asset retirement obligation in the period in which it is incurred and a corresponding
increase in the carrying amount of the related long-lived asset. The liability is accreted to its present value each period, and
the capitalized cost is depreciated over the useful life of the related asset. If the liability is settled for an amount other
than the recorded amount, a gain or loss is recognized.&lt;/font&gt;&lt;/p&gt;</NonNumbericText><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>nonnum:textBlockItemType</ElementDataType><SimpleDataType>na</SimpleDataType><ElementDefenition>The entire disclosure for all significant accounting policies of the reporting entity.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef

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