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Oil And Gas Properties
6 Months Ended
Jun. 30, 2014
Extractive Industries [Abstract]  
Oil and Gas Properties

NOTE 4 – OIL AND GAS PROPERTIES

 

On February 5, 2013 the Company sold a 30 percent gross working interest and a 30 percent net revenue interest in six oil and gas leases located in Pratt County, Kansas for $100,000. This amount was deducted from funds payable from the Company to the purchasing entity on July 18, 2013. Pursuant to this transaction the Company transferred a 30 percent interest in all related support equipment and asset retirement obligations.

 

On February 1, 2014 the Company entered into a Purchase and Sale Agreement whereby it agreed to sell 100 percent of its working interest in two oil and gas leases located in Cowley and Stafford counties, Kansas. As consideration for this transaction, the buyer agreed to forgive $113,500 in Company debts due to the buyer.

 

During the six months ended June 30, 2014 and the year ended December 31, 2013, the Company incurred development costs including certain work-over costs and other improvements to its wells. The Company paid $29,383and $119,149, respectively for these improvements, which have been capitalized to the book value of the wells.

 

Through June 30, 2014, the Company established an asset retirement obligation of $102,611 for the wells acquired by the Company, which was capitalized to the value of the oil and gas properties. The wells have an estimated useful life of 25 years. Total accretion expense on the asset retirement obligation was $46,921, leaving an ending net balance of $149,532 at June 30, 2014.