Oil And Gas Properties

12 Months Ended

Dec. 31, 2014

Extractive Industries [Abstract]

Oil and Gas Properties

NOTE 5 – OIL AND GAS PROPERTIES

Oil and gas properties are stated at cost. The Company recognized depletion expense totaling $181,008 and $263,987 during the years ended December 31, 2014 and 2013, respectively. As of December 31, 2014 and 2013 oil and gas properties consisted of the following:

	December 31, 2014			December 31, 2013
Proved producing properties	$	580,825		$	1,044,068
Proved non-producing properties		45,572			14,448
Unproved properties		396,325			264,718
Accumulated depletion		(693,699	)		(745,638	)
Net Oil and Gas Properties	$	329,023		$	577,596

All of the Company’s oil and natural gas properties are located in the United States.  Costs being amortized at December 31, 2014 and 2013 are as follows:

	December 31,
	2014			2013
Proved leasehold costs	$	626,397		$	596,631
Costs of wells and equipment		561,690			842,829
Capitalized asset retirement costs		102,266			113,638
Total oil and gas properties		1,290,353			1,553,098
Accumulated depreciation and depletion		(818,040	)		(834,336	)
Net Capitalized Costs	$	472,313		$	718,762

The following table sets forth the changes in the total cost of oil and natural gas properties at December 31, for each of the two years in the period ended December 31, 2014:

	December 31,
	2014			2013
Balance at Beginning of Period	$	1,553,098		$	1,583,899
Acquisitions using cash		—			—
Other capitalized costs		116,708			133,075
Sale proceeds		(379,453	)		(163,876	)
Other non-cash transactions		—			—
Balance at End of Period	$	1,290,353		$	1,553,098

Other capitalized costs include title related expenses and tangible and intangible drilling costs.

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 year ended December 31, 2014 and 2013, the Company incurred development costs including certain work-over costs and other improvements to its wells. The Company paid $30,445 and $119,149, respectively for these improvements, which have been capitalized to the book value of the wells.

Through December 31, 2014, the Company established an asset retirement obligation of $106,721 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 on the asset retirement obligation was $51,031, leaving an ending net balance of $157,752 at December 31, 2014.