8. Oil and Natural Gas Properties

12 Months Ended

Dec. 31, 2015

Oil and Gas Exploration and Production Industries Disclosures [Abstract]

Oil and Natural Gas Properties

The following tables summarize gross and net productive oil wells by state at December 31, 2015 and 2014. A net well represents our percentage ownership of a gross well. The following tables do not include wells in which our interest is limited to royalty and overriding royalty interests. The following tables also do not include wells which were awaiting completion, in the process of completion or awaiting flow back subsequent to fracture stimulation.

	December 31, 2015				December 31, 2014
	Gross		Net		Gross		Net
North Dakota		344		10.58		242		7.51
Montana		5		0.37		5		0.37
		349		10.95		247		7.88

The Company’s oil and natural gas properties consist of all acreage acquisition costs (including cash expenditures and the value of stock consideration), drilling costs and other associated capitalized costs. As of December 31, 2015 and 2014, our principal oil and gas assets included approximately 8,100 and 10,000 net acres, respectively, located in North Dakota and Montana.

The following table summarizes our capitalized costs for the purchase and development of our oil and natural gas properties for the years ended December 31, 2015 and 2014:

	Years Ended December 31,
	2015			2014
Purchases of oil and natural gas properties and development costs for cash	$	20,714,004		$	24,739,407
Purchase of oil and natural gas properties accrued at year-end		6,899,503			9,364,796
Purchase of oil and natural gas properties accrued at the beginning of the year		(9,364,796	)		(7,953,801	)
Advances to operators applied to development of oil and natural gas properties		–			6,036,748
Capitalized asset retirement obligations		48,711			103,778
Total purchase and development costs, oil and natural gas properties	$	18,297,422		$	32,290,928

2015 Acquisitions

During 2015, the Company purchased approximately 9 net mineral acres of oil and natural gas properties in North Dakota and Montana. In consideration for the assignment of these mineral leases, we paid the sellers a total of approximately $102,928.

2015 Divestitures

During 2015, the Company sold approximately 14 net mineral acres of oil and natural gas properties and rights to individual well bores in North Dakota for total proceeds of $127,348. No gain or loss was recorded pursuant to the sales.

2014 Acquisitions

During 2014, the Company purchased approximately 374 net mineral acres of oil and natural gas properties in North Dakota and Montana. In consideration for the assignment of these mineral leases, we paid the sellers a total of approximately $3,102,568.

2014 Divestitures

During 2014, the Company sold approximately 502 net mineral acres of oil and natural gas properties and rights to individual well bores in North Dakota for total proceeds of $1,441,929. No gain or loss was recorded pursuant to the sales.

Undeveloped Acreage Expirations

During 2015 and 2014, we had leases encompassing 1,866 and 4,202 net acres, respectively; expire with carrying costs of $1,982,674 and $6,198,163, respectively that have been transferred to the full cost pool subject to depletion. We estimate that approximately 1,114 net acres with carrying costs of approximately $689,000 will expire prior to the commencement of production activities during 2016. The carrying costs of these leases, including those which we estimate will expire in 2016 have also been transferred to the full cost pool and are subject to depletion and ceiling test impairments. Additionally, approximately $285,000 of carrying cost related relating to leasehold interests expiring in 2017 and 2018 were transferred to the full cost pool due to impairments in the market value of the leasehold assets and were also subject to depreciation and ceiling test impairments.