10.	COMMITMENTS

As of December 31, 2013 and 2012, we had a $30,000 outstanding standby letter of credit in favor of the State of Wyoming as a plugging bond. The letter of credit is collateralized by our line of credit with Citibank.

On November 12, 2013, we engaged Stephens, Inc. ("Stephens") to provide general financial and Investment Banking advice. Pursuant to the agreement we began paying Stephens a retainer of $10,000 per month, paid monthly in advance beginning January 1, 2014. The agreement can be terminated by either party with thirty days' notice with no further obligation for a monthly retainer. The agreement provides for success fees in the range of 1% to 7% depending on the nature of the transaction. Furthermore, any amounts paid for the retainer would be credited against any investment banking fees due in the event of a successful transaction.

On October 24, 2008, our Board of Directors approved a Performance Based Bonus Program (the "Bonus Program") for our President and Chief Executive Officer. The Bonus Program is calculated and paid annually based on four performance parameters: 1) annual reserve additions from drilling and acquisitions; 2) growth in annual production; 3) growth in annual year over year earnings (before taxes and bonus); and 4) other notable achievements as the Board may recognize from time to time which are not easily quantifiable in the first three parameters. Bonus awards of up to 50% of annual base salary may be achieved in each of the first three categories and up to 10% in the fourth category provided that the maximum bonus award for any year may not exceed 150% of base salary which is currently $280,000. No bonuses were awarded under the Bonus Program in 2013. The Bonus Program is no longer in effect due to the death of our former President, Ray Reaves. We awarded approximately $300,000 to our former President and Chief Executive Officer, Ray Reaves, under the Bonus Program in 2012.