OIL AND NATURAL GAS PROPERTIES

12 Months Ended

Dec. 31, 2013

OIL AND NATURAL GAS PROPERTIES [Abstract]

2.	OIL AND NATURAL GAS PROPERTIES

The Company made no purchases of oil and natural gas properties during the years ended December 31, 2013 and 2012. The Company drilled a successful developmental well in New Mexico in 2013, for which the net cost to the Company was approximately $3,000,000. The Company also drilled a successful developmental well in New Mexico in 2012, for which the net cost to the Company was approximately $3,000,000.

The Company sold its interest in the Stauss Field in October 2013 for net proceeds of $5,000. A gain of $4,000 was recognized on the sale as the property had been previously impaired. The Company sold its interest in the South Vacuum Field in October 2012 for net proceeds of $204,000. A gain of $204,000 was recognized in 2012 on the sale as the property had been fully impaired.

The Irby #1 on the Riverdale Prospect in Goliad County, Texas, was drilled and deemed to be non-economic after analyzing the electric logs. The decision was made to plug and abandon the well and no other exploratory wells are planned for this prospect. Dry hole expenses of $152,650 were recognized for the twelve months ending December 31, 2013. No dry hole expenses were recognized in 2012.