OIL AND GAS PRODUCING ACTIVITIES 2 (Tables)

12 Months Ended

Dec. 31, 2014

OIL AND GAS PRODUCING ACTIVITIES [Abstract]

Oil and Natural Gas Producing Activities

The following table sets forth the costs incurred for oil and natural gas property activities of the Company:

	Years Ended December 31,
	2014		2013
Costs incurred in oil and natural gas producing activities:
Acquisition of unproved properties	$	-	$	-
Acquisition of proved properties		-		-
Exploration costs		462,302		152,650
Development costs		5,635,098		3,479,135
Total costs incurred	$	6,097,400	$	3,631,785

Results of Operations for Oil and Gas Producing Activities

The following table includes certain information regarding the results of operations for oil and natural gas producing activities:

	Years Ended December 31,
	2014			2013
Revenues	$	9,106,483		$	10,325,380
Expenses
Production expense		3,925,481			3,909,637
Depletion and depreciation		2,626,300			2,395,000
Exploration expense		462,302			152,650
Impairment of oil and natural gas properties		3,085,787			485,999
Accretion of discount on asset retirement obligations		104,000			96,000
Total expenses		10,203,870			7,039,286
Income before income taxes		(1,097,387	)		3,286,094
Income tax benefit (expense) (1)		373,112			(1,215,855	)
Results of operations for oil and natural gas producing activities (excluding corporate overhead and interest costs)	$	(724,275	)	$	2,070,239

(1) Reflects the Company’s effective tax rate.