GOING CONCERN

3 Months Ended

Jun. 30, 2011

Going Concern Disclosure [Abstract]

Going Concern Disclosure [Text Block]

2. GOING CONCERN

The Company’s financial statements have been prepared on a going concern basis which contemplates the realization of assets and the liquidation of liabilities in the ordinary course of business. The Company has incurred substantial losses from operations and it has negative operating cash flows which raises substantial doubt about its ability to continue as a going concern. The Company had net income of $1,268,871 for the quarter ended June 30, 2011 and has an accumulated deficit of $66,715,679, at June 30, 2011.

The Company intends to continue its planned capital expenditure to continue its reworking and drilling programs, but does not have sufficient realized revenues and cash on hand is not adequate to cover immediate cash needs. However, the Company expects revenues from production will be enough to cover operating expenses in the near term.

Although the Company obtained additional financing of approximately $1.9 million in July 2011 (see Note 9), which provided the needed funds for continued operations and drilling program in the short term, the Company can provide no assurance that it will be able to obtain sufficient additional financing that it needs to develop its properties and alleviate doubt about its ability to continue as a going concern. If the Company is able to obtain sufficient additional financing proceeds, the Company cannot be certain that this additional financing will be available on acceptable terms, if at all. To the extent the Company raises additional funds by issuing equity securities, the Company’s stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that impact the Company’s ability to conduct business. Furthermore, certain of the Company’s current creditors may be required to approve any such transaction.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.