Discontinued Operations

12 Months Ended

Dec. 31, 2012

Discontinued Operations

Note 11 Discontinued Operations

On October 11, 2012, the board of directors of the Company formed a special committee, consisting solely of independent directors, to consider a proposal from the Company's President, Chief Executive Officer and Director, Frederick M. Pevow, Jr., for a sale of certain of the Company's assets to Mr. Pevow (the “Asset Sale”).

On December 12, 2012, Gateway Pipeline USA Corporation (“Gateway Pipeline USA”), a wholly owned subsidiary of the Company, entered into an asset sales agreement (the “ASA”) with FMP Holdings, LLC (the “Buyer”), pursuant to which Gateway Pipeline USA would sell certain assets, including certain pipelines and pipeline facilities located in Guadalupe and Shelby Counties, Texas, Miller County, Arkansas and Pettis County, Missouri, as well as certain surface contracts, commercial contracts and records related to the operation of the facilities (the “Sold Assets”), to the Buyer for $1,100,000.  All of the issued and outstanding capital stock of the Buyer is owned by Frederick M. Pevow, the President, Chief Executive Officer and Director of the Company.  Additionally, Mr. Pevow is the acting President of the Buyer.  On February 13, 2013, the Company closed this transaction.  See Note 12, Subsequent Events.

The Company has determined that, given the consummation of the sale transaction, it has met the guidance set forth in both ASC Topic 205, “Presentation of Financial Statements” and ASC Topic 360, “Property, Plant and Equipment” to reflect the assets, liabilities and results of operations of the Sold Assets as a component of Discontinued Operations for all periods presented herein.

The Company's assets and liabilities and results of operations from discontinued operations are as follows:

		As of December 31,
		2012		2011
Accounts receivable	$	62,481	$	35,370
Prepaid expenses and other Assets		2,217		4,195
Total current assets of discontinued operations	$	64,698	$	39,565
Property and equipment, at cost	$	1,116,663	$	1,116,663
Accumulated depreciation		(109,376)		(58,574)
Total non-current assets of discontinued operations	$	1,007,287	$	1,058,089
Accounts payable	$	9,837	$	13,771
Accrued expenses		5,629		353
Total current liabilities of discontinued operations	$	15,466	$	14,124

		For the Year Ended December 31,
		2012		2011
Transportation of natural gas and liquids	$	314,434	$	297,759
Operation and Maintenance		(47,730)		(69,041)
Depreciation		(50,802)		(50,324)
Other expenses		(6,542)		-
Income from discontinued operations, net of taxes	$	209,360	$	178,394