Supplementary Financial Information on Oil and Natural Gas Exploration, Development and Production (Tables)

12 Months Ended

Dec. 31, 2012

Supplementary Financial Information On Oil And Natural Gas Exploration Development And Production Tables

Supplementary result of oil and gas operations

The Company’s oil and natural gas properties are located within the United States. The Company currently has no operations in foreign jurisdictions. Results of operations from oil and natural gas producing activities are summarized below for the years ended December 31:

	Years Ended December 31,
	2012		2011
Revenues	$	326,384	$	305,180
Costs incurred:
Dry hole costs		54,678		-
Exploration costs		266,514		559,523
Lease operating costs and production taxes		150,780		160,736
Impairment of oil and natural gas reserves		344,353		102,579
Costs incurred of asset retirement obligation		7,002		1,269
Depletion, depreciation and amortization		51,172		82,673
Totals, costs incurred		877,499		906,780
Pre-tax income (loss) from producing activities		(551,115)		(601,600	)
Results of oil and natural gas producing activities (excluding overhead, income taxes, and interest costs)	$	(551,115)	$	(601,600	)

Supplementary schedule of oil and gas properties

Costs incurred in oil and natural gas property acquisition, exploration and development activities are summarized below for the years ended December 31:

	Years ended December 31,
	2012		2011
Property acquisition and developmental costs:
Development	$	337,841	$	219,700
Undrilled leaseholds		675,058		101,259
Asset retirement obligations		7,002		1,269
Totals costs incurred	$	1,019,901	$	322,228

Supplementary schedule of oil and gas reserves

The Company’s proved oil and natural gas reserves for the years ended December 31, 2012 and December 31, 2011 are shown below:

	Years Ended December 31,
	2012		2011
Natural gas:
Proved developed and undeveloped reserves (mcf):		-		-
Beginning of year		691,100		714,780
Purchase of natural gas properties in place		-		-
Discoveries and extensions		7,900		-
Revisions		41,992		21,002
Production		(61,582)		(44,682)
Proved reserves, at end of year		679,410		691,100

	Years Ended December 31,
	2012		2011
Oil:
Proved developed and undeveloped reserves (bbl):		-		-
Beginning of year		8,040		-
Purchase (sale) of oil producing wells in place		(480)		7,053
Discoveries and extensions		10,880		-
Revisions		7,509		1,559
Production		(1,659)		(572)
Proved reserves, at end of year		24,290		8,040

	Years Ended December 31,
	2012		2011
Future cash inflows	$	5,167,850	$	5,198,500
Future costs:
Production		(1,640,960)		(2,423,560	)
Development		(184,280)		(32,890	)
Future cash flows		3,342,610		2,742,050
10% annual discount for estimated timing of cash flow		(1,597,290)		(1,384,610	)
Standardized measure of discounted cash flow	$	1,745,320	$	1,357,440

Supplementary schedule of change in measures

Changes in the standardized measure of future net cash flows relating to proved oil and natural gas reserves for the years ended December 31 is summarized below: 

	2012			2011
Increase (decrease)
Sale of gas and oil, net of operating expenses	$	(175,604	)	$	144,444
Purchase of oil and gas properties in place		-			-
Discoveries, extensions and improved recovery, net of future production and development costs		244,134			-
Accretion of discount		319,350			231,916
Net change in sales prices, net of production costs		-			-
Net increase (decrease)		387,880			376,360
Standardized measure of discounted future cash flows:
Beginning of the year		1,357,440			981,080
Before Income Taxes		1,745,320			1,357,440
Income Taxes		(601,133	)		(461,530	)
End of the year	$	1,144,187		$	895,910