B. FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Fair value measurements by hierarchy

	Fair value measurements at September 30, 2014
		Significant
	Quoted Prices	Other	Significant
	in Active	Observable	Unobservable
	Markets	Inputs	Inputs
	(Level 1)	(Level 2)	(Level 3)	Total
Assets:
Commodity derivatives – oil	$ -	$ 873,601	$ -	$ 873,601
Commodity derivatives – gas	-	58,575	-	58,575
Total assets	$ -	$ 932,176	$ -	$ 932,176
Liabilities:
Commodity derivatives – gas	$ -	$ 20,849	$ -	$ 20,849
Preferred stock derivative liability	-	-	-	-
Total Liabilities	$ -	$ 20,849	$ -	$ 20,849

	Fair value measurements at December 31, 2013
		Significant
	Quoted Prices	Other	Significant
	in Active	Observable	Unobservable
	Markets	Inputs	Inputs
	(Level 1)	(Level 2)	(Level 3)	Total
Assets:
Commodity derivatives – oil	$ -	$ 818,637	$ -	$ 818,637
Total assets	$ -	$ 818,637	$ -	$ 818,637
Liabilities:
Commodity derivatives – gas	$ -	$ 472,564	$ -	$ 472,564
Commodity derivatives – oil	-	423,217	-	423,217
Preferred stock derivative liability	-	-	51,290,414	51,290,414
Total Liabilities	$ -	$ 895,781	$ 51,290,414	$ 52,186,195

Fair value of assets and liabilities classified as Level 3

	Preferred Stock
	Derivative Liability
September 30, 2014	$ -
December 31, 2013	51,290,414
Total change	$ (51,290,414)