RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2015

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

Chief Executive Officer

Effective August 15, 2011, the Company entered into a Working Interest Incentive Plan (“WIIP”) with the Company’s CEO, Sam L. Banks. Under the WIIP, Mr. Banks could purchase:

●  Working interests in prospects from the Company or from unaffiliated third parties up to 2.5% of the Company’s working interest; and

●  Working interests in production acquisitions that the Company undertakes in an amount up to 2.5% (previously 5%) of the aggregate cost of the interest to be acquired.

The purchase price for any working interests acquired from the Company under the plan was no better than the terms agreed to by unaffiliated third parties.

The Board of Directors terminated the WIIP effective September 21, 2015.

Working interests acquired during fiscal years 2014 and 2013 under the WIIP are listed below (no working interests were acquired under the WIIP during fiscal year 2015):

		Working			Amount
Year	Well, prospect or project	interest			paid
2014	Anaconda Prospect (Talbot 23-1)		1.95000	%	$	16,900
2014	Gardner Island Well &		1.43600	%
	Main Pass 4 Facility		1.85500	%	$	78,988
2014	Austin Chalk (Additional W.I.)		1.00000	%	$	16,000
2013	Bell City East Prospect		.71063	%	$	5,330
2013	Austin Chalk		1.00000	%	$	9,412
2013	Addison Acquisition		2.00000	%	$	150,000

In 2006, the Company entered into participation agreements with several unrelated industry participants under which it would receive a 20% back-in interest after payout to the participants and the CEO would receive a 5% back-in interest.  The agreements were renegotiated in 2010 reducing the total back-in interest by 40% with the Company receiving 12.5% and the CEO receiving 2.5%.  The project, named La Posada, achieved multiple discrete payouts during 2013 based on differing participant cost basis and the participants assigned the agreed working interests directly to each of the Company and the CEO at time of payout.