0001144204-15-031599.txt : 20150515 0001144204-15-031599.hdr.sgml : 20150515 20150515161206 ACCESSION NUMBER: 0001144204-15-031599 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 20150331 FILED AS OF DATE: 20150515 DATE AS OF CHANGE: 20150515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EnerJex Resources, Inc. CENTRAL INDEX KEY: 0000008504 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 880422242 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-36492 FILM NUMBER: 15869510 BUSINESS ADDRESS: STREET 1: 4040 BROADWAY, SUITE 508 CITY: SAN ANTONIO STATE: TX ZIP: 78209 BUSINESS PHONE: 210-451-5545 MAIL ADDRESS: STREET 1: 4040 BROADWAY, SUITE 508 CITY: SAN ANTONIO STATE: TX ZIP: 78209 FORMER COMPANY: FORMER CONFORMED NAME: MILLENNIUM PLASTICS CORP DATE OF NAME CHANGE: 20000525 FORMER COMPANY: FORMER CONFORMED NAME: AURORA CORP DATE OF NAME CHANGE: 19990825 10-Q 1 v409265_10q.htm 10-Q

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 10-Q

 

þ       QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2015

 

¨       TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission file number 000-30234

 

 

ENERJEX RESOURCES, INC.

(Exact name of registrant as specified in its charter)

 

Nevada   88-0422242

(State or other jurisdiction of incorporation or

organization)

  (I.R.S. Employer Identification No.)
     
4040 Broadway    
Suite 508    
San Antonio, Texas   78209
(Address of principal executive offices)   (Zip Code)

 

(210) 451-5545
(Registrant's telephone number, including area code)

 

 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes þ        No ¨

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes þ        No ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer  ¨ Accelerated filer  ¨
   
Non-accelerated filer  ¨ (Do not check if a smaller reporting company)     Smaller reporting company x

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨      No   þ

 

The number of shares of Common Stock, $0.001 par value, outstanding on May 15, 2015 was 8,406,661 shares.

  

 
 

 

ENERJEX RESOURCES, INC.

FORM 10-Q

TABLE OF CONTENTS

 

    Page
PART I     FINANCIAL STATEMENTS  
ITEM 1. FINANCIAL STATEMENTS 2
  Condensed Consolidated Balance Sheets at March 31, 2015 and December 31, 2014 (Unaudited) 2
  Condensed Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014 (Unaudited) 3
  Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2015 and 2014 (Unaudited) 4
  Notes to Condensed Consolidated Financial Statements 5
  FORWARD-LOOKING STATEMENTS 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 11
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 17
ITEM 4. CONTROLS AND PROCEDURES 17
     
PART II    OTHER INFORMATION  
ITEM 1. LEGAL PROCEEDINGS 18
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 18
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 18
ITEM 4. MINE SAFETY DISCLOSURES 18
ITEM 5. OTHER INFORMATION 19
ITEM 6. EXHIBITS 19
     
SIGNATURES 21

 

i
 

 

PART 1 – FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

EnerJex Resources, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

 

    March 31,     December 31,  
    2015     2014  
Assets                
Current assets:                
Cash   $ 2,933,562     $ 805,524  
Accounts receivable     959,653       1,278,509  
Inventory     222,929       248,218  
Derivative receivable     3,952,092       3,736,005  
Marketable securities     1,018,573       1,018,573  
Deposits and prepaid expenses     722,187       324,339  
Total current assets     9,808,996       7,411,168  
                 
Non-current assets:                
Fixed assets, net of accumulated depreciation of $2,005,467 and $1,945,607     2,335,805       2,404,703  
Oil and gas properties using full-cost accounting, net of accumulated DD&A of $14,501,249 and $13,827,347     47,300,714       64,263,272  
Derivative receivable     615,102       985,746  
Other non-current assets     941,650       993,207  
     Total  non-current assets     51,193,271       68,646,928  
Total assets   $ 61,002,267     $ 76,058,096  
                 
Liabilities and Stockholders' Equity                
Current liabilities:                
Accounts payable   $ 2,027,686     $ 3,042,835  
Accrued liabilities     1,494,740       1,096,521  
Total current liabilities     3,522,426       4,139,356  
                 
Asset retirement obligation     2,974,833       2,906,093  
Long-term debt     23,504,928       23,011,660  
Total non-current liabilities     26,479,761       25,917,753  
Total liabilities     30,002,187       30,057,109  
Commitments & Contingencies                
Stockholders' Equity:                
10% Series A Cumulative Redeemable Perpetual Preferred Stock, $.001 par value, 25,000,000 shares authorized; 751,815 shares issued and outstanding at March 31, 2015 and December 31, 2014     752       752  
Series B Convertible Preferred Stock, $.001 par value, 1,764 share authorized, issued and outstanding at March 31, 2015     2        
Common stock, $0.001 par value, 250,000,000  shares authorized; shares issued and outstanding 8,406,661 at March 31, 2015 and 7,643,114 at December 31, 2014     8,407       7,643  
Paid-in capital     66,648,974       63,825,998  
Accumulated other comprehensive income     (552,589 )     (552,589 )
Retained (deficit)     (35,105,466 )     (17,280,817 )
Total stockholders' equity     31,000,080       46,000,987  
                 
Total liabilities and stockholders' equity   $ 61,002,267     $ 76,058,096  

   

See Notes to Condensed Consolidated Financial Statements.

 

2
 

 

EnerJex Resources, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

 

    For the Three Months Ended  
    March 31,  
    2015     2014  
             
Revenues:                
Oil revenues   $ 1,380,646     $ 3,612,579  
Natural gas revenues     117,195       242,398  
Total revenues     1,497,841       3,854,977  
                 
Expenses:                
Direct operating costs     1,267,301       1,531,907  
Depreciation, depletion and  amortization     745,608       763,758  
Impairment of oil and gas properties     16,401,376       -  
Professional fees     253,729       224,902  
Salaries     521,287       310,348  
Administrative expense     230,740       141,029  
Total expenses     19,420,041       2,971,944  
Income (loss) from operations     (17,922,200 )     883,033  
                 
Other income (expense):                
Interest expense     (309,496 )     (378,928 )
Derivative losses     (217,522 )     (404,353 )
Other income     1,094,657       3,882  
Total other income (expense)     567,639       (779,399 )
Net income (loss)   $ (17,354,561 )   $ 103,634  
                 
Net income (loss)     (17,354,561 )     103,634  
Preferred dividends     (407,088 )     (399,447 )
Net income (loss) attributable to common stockholders   $ (17,761,649 )   $ (295,813 )
Net income (loss) per share basic and diluted   $ (2.28 )   $ (0.04 )
                 
Weighted average shares     7,795,823       7,293,877  

    

See Notes to Condensed Consolidated Financial Statements.

 

3
 

 

EnerJex Resources, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

   

    For the Three Months Ended  
    March 31,  
    2015     2014  
Cash flows  from operating activities                
Net income (loss)   $ (17,354,561 )   $ 103,634  
Depreciation, depletion and amortization     745,608       763,758  
Impairment of oil and gas properties     16,401,376       -  
Shares based payments issued for services     109,527       258,498  
Accretion of asset retirement obligation     70,984       63,695  
Loss on derivatives     154,557       69,289  
Settlement of asset retirement obligation     (2,244 )     (4,996 )
Changes in assets and liabilities:                
Accounts receivable     318,856       (99,299 )
Inventory     25,289       3,551  
Deposits and prepaid expenses     (397,848 )     (356,275 )
Accounts payable     (1,015,149 )     81,308  
Accrued liabilities     398,219       (949,011 )
Cash flows from operating activities     (545,386 )     (65,848 )
                 
Cash flows  from investing activities                
                 
Purchase of fixed assets     (2,809 )     (80,143 )
Additions to oil and gas properties     (112,719 )     (1,234,890 )
Sales of oil and gas properties     -       987,521  
Proceeds from sale of fixed assets     -       -  
Cash flows from investing activities     (115,528 )     (327,512 )
                 
Cash flows  from financing activities                
Proceeds from sale of common and preferred stock     2,714,215       -  
Proceeds from borrowings     500,000       500,000  
    Dividends paid on preferred stock     (470,088 )     -  
    Repayment of  long-term debt     (6,732 )     (9,096 )
Deferred financing costs     51,557       30,902  
Cash flows from financing activities     2,788,952       521,806  
                 
Net increase in cash     2,128,038       128,446  
Cash – beginning     805,524       1,308,196  
Cash – ending   $ 2,933,562     $ 1,436,642  
                 
Supplemental disclosures:                
Interest paid   $ 197,046     $ 74,499  
Income taxes paid   $ -     $ -  
                 
Non-cash transactions:                
Share based payments issued for services   $ 109,527     $ 258,498  

 

See Notes to Condensed Consolidated Financial Statements.

 

4
 

 

EnerJex Resources, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

 

Note 1 – Basis of Presentation

 

The unaudited condensed consolidated financial statements of EnerJex Resources, Inc. (“we”, “us”, “our” and “Company”) have been prepared in accordance with United States generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and reflect all adjustments which, in the opinion of management, are necessary for a fair presentation.  All such adjustments are of a normal recurring nature.  The results of operations for the interim period are not necessarily indicative of the results to be expected for a full year.  Certain amounts in the prior year statements have been reclassified to conform to the current year presentations.  The statements should be read in conjunction with the financial statements and footnotes thereto included in our Annual Report Form 10-K for the fiscal year ended December 31, 2014.

  

Our consolidated financial statements include the accounts of our wholly-owned subsidiaries, EnerJex Kansas, Inc., Black Sable Energy, LLC, Working Interest, LLC, and Black Raven Energy, Inc. (“Black Raven”) for the quarter ended March 31, 2015 and for the year ended December 31, 2014. All intercompany transactions and accounts have been eliminated in consolidation.

 

Note 2 - Stock Options

 

A summary of stock options is as follows:

 

    Options     Weighted
Avg.
Exercise
Price
    Warrants     Weighted
Avg.
Exercise
Price
 
Outstanding December 31, 2014     231,332     $ 9.33       -     $ -  
Granted     67,332       9.85       -       -  
Cancelled     -       -       -       -  
Exercised     -       -       -       -  
Outstanding March 31, 2015     298,664     $ 9.45       -     $ -  

 

Note 3 – Fair Value Measurements

 

We hold certain financial assets which are required to be measured at fair value on a recurring basis in accordance with the Statement of Financial Accounting Standard No. 157, "Fair Value Measurements" ("ASC Topic 820-10"). ASC Topic 820-10 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). ASC Topic 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability. The three levels of the fair value hierarchy under ASC Topic 820-10 are described below:

 

Level 1. Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access. 

 

Level 2. Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. We consider the derivative liability to be Level 2. We determine the fair value of the derivative liability utilizing various inputs, including NYMEX price quotations and contract terms.

 

Level 3. Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. We consider our marketable securities to be Level 3.

 

5
 

 

Our derivative instruments consist of fixed price commodity swaps.

 

   Fair Value Measurement 
   Level 1   Level 2   Level 3 
Crude oil contracts  $-   $4,194,738   $- 
Marketable Securities  $-   $-   $1,018,573 

 

Note 4 - Asset Retirement Obligation

 

Our asset retirement obligations relate to the liabilities associated with the abandonment of oil wells. The amounts recognized are based on numerous estimates and assumptions, including future retirement costs, inflation rates and credit adjusted risk-free interest rates. The following shows the changes in asset retirement obligations:

 

Asset retirement obligations, December 31, 2014   $ 2,906,093  
Liabilities incurred during the period     -  
Accretion     70,984  
Liabilities settled during the quarter     (2,244 )
Asset retirement obligations, March 31, 2015   $ 2,974,833  

  

Note 5 - Derivative Instruments

 

We have entered into certain derivative or physical arrangements with respect to portions of our crude oil production to reduce our sensitivity to volatile commodity prices and/or to meet hedging requirements under our Credit Facility. We believe that these derivative arrangements, although not free of risk, allow us to achieve a more predictable cash flow and to reduce exposure to commodity price fluctuations. However, derivative arrangements limit the benefit of increases in the prices of crude oil. Moreover, our derivative arrangements apply only to a portion of our production.

 

We have an Intercreditor Agreement in place between the Company; our counterparties, BP Corporation North America, Inc. ("BP") and Cargill Incorporated (“Cargill”) and our agent Texas Capital Bank, N.A., which allows Texas Capital Bank to also act as agent for the counterparties for the purpose of holding and enforcing any liens or security interests resulting from our derivative arrangements. Therefore, we are not required to post additional collateral, including cash.

 

The following derivative contracts were in place at March 31, 2015:

 

   Term  Monthly Volumes  Price/Bbl   Fair Value 
Deferred premium put  1/16-6/16  9,000 Bbls  $85.00    1,256,288 
Crude oil swap  1/15-12/15  5,800 Bbls  $88.55    1,879,490 
Crude oil swap  7/11-12/15  3,000 Bbls  $83.70    841,200 
Crude oil swap  7/12-12/15  1,000 Bbls  $76.74    217,760 
              $4,194,738 

 

Monthly volume is the weighted average throughout the period.

 

The total fair value is shown as a derivative instrument in both current and non-current assets on the balance sheet. 

 

6
 

 

Note 6 - Long-Term Debt

 

Senior Secured Credit Facility

 

 On October 3, 2011, the Company and DD Energy, Inc., EnerJex Kansas, Inc., Black Sable Energy, LLC and Working Interest, LLC ("Borrowers") entered into an Amended and Restated Credit Agreement with Texas Capital Bank, N.A. (the “Bank”) and other financial institutions and banks that may become a party to the Credit Agreement from time to time. The facilities provided under the Amended and Restated Credit Agreement were to be used to refinance Borrowers prior outstanding revolving loan facility with Bank, dated July 3, 2008, and for working capital and general corporate purposes. 

 

At our option, loans under the facility will bear stated interest based on the Base Rate plus Base Rate Margin, or Floating Rate plus Floating Rate Margin (as those terms are defined in the Credit Agreement). The Base Rate will be, for any day, a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 0.50% and (b) the Bank's prime rate. The Floating Rate shall mean, at Borrower's option, a per annum interest rate equal to (i) the Eurodollar Rate plus Eurodollar Margin, or (ii) the Base Rate plus Base Rate Margin (as those terms are defined in the Amended and Restated Credit Agreement). Eurodollar borrowings may be for one, two, three, or six months, as selected by the Borrowers. The margins for all loans are based on a pricing grid ranging from 0.00% to 0.75% for the Base Rate Margin and 2.25% to 3.00% for the Floating Rate Margin based on the Company's Borrowing Base Utilization Percentage (as defined in the Amended and Restated Credit Agreement). 

 

On December 15, 2011, we entered into a First Amendment to Amended and Restated Credit Agreement and Second Amended and Restated Promissory Note in the amount of $50,000,000 with the Bank. The Amendment reflected the addition of Rantoul Partners as an additional Borrower and added as additional security for the loans the assets held by Rantoul Partners. 

 

On August 31, 2012, we entered into a Second Amendment to Amended and Restated Credit Agreement with the Bank. The Second Amendment: (i) increased our borrowing base to $7,000,000, (ii) reduced the minimum interest rate to 3.75%, and (iii) added additional new leases as collateral for the loan. 

 

On November 2, 2012, we entered into a Third Amendment to Amended and Restated Credit Agreement with the Bank. The Third Amendment (i) increased our borrowing base to $12,150,000, and (ii) clarified certain continuing covenants and provided a limited waiver of compliance with one of the covenants so clarified for the quarter ended December 31, 2011. 

 

On January 24, 2013, we entered into a Fourth Amendment to Amended and Restated Credit Agreement, which was made effective as of December 31, 2012 with the Bank.  The Fourth Amendment reflects the following changes: (i) the Bank consented to the restructuring transactions related to the dissolution of Rantoul Partners, and (ii) the Bank terminated a Limited Guaranty, as defined in the Credit Agreement, executed by Rantoul Partners in favor of the Bank. 

 

On April 16, 2013, the Bank increased our borrowing base to $19.5 million. 

 

On September 30, 2013, we entered into a Fifth Amendment to the Amended and Restated Credit Agreement.  The Fifth Amendment reflects the following changes:  (i) expanded principal commitment amount of the Bank to $100,000,000, (ii) increased the Borrowing Base to $38,000,000, (iii) added Black Raven Energy, Inc. to the Credit Agreement as a borrower party, (iv) added certain collateral and security interests in favor of the Bank, and (v) reduced the Company’s current interest rate to 3.30%.   

 

On November 19, 2013, we entered into a Sixth Amendment to the Amended and Restated Credit Agreement. The Sixth Amendment reflects the following changes: (i) added Iberia Bank as a participant into our credit facility, and (ii) a technical correction to our covenant calculations.

 

On May 22, 2014, we entered into a Seventh Amendment to the Amended and Restated Credit Agreement. The Seventh Amendment reflects the Bank’s consent to our issuance of up to 850,000 shares of our 10% Series A Cumulative Redeemable Perpetual Preferred Stock.

 

On August 15, 2014, we entered into an Eighth Amendment to the Amended and Restated Credit Agreement. The Eighth Amendment reflects the following changes: (i) the borrowing base was increased from $38 million to $40 million, and (ii) the maturity of the facility was extended by three years to October 3, 2018.

 

Our borrowing base at March 31, 2015 and December 31, 2014 was $40 million, of which we had borrowed $23.5 million and $23 million respectively. For the three month period ended March 31, 2015 and for the year ended December 31, 2014 the interest rate was 3.3%. This facility expires on October 3, 2018. 

  

Other Long Term Debt

 

We financed the purchase of vehicles through a bank.  The notes are for four years and the vehicles collateralize these notes. The long term balance on the notes at March 31, 2015 was $4,928.  

 

7
 

 

Note 7 – Commitments & Contingencies

 

As of March 31, 2015, the Company has an outstanding irrevocable letter of credit in the amount of $50,000 issued in favor of the Texas Railroad Commission. The letter of credit is required by the Texas Railroad Commission for all companies operating in the state of Texas with production greater than limits they prescribe.

 

Rent expense for the three months ended March 31, 2015 and 2014 was approximately $43,000 and $51,000 respectively. Future non-cancellable minimum lease payments are approximately $120,000 for the remainder of 2015, $147,000 for 2016, $145,000 for 2017, $91,000 for 2018 and $77,000 for 2019. 

 

Note 8 - Equity Transactions

 

On January 15, 2015, 67,332 options were issued to employees and directors.

  

On March 13, 2015 the Company issued in a registered offering 763,547 registered shares of its common stock together with 1,242.17099 shares of its newly designated Series B Convertible Preferred Stock (the "Preferred Stock") convertible into 709,812 shares of common stock. We also issued in an unregistered offering, 521.62076 shares of Preferred Stock convertible into 298,069 shares of common stock, and warrants to purchase 1,771,428 shares of its common stock. The shareholder’s ability to convert a portion of the Preferred Stock and to exercise the warrant are restricted: (i) prior to the Company obtaining approval of the offering by its shareholders, which we expect to obtain before May 31, 2015, and (ii) pursuant to customary “blocker” provisions restricting the investor’s ownership to 9.99% of our outstanding common stock.

 

The Preferred Stock has a liquidation preference of $1,000 per share, and will be convertible at the option of the shareholder at a conversion ratio equal to approximately 571 shares of common stock for each one (1) share of Preferred Stock, subject to customary adjustments and anti-dilution price protection. Dividends are payable on the shares of Preferred Stock only if and to the extent that dividends are payable on the common stock into which the Preferred Stock is convertible. The Preferred Stock has no maturity date and can be redeemed by the Company beginning twelve months after the closing of the offering or upon a change of control. Each warrant will be exercisable for one share of common stock, for a period of five years beginning six months after March 13, 2015, at a cash exercise price of $2.75 per share, and may be exercised on a cashless basis after that six-month period if no effective registration statement covers the warrant shares by that time.

 

Note 9 – Impairment of Oil and Gas Properties

 

Pursuant to full cost accounting rules, the Company must perform a ceiling test each quarter on its proved oil and natural gas assets within each separate cost center. All of the Company’s costs are included in one cost center because all of the Company’s operations are located in the United States. The Company’s ceiling test was calculated using trailing twelve-month, unweighted-average first-day-of-the-month prices for oil and natural gas as of March 31, 2015, which were based on a West Texas Intermediate oil price of $78.82 per Bbl and a Henry Hub natural gas price of $3.74 per MMBtu (adjusted for basis and quality differentials), respectively. Utilizing these prices, the calculated ceiling amount was less than the net capitalized cost of oil and natural gas properties as of March 31, 2015, and as a result, a pre-tax write-down of $16.4 million was recorded at March 31, 2015. Additional material write-downs of the Company’s oil and gas properties could occur in subsequent quarters in the event that oil and natural gas prices remain at current levels, or if the Company experiences significant downward adjustments to its estimated proved reserves.

 

We follow the full-cost method of accounting under which all costs associated with property acquisition, exploration and development activities are capitalized. We also capitalize internal costs that can be directly identified with our acquisition, exploration and development activities and do not include costs related to production, general corporate overhead or similar activities. 

 

Proved properties are amortized using the units of production method (UOP). Currently we only have operations in the Unites States of America. The UOP calculation multiplies the percentage of estimated proved reserves produced each quarter by the cost of these reserves. The amortization base in the UOP calculation includes the sum of proved property, net of accumulated depreciation, depletion and amortization (DD&A), estimated future development costs (future costs to access and develop proved reserves) and asset retirement costs, less related salvage value. 

 

8
 

 

The cost of unproved properties are excluded from the amortization calculation until it is determined whether or not proved reserves can be assigned to such properties or until development projects are placed into service. Geological and geophysical costs not associated with specific properties are recorded as proved property immediately. Unproved properties are reviewed for impairment quarterly. 

 

Under the full cost method of accounting, the net book value of oil and gas properties, less deferred income taxes, may not exceed a calculated “ceiling.” The ceiling limitation is (a) the present value of future net revenues computed by applying current prices of oil & gas reserves (with consideration of price changes only to the extent provided by contractual arrangements) to estimated future production of proved oil & gas reserves as of the date of the latest balance sheet presented, less estimated future expenditures (based on current costs) to be incurred in developing and producing the proved reserves computed using a discount factor of 10 percent and assuming continuation of existing economic conditions plus (b) the cost of properties not being amortized plus (c) the lower of cost or estimated fair value of unproven properties included in the costs being amortized less (d) income tax effects related to differences between book and tax basis of properties. Future cash outflows associated with settling accrued retirement obligations are excluded from the calculation. Estimated future cash flows are calculated using end-of-period costs and an unweighted arithmetic average of commodity prices in effect on the first day of each of the previous 12 months held flat for the life of the production, except where prices are defined by contractual arrangements.

 

Note 10 - Subsequent Events

 

We have reviewed all material events through the date of this report in accordance with ASC 855-10.

 

On April 15, 2015, The Company announced that Oakridge Energy, Inc. (“Oakridge”) completed the sale of its La Plata County, Colorado real estate at a sales price that is expected to generate for EnerJex a cash distribution of approximately $1.75 million. Oakridge announced plans to distribute the after-tax net proceeds from the sale, within the next 60 to 90 days, to its shareholders of record as of April 9, 2015. As of the record date for that distribution, EnerJex owned approximately 15.9% of Oakridge's issued and outstanding shares.

 

On April 28, 2015, the Company entered into six deferred premium put contracts with BP Energy Company for the six month period ending December 31, 2016. Each contract entitles the Company to sell 5,000 barrels of crude oil at $60.00. A premium of $5.72 per barrel will be paid by the Company at the expiration or settlement of the contract.

 

On April 29, 2015, the Borrowers entered into a Ninth Amendment to Amended and Restated Credit Agreement (the "Ninth Amendment") with the Banks. In the Ninth Amendment, the Banks (i) reduced the borrowing base from $40 million to $22.6 million, (ii) imposed affirmative obligations on the Borrowers to use a portion of proceeds received with regard to future sales of securities, or distributions received with regard to securities held, to repay the loan, (iii) consented to non-compliance by Borrowers with certain terms of the Credit Agreement, (iv) waived certain provisions of the Credit Agreement, and (v) agreed to certain other amendments to the Credit Agreement.

 

On May 1, 2015, the Borrowers and the Banks entered into a Letter Agreement (the “Letter Agreement”) to clarify that up to $1,000,000 in proceeds from any potential future securities offering will be unencumbered by the Banks’ Liens as described in the Credit Agreement through November 1, 2015, and that, until November 1, 2015, such proceeds shall not be subject to certain provisions in the Credit Agreement prohibiting the Company from declaring and paying dividends that may be due and payable to holders of securities issued in such potential offerings or issued prior to the Letter Agreement.

 

On May 13, 2015 the Company sold 183,433 shares of its 10% Series A Cumulative Redeemable Perpetual Preferred Stock at $12.50 per share for gross proceeds of approximately $2.3 million. The Company intends to use the net proceeds of this offering for general corporate purposes, including capital expenditures, working capital, preferred stock dividends, and repayment of outstanding borrowings under its senior credit facility.

 

The offering was made pursuant to a registration statement on Form S-3 (File No. 333-199030) previously filed and declared effective by the U.S. Securities and Exchange Commission (SEC). 

 

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FORWARD-LOOKING STATEMENTS

 

This report contains forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control. All statements, other than statements of historical fact, contained in this report, including statements regarding future events, our future financial performance, business strategy and plans and objectives of management for future operations, are forward-looking statements. We have attempted to identify forward-looking statements by terminology including "anticipates," "believes," "can," "continue," "could," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," or "should" or the negative of these terms or other comparable terminology. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks outlined under "Risk Factors" or elsewhere in this report, which may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time and it is not possible for us to predict all risk factors, nor can we address the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause our actual results to differ materially from those contained in any forward-looking statements. The factors impacting these risks and uncertainties include, but are not limited to:

 

  · inability to attract and obtain additional development capital;
  · inability to achieve sufficient future sales levels or other operating results;
  · inability to efficiently manage our operations;
  · effect of our hedging strategies on our results of operations;
  · potential default under our secured obligations or material debt agreements;
  · estimated quantities and quality of oil reserves;
  · declining local, national and worldwide economic conditions;
  · fluctuations in the price of oil;
  · continued weather conditions that impact our abilities to efficiently manage our drilling and development activities;
  · the inability of management to effectively implement our strategies and business plans;
  · approval of certain parts of our operations by state regulators;
  · inability to hire or retain sufficient qualified operating field personnel;
  · increases in interest rates or our cost of borrowing;
  · deterioration in general or regional economic conditions;
  · adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;
  · the occurrence of natural disasters, unforeseen weather conditions, or other events or circumstances that could impact our operations or could impact the operations of companies or contractors we depend upon in our operations;
  · inability to acquire mineral leases at a favorable economic value that will allow us to expand our development efforts;
  · adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations; and
  · changes in U.S. GAAP or in the legal, regulatory and legislative environments in the markets in which we operate.

 

   You should not place undue reliance on any forward-looking statement, each of which applies only as of the date of this report. Except as required by law, we undertake no obligation to update or revise publicly any of the forward-looking statements after the date of this report to conform our statements to actual results or changed expectations. For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see "Risk Factors" in this document and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

 

All references in this report to "we," "us," "our," "company" and "EnerJex" refer to EnerJex Resources, Inc. and our wholly-owned operating subsidiaries, EnerJex Kansas, Inc., Black Sable Energy, LLC, Working Interest, LLC, and Black Raven Energy, Inc. unless the context requires otherwise. We report our financial information on the basis of a December 31st fiscal year end.

 

AVAILABLE INFORMATION

  

We file annual, quarterly and other reports and other information with the SEC.  You can read these SEC filings and reports over the Internet at the SEC's website at www.sec.gov or on our website at www.enerjex.com.  You can also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, NE, Washington, DC 20549 on official business days between the hours of 10:00 am and 3:00 pm.  Please call the SEC at (800) SEC-0330 for further information on the operations of the public reference facilities. We will provide a copy of our annual report to security holders, including audited financial statements, at no charge upon receipt to of a written request to us at EnerJex Resources, Inc., 4040 Broadway, Suite 508, San Antonio, Texas 78209.

 

10
 

 

INDUSTRY AND MARKET DATA

 

The market data and certain other statistical information used throughout this report are based on independent industry publications, government publications, reports by market research firms or other published independent sources. In addition, some data are based on our good faith estimates.

 

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes to our financial statements included elsewhere in this report. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under ITEM 1A. Risk Factors and elsewhere in this report.

 

Overview

 

Our principal strategy is to acquire, develop, explore and produce domestic onshore oil and natural gas properties. Our business activities are currently focused in Kansas, Colorado, Nebraska and Texas.

 

We continue to investigate multiple opportunities to both unlock value and accelerate growth in an accretive manner on behalf of shareholders, including but not limited to mergers, acquisitions, joint ventures, and non-dilutive financings. There can be no assurance of the results or timing associated with this process.

 

Recent Developments

 

The following is a brief description of our most significant corporate developments that have occurred since the end of 2014:

 

·On March 13, 2015 the Company issued in a registered offering 763,547 registered shares of its common stock together with 1,242.17099 shares of its newly designated Series B Convertible Preferred Stock (the "Preferred Stock") convertible into 709,812 shares of common stock. We also issued in an unregistered offering, 521.62076 shares of Preferred Stock convertible into 298,069 shares of common stock, and warrants to purchase 1,771,428 shares of its common stock. The shareholder’s ability to convert a portion of the Preferred Stock and to exercise the warrant are restricted: (i) prior to the Company obtaining approval of the offering by its shareholders, which we expect to obtain before May 31, 2015, and (ii) pursuant to customary “blocker” provisions restricting the investor’s ownership to 9.99% of our outstanding common stock.

 

The Preferred Stock has a liquidation preference of $1,000 per share, and will be convertible at the option of the shareholder at a conversion ratio equal to approximately 571 shares of common stock for each one (1) share of Preferred Stock, subject to customary adjustments and anti-dilution price protection. Dividends are payable on the shares of Preferred Stock only if and to the extent that dividends are payable on the common stock into which the Preferred Stock is convertible. The Preferred Stock has no maturity date and can be redeemed by the Company beginning twelve months after the closing of the offering or upon a change of control. Each warrant will be exercisable for one share of common stock, for a period of five years beginning six months after March 13, 2015, at a cash exercise price of $2.75 per share, and may be exercised on a cashless basis after that six-month period if no effective registration statement covers the warrant shares by that time.

 

  ·

On April 28, 2015, the Company entered into six deferred premium put contracts with BP Energy Company for the six month period ending December 31, 2016. Each contract entitles the Company to sell 5,000 barrels of crude oil at $60.00. A premium of $5.72 per barrel will be paid by the Company at the expiration or settlement of the contract.

 

  · On April 29, 2015, the Borrowers entered into a Ninth Amendment to Amended and Restated Credit Agreement (the "Ninth Amendment") with the Banks.  In the Ninth Amendment, the Banks (i) reduced the borrowing base from $40 million to $22.6 million , (ii) imposed affirmative obligations on the Borrowers to use a portion of proceeds received with regard to future sales of securities, or distributions received with regard to securities held, to repay the loan, (iii) consented to non-compliance by Borrowers with certain terms of the Credit Agreement, (iv) waived certain provisions of the Credit Agreement, and (v) agreed to certain other amendments to the Credit Agreement.

 

  · On May 13, 2015 the Company sold 183,433 shares of its 10% Series A Cumulative Redeemable Perpetual Preferred Stock at $12.50 per share for gross proceeds of approximately $2.3 million.  The Company intends to use the net proceeds of this offering for general corporate purposes, including capital expenditures, working capital, preferred stock dividends, and repayment of outstanding borrowings under its senior credit facility.

 

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Net Production, Average Sales Price and Average Production and Lifting Costs

 

The table below sets forth our net oil production (net of all royalties, overriding royalties and production due to others), the average sales prices, average production costs and direct lifting costs per unit of production for the periods ending March 31, 2015 and March 31, 2014.

  

   For the Three Months Ended 
   March 31, 
   2015   2014 
         
Net Production          
Oil (Bbl)   33,095    39,665 
Natural gas (Mcf)   64,301    57,141 
           
Average Sales Prices          
Oil (per Bbl)  $41.72   $91.08 
Natural gas (Mcf)  $1.82   $4.24 
           
Average Production Cost (1)          
Per Barrel of Oil Equivalent (“Boe”)  $45.94   $46.67 
           
Average Lifting Costs (2)          
Per Boe  $28.93   $31.14 

 

(1) Production costs include all operating expenses, transportation expenses, depreciation, depletion and amortization, lease operating expenses and all associated taxes. Impairment of oil properties is not included in production costs.

 

(2) Direct lifting costs do not include impairment expense or depreciation, depletion and amortization.

 

Results of Operations for the Three Months Ended March 31, 2015 and 2014 compared.

 

Income:

  

   Three Months Ended   Increase / 
   March 31,   (Decrease) 
   2015   2014     
Oil revenues  $1,380,646   $3,612,579   $(2,231,933)
Natural gas revenues   117,195    242,398    (125,203)

 

Oil Revenues

  

Oil revenues for the three months ended March 31, 2015 were $1,380,646 compared to oil revenues of $3,612,579 for the three months ended March 31, 2014. Oil revenues decreased due to a $49.36 decrease in realized prices or approximately 54% to $41.72 for the quarter ended March 31, 2015 versus $91.08 for the quarter ended March 31, 2014. In addition to the decrease in realized prices, production decreased by approximately 6,600 bbls for the quarter ended March 31, 2015 compared to the quarter ended March 31, 2014.

 

Natural Gas Revenues

 

Natural gas revenues for the three months ended March 31, 2015 were $117,195 compared to natural gas revenues of $242,398 for the three months ended March 31, 2014. Natural gas revenues decreased due to a significant decrease in realized prices of 57% or $2.42 to $1.82 for the quarter ended March 31, 2015 compared to $4.24 for the quarter ended March 31, 2014. The decrease in realized prices was slightly offset by an increase in production.

 

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Expenses:

 

    Three Months Ended     Increase /  
    March 31,     (Decrease)  
    2015     2014        
Production expenses:                        
Direct operating costs   $ 1,267,301     $ 1,531,907     $ (264,606 )
Depreciation, depletion and amortization     745,608       763,758       (18,150 )
    Impairment of oil and gas properties     16,401,376       -       16,401,376  
Total production expenses     18,414,285       2,295,665       16,118,620  
                         
General expenses:                        
Professional fees     253,729       224,902       28,827  
Salaries     521,287       310,348       210,939  
Administrative expense     230,740       141,029       89,711  
Total general expenses     1,005,756       676,279       329,477  
Total production and general expenses     19,420,041       2,971,944       16,448,097  
                         
Income (loss) from operations     (17,922,200 )     883,033       (18,805,233 )
                         
Other income (expense)                        
Interest expense     (309,496 )     (378,928 )     69,432  
Derivative losses     (217,522 )     (404,353 )     186,831  
Other income     1,094,657       3,882       1,090,775  
Total other income (expense)     567,639       (779,399 )     1,347,038  
                         
Net income (loss)   $ (17,354,561 )   $ 103,634     $ (17,458,195 )

  

Direct Operating Costs

 

Direct operating costs primarily include direct labor and equipment costs related to pumping, gauging, pulling, well repairs, compression, transportation costs, and general maintenance requirements in our oil and gas fields. These costs also include certain contract labor costs, and other non-capitalized expenses. Direct operating costs for the three months ended March 31, 2015 decreased 17% to $1,267,301 from $1,531,907 for the three months ended March 31, 2014. Direct operating costs per Boe decreased 7.1% to $28.93 from $31.14. The $264,606 decrease in direct operating costs is due primarily to reduced lease operating expenses resulting from cost reductions that were implemented in response to the decline in commodity prices. 

 

Depreciation, Depletion and Amortization

  

Depreciation, depletion and amortization for the three months ended March 31, 2015 was $745,608 compared to $763,758 for the three months ended March 31, 2014. The decrease in depletion expense is due primarily to a decrease in oil production which was slightly offset by an increase in natural gas production during the first quarter of 2015 compared to the first quarter of 2014. Depletion expense per Boe decreased $1.48 or 9.5% in the first quarter of 2015 compared to the first quarter of 2014.  

 

Impairment of oil and gas properties

 

Impairment of oil and gas properties was $16,401,376 for the quarter ended March 31, 2015. The impairment was due the dramatic decrease in commodity pricing as noted above.

 

Professional Fees

 

Professional fees for the three months ended March 31, 2015 were $253,729 compared to $224,902 for the three months ended March 31, 2014. The increase in professional fees is due primarily to increased fees paid to our external reserve engineer, attorneys and financial advisors.

 

Salaries

 

Salaries for the three months ended March 31, 2015 were $521,287 compared to $310,348 for the three months ended March 31, 2014.  Salaries increased $210,939 due primarily to new hires of technical personnel during the 3rd quarter of 2014 and raises to specialty and technical positions within the company. The Company increased its technical capabilities in 2014 to support forecasted growth and the pursuit of strategic opportunities.

 

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Administrative Expenses

  

Administrative expenses for the three months ended March 31, 2015 were $230,740 compared to $141,029 for the three months ended March 31, 2014. The increase in administrative expenses is due primarily to a reduction in reimbursements from working interest partners and increased SEC filing fees.

 

Interest Expense

  

Interest expense, which includes amortization of deferred financing costs and accretion, for the three months ended March 31, 2015 was $309,496 compared to $378,928 for the three months ended March 31, 2014. Interest expense and amortization of deferred financing costs decreased as a result of decreased borrowings under our Credit Facility.  

 

Derivative Losses

 

We incurred an unrealized loss of $217,522 on our derivative contracts in the first quarter of 2015 compared to a loss of $404,353 for the three months ended March 31, 2014. The increase in the loss was due primarily to the completion of contracts.

 

Net Income (Loss)

 

Net loss for the three months ended March 31, 2015 was ($17,354,561) compared to a net income of $103,634 for the three months ended March 31, 2014.  The net loss during the first quarter of 2015 compared to the prior year period was primarily a result of the $16,401,376 impairment of oil and gas properties as well as decreased revenues related to the decrease in realized sales prices. The decreases were partially offset by realized derivative gains.

 

Liquidity and Capital Resources

 

Liquidity is a measure of a company's ability to meet potential cash requirements. We have historically met our capital requirements through debt financing, revenues from operations, asset sales, and the issuance of equity securities. Due to the decline in oil prices, the resulting decline in our reserves as reflected in our reserve report which caused a corresponding reduction in our borrowing base, and the recent issuances of equity securities from our "shelf" registration, it will be more difficult in 2015 to use our historical means of meeting our capital requirements to provide us with adequate liquidity to fund our operations and capital program.

 

 The following table summarizes total current assets, total current liabilities and working capital.

 

    March 31, 
2015
    December 31,
2014
    Increase /
(Decrease)
 
                   
Current Assets   $ 9,808,996     $ 7,411,168     $ 2,397,828  
                         
Current Liabilities   $ 3,522,426     $ 4,139,356     $ (616,930 )
                         
Working Capital (deficit)   $ 6,286,570     $ 3,271,812     $ 3,014,758  

 

Senior Secured Credit Facility

 

On October 3, 2011, the Company and DD Energy, Inc., EnerJex Kansas, Inc., Black Sable Energy, LLC and Working Interest, LLC ("Borrowers") entered into an Amended and Restated Credit Agreement with Texas Capital Bank, N.A. (the “Bank”) and other financial institutions and banks that may become a party to the Credit Agreement from time to time. The facilities provided under the Amended and Restated Credit Agreement were to be used to refinance Borrowers prior outstanding revolving loan facility with Bank, dated July 3, 2008, and for working capital and general corporate purposes. 

 

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  At our option, loans under the facility will bear stated interest based on the Base Rate plus Base Rate Margin, or Floating Rate plus Floating Rate Margin (as those terms are defined in the Credit Agreement). The Base Rate will be, for any day, a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 0.50% and (b) the Bank's prime rate. The Floating Rate shall mean, at Borrower's option, a per annum interest rate equal to (i) the Eurodollar Rate plus Eurodollar Margin, or (ii) the Base Rate plus Base Rate Margin (as those terms are defined in the Amended and Restated Credit Agreement). Eurodollar borrowings may be for one, two, three, or six months, as selected by the Borrowers. The margins for all loans are based on a pricing grid ranging from 0.00% to 0.75% for the Base Rate Margin and 2.25% to 3.00% for the Floating Rate Margin based on the Company's Borrowing Base Utilization Percentage (as defined in the Amended and Restated Credit Agreement).

 

 On December 15, 2011, we entered into a First Amendment to Amended and Restated Credit Agreement and Second Amended and Restated Promissory Note in the amount of $50,000,000 with the Bank. The Amendment reflected the addition of Rantoul Partners as an additional Borrower and added as additional security for the loans the assets held by Rantoul Partners. 

 

On August 31, 2012, we entered into a Second Amendment to Amended and Restated Credit Agreement with the Bank. The Second Amendment: (i) increased our borrowing base to $7,000,000, (ii) reduced the minimum interest rate to 3.75%, and (iii) added additional new leases as collateral for the loan.

 

 On November 2, 2012, we entered into a Third Amendment to Amended and Restated Credit Agreement with the Bank. The Third Amendment (i) increased our borrowing base to $12,150,000, and (ii) clarified certain continuing covenants and provided a limited waiver of compliance with one of the covenants so clarified for the quarter ended December 31, 2011.

 

On January 24, 2013, we entered into a Fourth Amendment to Amended and Restated Credit Agreement, which was made effective as of December 31, 2012 with the Bank.  The Fourth Amendment reflects the following changes: (i) the Bank consented to the restructuring transactions related to the dissolution of Rantoul Partners, and (ii) the Bank terminated a Limited Guaranty, as defined in the Credit Agreement, executed by Rantoul Partners in favor of the Bank.

 

On April 16, 2013, the Bank increased our borrowing base to $19.5 million.

 

On September 30, 2013, we entered into a Fifth Amendment to the Amended and Restated Credit Agreement.  The Fifth Amendment reflects the following changes:  (i) an expanded principal commitment amount of the Bank to $100,000,000, (ii) increased the Borrowing Base to $38,000,000, (iii) added Black Raven Energy, Inc. to the Credit Agreement as a borrower party, (iv) added certain collateral and security interests in favor of the Bank, and (v) reduced the Company’s current interest rate to 3.30%.  

 

On November 19, 2013, we entered into a Sixth Amendment to the Amended and Restated Credit Agreement. The Sixth Amendment reflects the following changes: (i) added Iberia Bank as a participant into our credit facility, and (ii) made a technical correction to our covenant calculations.

 

 On May 22, 2014, we entered into a Seventh Amendment to the Amended and Restated Credit Agreement. The Seventh Amendment reflects the Bank’s consent to our issuance of up to 850,000 shares of our 10% Series A Cumulative Redeemable Perpetual Preferred Stock.

 

On August 15, 2014, we entered into an Eighth Amendment to the Amended and Restated Credit Agreement. The Eighth Amendment reflects the following changes: (i) the borrowing base was increased from $38 million to $40 million, and (ii) the maturity of the facility was extended by three years to October 3, 2018.

 

Our borrowing base at March 31, 2015 and December 31, 2014 was $40 million, of which we had borrowed $23.5 million and $23 million respectively. For the three month period ended March 31, 2015 and for the year ended December 31, 2014 the interest rate was 3.3%. This facility expires on October 3, 2018.

 

Satisfaction of our cash obligations for the next 12 months

 

We intend to meet our near term cash obligations through financings under our credit facility with Texas Capital Bank and through cash flow generated from operations.

 

Summary of product research and development

 

We do not anticipate performing any significant product research and development under our plan of operation.

 

Expected purchase or sale of any significant equipment

 

We anticipate that we will purchase the necessary production and field service equipment required to produce oil during our normal course of operations over the next twelve months.

 

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Significant changes in the number of employees

  

There have been no significant changes in the number of our employees since December 31, 2014. We currently have 29 full-time employees, including field personnel. As production and drilling activities increase or decrease, we may have to continue to adjust our technical, operational and administrative personnel as appropriate. We are using and will continue to use independent consultants and contractors to perform various professional services, particularly in the area of land services, reservoir engineering, geology drilling, water hauling, pipeline construction, well design, well-site monitoring and surveillance, permitting and environmental assessment. We believe that this use of third-party service providers may enhance our ability to contain operating expenses, general expenses, and capital costs.

 

Off-Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

 

Critical Accounting Policies and Estimates

 

Our critical accounting estimates include the value of our oil and gas properties, asset retirement obligations, and share-based payments.

 

Oil and Gas Properties

 

We follow the full-cost method of accounting under which all costs associated with property acquisition, exploration and development activities are capitalized. We also capitalize internal costs that can be directly identified with our acquisition, exploration and development activities and do not include costs related to production, general corporate overhead or similar activities. 

 

Proved properties are amortized using the units of production method (UOP). Currently we only have operations in the Unites States of America. The UOP calculation multiplies the percentage of estimated proved reserves produced each quarter by the cost of these reserves. The amortization base in the UOP calculation includes the sum of proved property, net of accumulated depreciation, depletion and amortization (DD&A), estimated future development costs (future costs to access and develop proved reserves) and asset retirement costs, less related salvage value. 

 

The cost of unproved properties are excluded from the amortization calculation until it is determined whether or not proved reserves can be assigned to such properties or until development projects are placed into service. Geological and geophysical costs not associated with specific properties are recorded as proved property immediately. Unproved properties are reviewed for impairment quarterly. 

 

Under the full cost method of accounting, the net book value of oil and gas properties, less deferred income taxes, may not exceed a calculated “ceiling.” The ceiling limitation is (a) the present value of future net revenues computed by applying current prices of oil & gas reserves (with consideration of price changes only to the extent provided by contractual arrangements) to estimated future production of proved oil & gas reserves as of the date of the latest balance sheet presented, less estimated future expenditures (based on current costs) to be incurred in developing and producing the proved reserves computed using a discount factor of 10 percent and assuming continuation of existing economic conditions plus (b) the cost of properties not being amortized plus (c) the lower of cost or estimated fair value of unproven properties included in the costs being amortized less (d) income tax effects related to differences between book and tax basis of properties. Future cash outflows associated with settling accrued retirement obligations are excluded from the calculation. Estimated future cash flows are calculated using end-of-period costs and an unweighted arithmetic average of commodity prices in effect on the first day of each of the previous 12 months held flat for the life of the production, except where prices are defined by contractual arrangements.

 

Any excess of the net book value of proved oil and gas properties, less related deferred income taxes, over the ceiling is charged to expense and reflected as additional DD&A in the statement of operations. The ceiling calculation is performed quarterly. During the quarter ended March 31, 2015, we incurred a $16,401,376 impairment. For the year ended December 31, 2014, there were no impairments resulting from the quarterly ceiling tests. 

 

Proceeds from the sale or disposition of oil and gas properties are accounted for as a reduction to capitalized costs unless a significant portion (greater than 25%) of our reserve quantities are sold, in which case a gain or loss is recognized in income.

 

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Asset Retirement Obligations

 

The asset retirement obligation relates to the plug and abandonment costs when our wells are no longer useful. We determine the value of the liability by obtaining quotes for this service and estimate the increase we will face in the future. We then discount the future value based on an intrinsic interest rate that is appropriate for us. If costs rise more than what we have expected there could be additional charges in the future however we monitor the costs of the abandoned wells and we will adjust this liability if necessary.

 

Share-Based Payments

 

The value we assign to the options and warrants that we issue is based on the fair market value as calculated by the Black-Scholes pricing model. To perform a calculation of the value of our options and warrants, we determine an estimate of the volatility of our stock. We need to estimate volatility because there has not been enough trading of our stock to determine an appropriate measure of volatility. We believe our estimate of volatility is reasonable, and we review the assumptions used to determine this whenever we issue a new equity instruments. If we have a material error in our estimate of the volatility of our stock, our expenses could be understated or overstated.

 

Effects of Inflation and Pricing

 

The oil industry is very cyclical and the demand for goods and services of oil field companies, suppliers and others associated with the industry puts extreme pressure on the economic stability and pricing structure within the industry. Material changes in prices impact revenue stream, estimates of future reserves, borrowing base calculations of bank loans and value of properties in purchase and sale transactions. Material changes in prices can impact the value of oil companies and their ability to raise capital, borrow money and retain personnel. We anticipate business costs and the demand for services related to production and exploration will fluctuate while the commodity prices for oil remains volatile.

 

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

We are a smaller reporting Company as defined by Rule 12b-2 under the Securities Exchange Act of 1934, and are not required to provide the information required under this item.

 

ITEM 4.  CONTROLS AND PROCEDURES.

  

Our chief executive officer, Robert G. Watson, Jr., and our Chief Financial Officer, Douglas M. Wright evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Report pursuant to Exchange Act Rule 13-a-15(b). Based on the evaluation, Mr. Watson and Mr. Wright concluded that our disclosure controls and procedures are effective.

 

There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

17
 

 

PART II—OTHER INFORMATION

 

ITEM 1.  LEGAL PROCEEDINGS.

 

We may become involved in various routine legal proceedings incidental to our business. However, to our knowledge as of the date of this transition report, there are no material pending legal proceedings to which we are a party or to which any of our property is subject.

 

 

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

 

None.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES.

 

Not applicable.

 

18
 

 

ITEM 5. OTHER INFORMATION.

 

None.

 

ITEM 6.  EXHIBITS.

  

Exhibit

No.

  Description
2.1   Agreement and Plan of Merger between Millennium Plastics Corporation and Midwest Energy, Inc. effective August 15, 2006 (incorporated by reference to Exhibit 2.3 to the Form 8-K filed on August 16, 2006).
2.2   Agreement and Plan of Merger by and among Registrant, BRE Merger Sub, Inc., Black Raven Energy, Inc. and West Coast Opportunity Fund, LLC dated July 23, 2013 (incorporated herein by reference to Exhibit 10.4 on Form 8-K filed July 29, 2013).
3.1   Amended and Restated Articles of Incorporation, as currently in effect (incorporated by reference to Exhibit 3.1 to the Form 10-Q filed on August 14, 2008)
3.2   Amended and Restated Bylaws, as currently in effect (incorporated by reference to Appendix C to Schedule 14A, filed on June 6, 2013)
3.3   Certificate of Amendment of Articles of Incorporation as filed with the Nevada Secretary of State on  May 29, 2014 (incorporated herein by reference as Exhibit 3.1 on Current Report Form 8-K filed on May 29, 2014)
3.4   Certificate of Amendment of Articles of Incorporation (incorporated by reference as Exhibit 3.1 on Current Report Form 8-K filed on May 29, 2014)
3.5   Amended and Restated Certificate of Designation for Series A Preferred Stock (incorporated by reference to Exhibit 4.6 to the Form S-1/A filed on June 3, 2014)
3.6   Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock (incorporated herein by reference as Exhibit 4.1 on Current Report Form 8-K filed on March 11, 2015)
4.1   Specimen common stock certificate (incorporated by reference to Exhibit 4.3 to the Form S-1/A filed on May 27, 2008)
4.2   Specimen Series A Preferred Stock Certificate (incorporated by reference to Exhibit 4.4 to the Form S-1/A filed on June 3, 2014)
4.3   Specimen Series B Convertible Preferred Stock Certificate (incorporated herein by reference as Exhibit 4.2 on Current Report Form 8-K filed on March 11, 2015)
4.4  

Amended and Restated Certificate of Designation for Series A Preferred Stock (incorporated by reference to Exhibit 4.6 to the Form S-1/A filed on June 3, 2014)

4.5   Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock (incorporated herein by reference as Exhibit 4.1 on Current Report Form 8-K filed on March 11, 2015)
4.6   Form of Warrant to Purchase Common Stock (incorporated herein by reference as Exhibit 4.3 on Current Report Form 8-K filed on March 11, 2015)
4.7   Form of Placement Agent Warrant (incorporated herein by reference as Exhibit 4.4 on Current Report Form 8-K filed on March 11, 2015)
10.1   Form of Officer and Director Indemnification Agreement (incorporated by reference to Exhibit 10.2 to the Form 8-K filed on October 16, 2008)  
10.2   Amendment 4 to Joint Exploration Agreement effective as of November 6, 2008 between MorMeg, LLC and EnerJex Resources, Inc.  (incorporated by reference to Exhibit 10.15 to the Form 10-K filed July 14, 2009)
10.3   Amendment 5 to Joint Exploration Agreement effective as of December 31, 2009 between MorMeg LLC and EnerJex Resources, Inc. (incorporated by reference to Exhibit 10.15 to the Form 10-Q filed on February 16, 2010)
10.4   Amendment 6 to Joint Exploration Agreement effective as of March 31, 2010 between MorMeg LLC and EnerJex Resources, Inc. (incorporated by reference to Exhibit 10.24 to the Form 10-K filed on July 15, 2010)
10.5   Amended and Restated EnerJex Resources, Inc. Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on October 16, 2008)
10.6   Joint Development Agreement between EnerJex Resources, Inc. and Haas Petroleum, LLC dated December 31, 2010 (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on January 27, 2011).
10.7   Joint Operating Agreement between EnerJex Resources, Inc. and Haas Petroleum, LLC and MorMeg, LLC dated December 31, 2010 (incorporated by reference to Exhibit 10.2 to the Form 8-K filed on January 27, 2011).
10.8   Amended and Restated Credit Agreement dated October 3, 2011 (incorporated herein by reference to Exhibit 10.1 on Form 8-K filed on October 6, 2011).
10.9   Option and Joint Development Agreement by and among Registrant and MorMeg, LLC dated August 2011 (incorporated herein by reference to Exhibit 10.1 on Form 8-K filed on November 15, 2011).
10.10   First Amendment to Amended and Restated Credit Agreement dated December 14, 2011 (incorporated herein by reference to Exhibit 10.2 on Form 8-K filed on December 14, 2011).

 

19
 

 

10.11   Second Amendment to Amended and Restated Credit Agreement dated August 31, 2012 (incorporated herein by reference to Exhibit 10.1 on Form 8-K filed on November 8, 2012).
10.12   Third Amendment to Amended and Restated Credit Agreement dated November 2, 2012 (incorporated herein by reference to Exhibit 10.2 on Form 8-K filed on November 8, 2012).
10.13   Amended and Restated Employment Agreement by and among Registrant and Robert G. Watson, Jr. dated December 31, 2012 (incorporated herein by reference to Exhibit 10.1 on Form 8-K filed on January 4, 2013).
10.14   Fourth Amendment to Amended and Restated Credit Agreement by and among Registrant and Texas Capital Bank dated December 31, 2012 (incorporated herein by reference to Exhibit 10.2 on Form 8-K filed on January 30, 2013).
10.15   First Amendment to Amended & Restated Mortgage Security Agreement, Financing Statement and Assignment of Production by and among Working Interest, LLC and Texas Capital Bank dated December 31, 2012 (incorporated herein by reference to Exhibit 10.3 on Form 8-K filed on January 30, 2013).
10.16   Mortgage, Security Agreement, Financing Statement and Assignment of Production and Revenues by and among Working Interest, LLC and Texas Capital Bank dated December 31, 2012 (incorporated herein by reference to Exhibit 10.4 on Form 8-K filed on January 30, 2013).
10.17   2013 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.1 on Registration Statement on Form S-8 filed on June 12, 2013).
10.18   Fifth Amendment to Amended and Restated Credit Agreement by and among Registrant and Texas Capital Bank, N.A. dated September 30, 2013 (incorporated herein by reference to Exhibit 10.1 on Form 8-K filed October 1, 2013).
10.19   Sixth Amendment to Amended and Restated Credit Agreement by and among Registrant and Texas Capital Bank, N.A. dated November 19, 2013 (incorporated by reference to Exhibit 10.37 on Form 10-Q filed May 13, 2014).
10.20   Exchange Agreement between EnerJex Resources, Inc. and holders of Series A preferred stock (incorporated by reference to Exhibit 10.38 on Form S-1/A Amendment No. 2 filed June 3, 2014).
10.21   Seventh Amendment to Amended and Restated Credit Agreement by and among Registrant and Texas Capital Bank, N.A. dated May 22, 2014 (incorporated by reference to Exhibit 10.1 to Form 8-K filed May 27, 2014).
10.22   Form of Securities Purchase Agreement dated as of March 11, 2015 (incorporated herein by reference as Exhibit 10.1 on Current Report Form 8-K filed on March 11, 2015)
10.23   Eighth Amendment to Amended and Restated Credit Agreement by and among Registrant and Texas Capital Bank, N.A. dated August 13, 2014 (incorporated herein by reference as Exhibit 10.23 on Form 10-K filed March 31, 2015).
10.24   Ninth Amendment to Amended and Restated Credit Agreement by and among Registrant and Texas Capital Bank, N.A. dated April 29, 2015 (incorporated by reference to Exhibit 10.1 to Form 8-K filed May 5, 2015).
31.1   Certification of Chief Executive and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2   Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1   Certification of Chief Executive and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2   Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

20
 

 

SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

ENERJEX RESOURCES, INC.  
(Registrant)  
   
By: /s/ Robert G. Watson, Jr.  
  Robert G. Watson, Jr. Chief Executive Officer  
   
Date: May 15, 2015  

 

21

 

EX-31.1 2 v409265_ex31-1.htm EXHIBIT 31.1

 

EXHIBIT 31.1

CERTIFICATION

 

I, Robert G. Watson, Jr. Chief Executive Officer of EnerJex Resources, Inc., certify that:

 

  1. I have reviewed this Quarterly Report on Form 10-Q of EnerJex Resources, Inc.;

 

  2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

  3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

 

  4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

  5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

  a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

  b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

Date: May 15, 2015

 

/s/ Robert G. Watson, Jr.  
Robert G. Watson, Jr.  
Chief Executive Officer  
(Principal Executive Officer)  

 

 

 

EX-31.2 3 v409265_ex31-2.htm EXHIBIT 31.2

 

EXHIBIT 31.2

CERTIFICATION

 

I, Douglas M. Wright Chief Financial Officer of EnerJex Resources, Inc., certify that:

 

  1. I have reviewed this Quarterly Report on Form 10-Q of EnerJex Resources, Inc.;

 

  2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

  3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

 

  4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

  5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

  a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

  b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

Date: May 15, 2015

 

/s/ Douglas M. Wright  
Douglas M. Wright  
Chief Financial Officer  

 

 

 

EX-32.1 4 v409265_ex32-1.htm EXHIBIT 32.1

 

EXHIBIT 32.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Robert G. Watson, Jr., certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of EnerJex Resources, Inc. on Form 10-Q for the quarterly period ended March 31, 2015, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of EnerJex Resources, Inc.

 

  1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

  2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date:    May 15, 2015  
   
/s/ Robert G. Watson, Jr.  
Robert G. Watson, Jr.  
Chief Executive Officer  
(Principal Executive Officer)  

 

 

 

EX-32.2 5 v409265_ex32-2.htm EXHIBIT 32.2

 

EXHIBIT 32.2

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Douglas M. Wright, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of EnerJex Resources, Inc. on Form 10-Q for the quarterly period ended March 31, 2015, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of EnerJex Resources, Inc.

 

  1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

  2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date:    May 15, 2015  
   
/s/ Douglas M. Wright  
Douglas M. Wright  
Chief Financial Officer  

 

 

 

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FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: times new roman; 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For the three month period ended March 31, 2015 and for the year ended December 31, 2014 the interest rate was <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> 3.3</font>%. 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We also issued in an unregistered offering, 521.62076 shares of Preferred Stock convertible into 298,069 shares of common stock, and warrants to purchase 1,771,428 shares of its common stock. The shareholder&#8217;s ability to convert a portion of the Preferred Stock and to exercise the warrant are restricted: (i) prior to the Company obtaining approval of the offering by its shareholders, which we expect to obtain before May 31, 2015, and (ii) pursuant to customary &#8220;blocker&#8221; provisions restricting the investor&#8217;s ownership to 9.99% of our outstanding common stock.</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> The Preferred Stock has a liquidation preference of $1,000 per share, and will be convertible at the option of the shareholder at a conversion ratio equal to approximately 571 shares of common stock for each one (1) share of Preferred Stock, subject to customary adjustments and anti-dilution price protection. 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FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">$</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 4px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div style="CLEAR:both;CLEAR: both">-</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">$</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 4px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div style="CLEAR:both;CLEAR: both">-</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">$</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 4px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div style="CLEAR:both;CLEAR: both">1,018,573</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> </table> </div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> The following shows the changes in asset retirement obligations:</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN:Left; TEXT-INDENT: 0in; WIDTH: 100%"> <table style="MARGIN: 0in 0in 0in 0.5in; WIDTH: 90%; BORDER-COLLAPSE: collapse; OVERFLOW: visible" cellspacing="0" cellpadding="0" align="left"> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="77%"> <div>Asset retirement obligations, December 31, 2014</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>2,906,093</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="77%"> <div>Liabilities incurred during the period</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>-</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="77%"> <div>Accretion</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>70,984</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="77%"> <div>Liabilities settled during the quarter</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>(2,244)</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="77%"> <div>Asset retirement obligations, March 31, 2015</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>2,974,833</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> </table> </div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt"> </div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt"> <font style="FONT-SIZE: 10pt">The following derivative contracts were in place at March 31, 2015:</font></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt"> <font style="FONT-SIZE: 10pt">&#160;</font></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt; TEXT-INDENT: 0in; WIDTH: 100%"> <table style="MARGIN: 0in 0in 0in 0.5in; WIDTH: 90%; BORDER-COLLAPSE: collapse; OVERFLOW: visible" cellspacing="0" cellpadding="0"> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="43%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>Term</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>Monthly&#160;Volumes</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="11%" colspan="2"> <div>Price/Bbl</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="11%" colspan="2"> <div>Fair&#160;Value</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="43%"> <div>Deferred premium put</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>1/16-6/16</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>9,000 Bbls</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 4px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>85.00</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 4px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>1,256,288</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="43%"> <div>Crude oil swap</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>1/15-12/15</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>5,800 Bbls</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 4px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>88.55</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 4px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>1,879,490</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="43%"> <div>Crude oil swap</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>7/11-12/15</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>3,000 Bbls</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 4px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>83.70</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 4px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>841,200</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="43%"> <div>Crude oil swap</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>7/12-12/15</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>1,000 Bbls</div> </td> <td style="TEXT-ALIGN: left; 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(&#8220;we&#8221;, &#8220;us&#8221;, &#8220;our&#8221; and &#8220;Company&#8221;) have been prepared in accordance with United States generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and reflect all adjustments which, in the opinion of management, are necessary for a fair presentation.&#160;&#160;All such adjustments are of a normal recurring nature.&#160;&#160;The results of operations for the interim period are not necessarily indicative of the results to be expected for a full year.&#160;&#160;Certain amounts in the prior year statements have been reclassified to conform to the current year presentations.&#160;&#160;The statements should be read in conjunction with the financial statements and footnotes thereto included in our Annual Report Form 10-K for the fiscal year ended December 31, 2014.</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 39.65pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> Our consolidated financial statements include the accounts of our wholly-owned subsidiaries, EnerJex Kansas, Inc., Black Sable Energy, LLC, Working Interest, LLC, and Black Raven Energy, Inc. (&#8220;Black Raven&#8221;) for the quarter ended March 31, 2015 and for the year ended December 31, 2014. All intercompany transactions and accounts have been eliminated in consolidation.&#160;&#160;</div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;size: 8.5in 11.0in"> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0in 0in 0pt" align="justify"><strong><font style="FONT-SIZE: 10pt">Note 3 &#150; Fair Value Measurements</font></strong></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 23.1pt; MARGIN: 0in 0in 0pt"> <font style="FONT-SIZE: 10pt">&#160;</font></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt"> <font style="FONT-SIZE: 10pt">We hold certain financial assets which are required to be measured at fair value on a recurring basis in accordance with the Statement of Financial Accounting Standard No.&#160;157, <i>"Fair Value Measurements"</i> ("ASC Topic 820-10").&#160;ASC Topic 820-10 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).&#160;ASC Topic 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability. 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FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">$</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 4px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div style="CLEAR:both;CLEAR: both">-</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">$</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 4px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div style="CLEAR:both;CLEAR: both">1,018,573</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> </table> </div> <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"></font></div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <strong>Note 4 - Asset Retirement Obligation</strong></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 23.1pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> Our asset retirement obligations relate to the liabilities associated with the abandonment of oil wells. The amounts recognized are based on numerous estimates and assumptions, including future retirement costs, inflation rates and credit adjusted risk-free interest rates. <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> </font>The following shows the changes in asset retirement obligations:</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN:Left; TEXT-INDENT: 0in; WIDTH: 100%"> <table style="MARGIN: 0in 0in 0in 0.5in; WIDTH: 90%; BORDER-COLLAPSE: collapse; OVERFLOW: visible" cellspacing="0" cellpadding="0" align="left"> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="77%"> <div>Asset retirement obligations, December 31, 2014</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>2,906,093</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="77%"> <div>Liabilities incurred during the period</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>-</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="77%"> <div>Accretion</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>70,984</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="77%"> <div>Liabilities settled during the quarter</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>(2,244)</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="77%"> <div>Asset retirement obligations, March 31, 2015</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>2,974,833</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> </table> </div> <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"></font> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> 0 0 0 0 0 0 0 0 0 0 0 0 615102 985746 3952092 3736005 850000 183433 23500000 23000000 <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">A summary of stock options is as follows:</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN:Left; TEXT-INDENT: 0in; WIDTH: 100%"> <table style="MARGIN: 0in 0in 0in 0.5in; WIDTH: 90%; BORDER-COLLAPSE: collapse; OVERFLOW: visible" cellspacing="0" cellpadding="0" align="left"> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="41%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="11%" colspan="2"> <div>Options</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="11%" colspan="2"> <div>Weighted<br/> Avg.<br/> Exercise<br/> Price</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="11%" colspan="2"> <div>Warrants</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="11%" colspan="2"> <div>Weighted<br/> Avg.<br/> Exercise<br/> Price</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="41%"> <div>Outstanding December 31, 2014</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>231,332</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>9.33</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>-</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>-</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="41%"> <div>Granted</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>67,332</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>9.85</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>-</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>-</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="41%"> <div>Cancelled</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>-</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>-</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>-</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>-</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="41%"> <div>Exercised</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>-</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>-</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>-</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>-</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="41%"> <div>Outstanding March 31, 2015</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>298,664</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>9.45</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>-</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>-</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> </table> </div> <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"></font> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> 500000 500000 120000 <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><strong>Note 2 - Stock Options</strong></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"></font>A summary of stock options is as follows:</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN:Left; TEXT-INDENT: 0in; WIDTH: 100%"> <table style="MARGIN: 0in 0in 0in 0.5in; WIDTH: 90%; BORDER-COLLAPSE: collapse; OVERFLOW: visible" cellspacing="0" cellpadding="0" align="left"> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="41%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="11%" colspan="2"> <div>Options</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="11%" colspan="2"> <div>Weighted<br/> Avg.<br/> Exercise<br/> Price</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="11%" colspan="2"> <div>Warrants</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="11%" colspan="2"> <div>Weighted<br/> Avg.<br/> Exercise<br/> Price</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="41%"> <div>Outstanding December 31, 2014</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>231,332</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>9.33</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>-</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>-</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="41%"> <div>Granted</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; 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FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">Pursuant to full cost accounting rules, the Company must perform a ceiling test each quarter on its proved oil and natural gas assets within each separate cost center. All of the Company&#8217;s costs are included in one cost center because all of the Company&#8217;s operations are located in the United States. The Company&#8217;s ceiling test was calculated using trailing twelve-month, unweighted-average first-day-of-the-month prices for oil and natural gas as of March&#160;31, 2015, which were based on a West Texas Intermediate oil price of $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">78.82</font> per Bbl and a Henry Hub natural gas price of $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">3.74</font> per MMBtu (adjusted for basis and quality differentials), respectively. Utilizing these prices, the calculated ceiling amount was less than the net capitalized cost of oil and natural gas properties as of March&#160;31, 2015, and as a result, a pre-tax write-down of $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">16.4</font> million was recorded at March&#160;31, 2015. Additional material write-downs of the Company&#8217;s oil and gas properties could occur in subsequent quarters in the event that oil and natural gas prices remain at&#160;current levels, or if the Company experiences significant downward adjustments to its estimated proved reserves.&#160;<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> </font></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;CLEAR: both"> </div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;CLEAR: both"> &#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> We follow the full-cost method of accounting under which all costs associated with property acquisition, exploration and development activities are capitalized. We also capitalize internal costs that can be directly identified with our acquisition, exploration and development activities and do not include costs related to production, general corporate overhead or similar activities.&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 39.65pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> Proved properties are amortized using the units of production method (UOP). Currently we only have operations in the Unites States of America. The UOP calculation multiplies the percentage of estimated proved reserves produced each quarter by the cost of these reserves. The amortization base in the UOP calculation includes the sum of proved property, net of accumulated depreciation, depletion and amortization (DD&amp;A), estimated future development costs (future costs to access and develop proved reserves) and asset retirement costs, less related salvage value.&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"> &#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> The cost of unproved properties are excluded from the amortization calculation until it is determined whether or not proved reserves can be assigned to such properties or until development projects are placed into service. Geological and geophysical costs not associated with specific properties are recorded as proved property immediately. Unproved properties are reviewed for impairment quarterly.&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 39.65pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> Under the full cost method of accounting, the net book value of oil and gas properties, less deferred income taxes, may not exceed a calculated &#8220;ceiling.&#8221; The ceiling limitation is (a) the present value of future net revenues computed by applying current prices of oil &amp; gas reserves (with consideration of price changes only to the extent provided by contractual arrangements) to estimated future production of proved oil &amp; gas reserves as of the date of the latest balance sheet presented, less estimated future expenditures (based on current costs) to be incurred in developing and producing the proved reserves computed using a discount factor of 10 percent and assuming continuation of existing economic conditions plus (b) the cost of properties not being amortized plus (c) the lower of cost or estimated fair value of unproven properties included in the costs being amortized less (d) income tax effects related to differences between book and tax basis of properties. Future cash outflows associated with settling accrued retirement obligations are excluded from the calculation. Estimated future cash flows are calculated using end-of-period costs and an unweighted arithmetic average of commodity prices in effect on the first day of each of the previous 12 months held flat for the life of the production, except where prices are defined by contractual arrangements.</div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> 78.82 3.74 1750000 60 to 90 days 0.159 1000000 12.50 2300000 709812 298069 0.0999 1771428 1000 571 2.75 5000 60.00 5.72 22600000 EX-101.SCH 8 enrj-20150331.xsd XBRL TAXONOMY EXTENSION SCHEMA 101 - Document - Document And Entity Information link:presentationLink link:definitionLink link:calculationLink 102 - Statement - Condensed Consolidated Balance Sheets link:presentationLink link:definitionLink link:calculationLink 103 - Statement - Condensed Consolidated Balance Sheets (Parenthetical) link:presentationLink link:definitionLink link:calculationLink 104 - Statement - Condensed Consolidated Statements of Operations link:presentationLink link:definitionLink link:calculationLink 105 - 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Commitments and Contingencies - Additional Information (Detail) (USD $)
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Commitments and Contingencies Disclosure [Line Items]    
Operating Leases, Rent Expense $ 43,000us-gaap_LeaseAndRentalExpense $ 51,000us-gaap_LeaseAndRentalExpense
Operating Leases, Future Minimum Payments, Remainder of Fiscal Year 120,000us-gaap_OperatingLeasesFutureMinimumPaymentsRemainderOfFiscalYear  
Operating Leases, Future Minimum Payments, Due in Two Years 147,000us-gaap_OperatingLeasesFutureMinimumPaymentsDueInTwoYears  
Operating Leases, Future Minimum Payments, Due in Three Years 145,000us-gaap_OperatingLeasesFutureMinimumPaymentsDueInThreeYears  
Operating Leases, Future Minimum Payments, Due in Four Years 91,000us-gaap_OperatingLeasesFutureMinimumPaymentsDueInFourYears  
Operating Leases, Future Minimum Payments, Due in Five Years 77,000us-gaap_OperatingLeasesFutureMinimumPaymentsDueInFiveYears  
Texas Railroad Commission [Member]    
Commitments and Contingencies Disclosure [Line Items]    
Letters of Credit Outstanding, Amount $ 50,000us-gaap_LettersOfCreditOutstandingAmount
/ dei_LegalEntityAxis
= enrj_TexasRailroadCommissionMember
 
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Asset Retirement Obligation
3 Months Ended
Mar. 31, 2015
Asset Retirement Obligation [Abstract]  
Asset Retirement Obligation
Note 4 - Asset Retirement Obligation
 
Our asset retirement obligations relate to the liabilities associated with the abandonment of oil wells. The amounts recognized are based on numerous estimates and assumptions, including future retirement costs, inflation rates and credit adjusted risk-free interest rates. The following shows the changes in asset retirement obligations:
  
Asset retirement obligations, December 31, 2014
 
$
2,906,093
 
Liabilities incurred during the period
 
 
-
 
Accretion
 
 
70,984
 
Liabilities settled during the quarter
 
 
(2,244)
 
Asset retirement obligations, March 31, 2015
 
$
2,974,833
 
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Subsequent Events - Additional Information (Detail) (USD $)
3 Months Ended 0 Months Ended
Mar. 31, 2015
Apr. 15, 2015
May 13, 2015
Dec. 31, 2014
Apr. 16, 2013
Apr. 28, 2015
Apr. 29, 2015
Subsequent Event [Line Items]              
Line Of Credit Facility, Current Borrowing Capacity 40,000,000us-gaap_LineOfCreditFacilityCurrentBorrowingCapacity     $ 40,000,000us-gaap_LineOfCreditFacilityCurrentBorrowingCapacity $ 19,500,000us-gaap_LineOfCreditFacilityCurrentBorrowingCapacity    
Series B Preferred Stock [Member]              
Subsequent Event [Line Items]              
Stock Issued During Period, Shares, New Issues 1,242.17099us-gaap_StockIssuedDuringPeriodSharesNewIssues
/ us-gaap_StatementClassOfStockAxis
= us-gaap_SeriesBPreferredStockMember
           
Subsequent Event [Member]              
Subsequent Event [Line Items]              
Cash distribution expected to be generated   1,750,000enrj_CashDistributionExpectedToBeGenerated
/ us-gaap_SubsequentEventTypeAxis
= us-gaap_SubsequentEventMember
         
Cash distribution expected to be generated days   60 to 90 days          
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners   15.90%us-gaap_MinorityInterestOwnershipPercentageByNoncontrollingOwners
/ us-gaap_SubsequentEventTypeAxis
= us-gaap_SubsequentEventMember
         
Amount limited by proceeds from any potential future securities offering will be unencumbered by Banks Liens 1,000,000enrj_AmountLimitedByProceedsFromAnyPotentialFutureSecuritiesOfferingWillBeUnencumberedByBanksLiens
/ us-gaap_SubsequentEventTypeAxis
= us-gaap_SubsequentEventMember
           
Subsequent Event [Member] | Crude Oil [Member]              
Subsequent Event [Line Items]              
Number Of Crude Oil Barrels Sold           5,000enrj_NumberOfCrudeOilBarrelsSold
/ us-gaap_EnergyAxis
= us-gaap_CrudeOilMember
/ us-gaap_SubsequentEventTypeAxis
= us-gaap_SubsequentEventMember
 
Sale Of Crude Oil Price Per Barrel           60.00enrj_SaleOfCrudeOilPricePerBarrel
/ us-gaap_EnergyAxis
= us-gaap_CrudeOilMember
/ us-gaap_SubsequentEventTypeAxis
= us-gaap_SubsequentEventMember
 
Premium Price Per Crude Oil Barrel           5.72enrj_PremiumPricePerCrudeOilBarrel
/ us-gaap_EnergyAxis
= us-gaap_CrudeOilMember
/ us-gaap_SubsequentEventTypeAxis
= us-gaap_SubsequentEventMember
 
Subsequent Event [Member] | Series A Cumulative Redeemable Preferred Stock [Member]              
Subsequent Event [Line Items]              
Preferred Stock, Dividend Rate, Percentage     10.00%us-gaap_PreferredStockDividendRatePercentage
/ us-gaap_StatementClassOfStockAxis
= enrj_SeriesCumulativeRedeemablePreferredStockMember
/ us-gaap_SubsequentEventTypeAxis
= us-gaap_SubsequentEventMember
       
Stock Issued During Period, Shares, New Issues     183,433us-gaap_StockIssuedDuringPeriodSharesNewIssues
/ us-gaap_StatementClassOfStockAxis
= enrj_SeriesCumulativeRedeemablePreferredStockMember
/ us-gaap_SubsequentEventTypeAxis
= us-gaap_SubsequentEventMember
       
Shares Issued, Price Per Share     $ 12.50us-gaap_SharesIssuedPricePerShare
/ us-gaap_StatementClassOfStockAxis
= enrj_SeriesCumulativeRedeemablePreferredStockMember
/ us-gaap_SubsequentEventTypeAxis
= us-gaap_SubsequentEventMember
       
Proceeds from Issuance of Preferred Stock and Preference Stock     2,300,000us-gaap_ProceedsFromIssuanceOfPreferredStockAndPreferenceStock
/ us-gaap_StatementClassOfStockAxis
= enrj_SeriesCumulativeRedeemablePreferredStockMember
/ us-gaap_SubsequentEventTypeAxis
= us-gaap_SubsequentEventMember
       
Subsequent Event [Member] | Ninth Amendment [Member]              
Subsequent Event [Line Items]              
Line Of Credit Facility, Current Borrowing Capacity             $ 22,600,000us-gaap_LineOfCreditFacilityCurrentBorrowingCapacity
/ us-gaap_CreditFacilityAxis
= enrj_NinthAmendmentMember
/ us-gaap_SubsequentEventTypeAxis
= us-gaap_SubsequentEventMember
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Fair Value Measurements
3 Months Ended
Mar. 31, 2015
Fair Value Measurements [Abstract]  
Fair Value Measurements
Note 3 – Fair Value Measurements
 
We hold certain financial assets which are required to be measured at fair value on a recurring basis in accordance with the Statement of Financial Accounting Standard No. 157, "Fair Value Measurements" ("ASC Topic 820-10"). ASC Topic 820-10 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). ASC Topic 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability. The three levels of the fair value hierarchy under ASC Topic 820-10 are described below:
 
Level 1. Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access. 
 
Level 2. Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. We consider the derivative liability to be Level 2. We determine the fair value of the derivative liability utilizing various inputs, including NYMEX price quotations and contract terms.
 
Level 3. Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. We consider our marketable securities to be Level 3.
 
Our derivative instruments consist of fixed price commodity swaps.
 
 
 
Fair Value Measurement
 
 
 
Level 1
 
Level 2
 
Level 3
 
Crude oil contracts
 
$
-
 
$
4,194,738
 
$
-
 
Marketable Securities
 
$
-
 
$
-
 
$
1,018,573
 

XML 21 R2.htm IDEA: XBRL DOCUMENT v2.4.1.9
Condensed Consolidated Balance Sheets (USD $)
Mar. 31, 2015
Dec. 31, 2014
Current assets:    
Cash $ 2,933,562us-gaap_CashAndCashEquivalentsAtCarryingValue $ 805,524us-gaap_CashAndCashEquivalentsAtCarryingValue
Accounts receivable 959,653us-gaap_AccountsReceivableNetCurrent 1,278,509us-gaap_AccountsReceivableNetCurrent
Inventory 222,929us-gaap_InventoryNet 248,218us-gaap_InventoryNet
Derivative receivable 3,952,092us-gaap_DerivativeAssetsCurrent 3,736,005us-gaap_DerivativeAssetsCurrent
Marketable securities 1,018,573us-gaap_MarketableSecuritiesCurrent 1,018,573us-gaap_MarketableSecuritiesCurrent
Deposits and prepaid expenses 722,187us-gaap_PrepaidExpenseAndOtherAssetsCurrent 324,339us-gaap_PrepaidExpenseAndOtherAssetsCurrent
Total current assets 9,808,996us-gaap_AssetsCurrent 7,411,168us-gaap_AssetsCurrent
Non-current assets:    
Fixed assets, net of accumulated depreciation of $2,005,467 and $1,945,607 2,335,805us-gaap_PropertyPlantAndEquipmentGross 2,404,703us-gaap_PropertyPlantAndEquipmentGross
Oil and gas properties using full-cost accounting, net of accumulated DD&A of $14,501,249 and $13,827,347 47,300,714us-gaap_OilAndGasPropertyFullCostMethodNet 64,263,272us-gaap_OilAndGasPropertyFullCostMethodNet
Derivative receivable 615,102us-gaap_DerivativeAssetsNoncurrent 985,746us-gaap_DerivativeAssetsNoncurrent
Other non-current assets 941,650us-gaap_OtherAssetsNoncurrent 993,207us-gaap_OtherAssetsNoncurrent
Total non-current assets 51,193,271us-gaap_AssetsNoncurrent 68,646,928us-gaap_AssetsNoncurrent
Total assets 61,002,267us-gaap_Assets 76,058,096us-gaap_Assets
Current liabilities:    
Accounts payable 2,027,686us-gaap_AccountsPayableCurrent 3,042,835us-gaap_AccountsPayableCurrent
Accrued liabilities 1,494,740us-gaap_AccruedLiabilitiesCurrent 1,096,521us-gaap_AccruedLiabilitiesCurrent
Total current liabilities 3,522,426us-gaap_LiabilitiesCurrent 4,139,356us-gaap_LiabilitiesCurrent
Non-Current Liabilities:    
Asset retirement obligation 2,974,833us-gaap_AssetRetirementObligationsNoncurrent 2,906,093us-gaap_AssetRetirementObligationsNoncurrent
Long-term debt 23,504,928us-gaap_LongTermDebtNoncurrent 23,011,660us-gaap_LongTermDebtNoncurrent
Total non-current liabilities 26,479,761us-gaap_LiabilitiesNoncurrent 25,917,753us-gaap_LiabilitiesNoncurrent
Total liabilities 30,002,187us-gaap_Liabilities 30,057,109us-gaap_Liabilities
Commitments and Contingencies      
Stockholders' Equity:    
Common stock, $0.001 par value, 250,000,000 shares authorized; shares issued and outstanding 8,406,661 at March 31, 2015 and 7,643,114 at December 31, 2014 8,407us-gaap_CommonStockValue 7,643us-gaap_CommonStockValue
Paid in capital 66,648,974us-gaap_AdditionalPaidInCapital 63,825,998us-gaap_AdditionalPaidInCapital
Accumulated other comprehensive income (552,589)us-gaap_AccumulatedOtherComprehensiveIncomeLossNetOfTax (552,589)us-gaap_AccumulatedOtherComprehensiveIncomeLossNetOfTax
Retained (deficit) (35,105,466)us-gaap_RetainedEarningsAccumulatedDeficit (17,280,817)us-gaap_RetainedEarningsAccumulatedDeficit
Total stockholders' equity 31,000,080us-gaap_StockholdersEquity 46,000,987us-gaap_StockholdersEquity
Total liabilities and stockholders' equity 61,002,267us-gaap_LiabilitiesAndStockholdersEquity 76,058,096us-gaap_LiabilitiesAndStockholdersEquity
10% Series A Cumulative Redeemable Preferred Stock [Member]    
Stockholders' Equity:    
Preferred Stock Value 752us-gaap_PreferredStockValue
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752us-gaap_PreferredStockValue
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Series B Convertable Preferred Stock [Member]    
Stockholders' Equity:    
Preferred Stock Value $ 2us-gaap_PreferredStockValue
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$ 0us-gaap_PreferredStockValue
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XML 22 R6.htm IDEA: XBRL DOCUMENT v2.4.1.9
Basis of Presentation
3 Months Ended
Mar. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation
Note 1 – Basis of Presentation
 
The unaudited condensed consolidated financial statements of EnerJex Resources, Inc. (“we”, “us”, “our” and “Company”) have been prepared in accordance with United States generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and reflect all adjustments which, in the opinion of management, are necessary for a fair presentation.  All such adjustments are of a normal recurring nature.  The results of operations for the interim period are not necessarily indicative of the results to be expected for a full year.  Certain amounts in the prior year statements have been reclassified to conform to the current year presentations.  The statements should be read in conjunction with the financial statements and footnotes thereto included in our Annual Report Form 10-K for the fiscal year ended December 31, 2014.
  
Our consolidated financial statements include the accounts of our wholly-owned subsidiaries, EnerJex Kansas, Inc., Black Sable Energy, LLC, Working Interest, LLC, and Black Raven Energy, Inc. (“Black Raven”) for the quarter ended March 31, 2015 and for the year ended December 31, 2014. All intercompany transactions and accounts have been eliminated in consolidation.  
XML 23 R22.htm IDEA: XBRL DOCUMENT v2.4.1.9
Asset Retirement Obligation (Changes in Asset Retirement Obligations) (Detail) (USD $)
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Reconciliation Of Changes In Asset Retirement Obligations [Line Items]    
Asset retirement obligations, beginning balance $ 2,906,093us-gaap_AssetRetirementObligationsNoncurrent  
Liabilities incurred during the period 0us-gaap_AssetRetirementObligationLiabilitiesIncurred  
Accretion 70,984us-gaap_AssetRetirementObligationAccretionExpense 63,695us-gaap_AssetRetirementObligationAccretionExpense
Liabilities settled during the quarter (2,244)us-gaap_AssetRetirementObligationLiabilitiesSettled  
Asset retirement obligations, end balance $ 2,974,833us-gaap_AssetRetirementObligationsNoncurrent  
XML 24 R24.htm IDEA: XBRL DOCUMENT v2.4.1.9
Long-Term Debt - Additional Information (Detail) (USD $)
1 Months Ended 3 Months Ended 1 Months Ended
May 22, 2014
Mar. 31, 2015
Sep. 30, 2013
Dec. 31, 2014
Apr. 16, 2013
Dec. 15, 2011
Aug. 31, 2012
Nov. 02, 2012
Aug. 15, 2014
Debt Instrument [Line Items]                  
Line of credit facility, current borrowing capacity   40,000,000us-gaap_LineOfCreditFacilityCurrentBorrowingCapacity   $ 40,000,000us-gaap_LineOfCreditFacilityCurrentBorrowingCapacity $ 19,500,000us-gaap_LineOfCreditFacilityCurrentBorrowingCapacity        
Credit Facility, Current   23,500,000us-gaap_LinesOfCreditCurrent   23,000,000us-gaap_LinesOfCreditCurrent          
First Amendment | Rantoul Partners                  
Debt Instrument [Line Items]                  
Line of credit facility, maximum borrowing capacity           50,000,000us-gaap_LineOfCreditFacilityMaximumBorrowingCapacity
/ us-gaap_CreditFacilityAxis
= enrj_FirstAmendmentMember
/ dei_LegalEntityAxis
= enrj_RantoulPartnersMember
     
Second Amendment                  
Debt Instrument [Line Items]                  
Line of credit facility, maximum borrowing capacity             7,000,000us-gaap_LineOfCreditFacilityMaximumBorrowingCapacity
/ us-gaap_CreditFacilityAxis
= enrj_SecondAmendmentMember
   
Second Amendment | Minimum                  
Debt Instrument [Line Items]                  
Debt Instrument, Interest Rate, Stated Percentage             3.75%us-gaap_DebtInstrumentInterestRateStatedPercentage
/ us-gaap_CreditFacilityAxis
= enrj_SecondAmendmentMember
/ us-gaap_RangeAxis
= us-gaap_MinimumMember
   
Third Amendment                  
Debt Instrument [Line Items]                  
Line of credit facility, maximum borrowing capacity               12,150,000us-gaap_LineOfCreditFacilityMaximumBorrowingCapacity
/ us-gaap_CreditFacilityAxis
= enrj_ThirdAmendmentMember
 
Fifth Amendment                  
Debt Instrument [Line Items]                  
Line of credit facility, maximum borrowing capacity     100,000,000us-gaap_LineOfCreditFacilityMaximumBorrowingCapacity
/ us-gaap_CreditFacilityAxis
= enrj_FifthAmendmentMember
           
Line of credit facility, current borrowing capacity     38,000,000us-gaap_LineOfCreditFacilityCurrentBorrowingCapacity
/ us-gaap_CreditFacilityAxis
= enrj_FifthAmendmentMember
           
Seventh Amendment | Series A Cumulative Redeemable Perpetual Preferred Stock                  
Debt Instrument [Line Items]                  
Preferred Stock, Dividend Rate, Percentage 10.00%us-gaap_PreferredStockDividendRatePercentage
/ us-gaap_CreditFacilityAxis
= enrj_SevenamendmentmemberMember
/ us-gaap_StatementClassOfStockAxis
= enrj_SeriesCumulativeRedeemablePerpetualPreferredStockMember
               
Preferred Stock Shares Issued 850,000us-gaap_PreferredStockSharesIssued
/ us-gaap_CreditFacilityAxis
= enrj_SevenamendmentmemberMember
/ us-gaap_StatementClassOfStockAxis
= enrj_SeriesCumulativeRedeemablePerpetualPreferredStockMember
               
Eight Amendment                  
Debt Instrument [Line Items]                  
Line of credit facility, current borrowing capacity                 750,000us-gaap_LineOfCreditFacilityCurrentBorrowingCapacity
/ us-gaap_CreditFacilityAxis
= enrj_EightAmendmentMember
Line of Credit | Federal Funds Rate                  
Debt Instrument [Line Items]                  
Debt instrument interest rate, margin   0.50%us-gaap_DebtInstrumentBasisSpreadOnVariableRate1
/ us-gaap_DebtInstrumentAxis
= enrj_FederalFundsRateMember
/ us-gaap_LongtermDebtTypeAxis
= us-gaap_LineOfCreditMember
             
Line of Credit | Base Rate | Minimum                  
Debt Instrument [Line Items]                  
Debt instrument interest rate, margin   0.00%us-gaap_DebtInstrumentBasisSpreadOnVariableRate1
/ us-gaap_DebtInstrumentAxis
= us-gaap_BaseRateMember
/ us-gaap_LongtermDebtTypeAxis
= us-gaap_LineOfCreditMember
/ us-gaap_RangeAxis
= us-gaap_MinimumMember
             
Line of Credit | Base Rate | Maximum                  
Debt Instrument [Line Items]                  
Debt instrument interest rate, margin   0.75%us-gaap_DebtInstrumentBasisSpreadOnVariableRate1
/ us-gaap_DebtInstrumentAxis
= us-gaap_BaseRateMember
/ us-gaap_LongtermDebtTypeAxis
= us-gaap_LineOfCreditMember
/ us-gaap_RangeAxis
= us-gaap_MaximumMember
             
Line of Credit | Floating Rate | Minimum                  
Debt Instrument [Line Items]                  
Debt instrument interest rate, margin   2.25%us-gaap_DebtInstrumentBasisSpreadOnVariableRate1
/ us-gaap_DebtInstrumentAxis
= enrj_FloatingRateMember
/ us-gaap_LongtermDebtTypeAxis
= us-gaap_LineOfCreditMember
/ us-gaap_RangeAxis
= us-gaap_MinimumMember
             
Line of Credit | Floating Rate | Maximum                  
Debt Instrument [Line Items]                  
Debt instrument interest rate, margin   3.00%us-gaap_DebtInstrumentBasisSpreadOnVariableRate1
/ us-gaap_DebtInstrumentAxis
= enrj_FloatingRateMember
/ us-gaap_LongtermDebtTypeAxis
= us-gaap_LineOfCreditMember
/ us-gaap_RangeAxis
= us-gaap_MaximumMember
             
Line of Credit | Fifth Amendment | Federal Funds Rate                  
Debt Instrument [Line Items]                  
Debt instrument interest rate, margin     3.30%us-gaap_DebtInstrumentBasisSpreadOnVariableRate1
/ us-gaap_CreditFacilityAxis
= enrj_FifthAmendmentMember
/ us-gaap_DebtInstrumentAxis
= enrj_FederalFundsRateMember
/ us-gaap_LongtermDebtTypeAxis
= us-gaap_LineOfCreditMember
           
Long-Term Debt                  
Debt Instrument [Line Items]                  
Credit Facility   4,928us-gaap_LongTermLineOfCredit
/ us-gaap_LongtermDebtTypeAxis
= us-gaap_LongTermDebtMember
             
Debt Instrument, Interest Rate, Stated Percentage       3.30%us-gaap_DebtInstrumentInterestRateStatedPercentage
/ us-gaap_LongtermDebtTypeAxis
= us-gaap_LongTermDebtMember
         
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Stock Options
3 Months Ended
Mar. 31, 2015
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]  
Stock Options
Note 2 - Stock Options
 
A summary of stock options is as follows:
 
 
 
Options
 
Weighted
Avg.
Exercise
Price
 
Warrants
 
Weighted
Avg.
Exercise
Price
 
Outstanding December 31, 2014
 
 
231,332
 
$
9.33
 
 
-
 
$
-
 
Granted
 
 
67,332
 
 
9.85
 
 
-
 
 
-
 
Cancelled
 
 
-
 
 
-
 
 
-
 
 
-
 
Exercised
 
 
-
 
 
-
 
 
-
 
 
-
 
Outstanding March 31, 2015
 
 
298,664
 
$
9.45
 
 
-
 
$
-
 
XML 27 R3.htm IDEA: XBRL DOCUMENT v2.4.1.9
Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
Mar. 31, 2015
Dec. 31, 2014
Common stock, par value $ 0.001us-gaap_CommonStockParOrStatedValuePerShare $ 0.001us-gaap_CommonStockParOrStatedValuePerShare
Common stock, shares authorized 250,000,000us-gaap_CommonStockSharesAuthorized 250,000,000us-gaap_CommonStockSharesAuthorized
Common stock, shares issued 8,406,661us-gaap_CommonStockSharesIssued 7,643,114us-gaap_CommonStockSharesIssued
Common stock, shares outstanding 8,406,661us-gaap_CommonStockSharesOutstanding 7,643,114us-gaap_CommonStockSharesOutstanding
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment $ 2,005,467us-gaap_AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment $ 1,945,607us-gaap_AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment
Properties using full-cost accounting $ 14,501,249us-gaap_MineralPropertiesAccumulatedDepletion $ 13,827,347us-gaap_MineralPropertiesAccumulatedDepletion
10% Series A Cumulative Redeemable Preferred Stock [Member]    
Preferred stock, par value $ 0.001us-gaap_PreferredStockParOrStatedValuePerShare
/ us-gaap_StatementClassOfStockAxis
= us-gaap_SeriesAPreferredStockMember
$ 0.001us-gaap_PreferredStockParOrStatedValuePerShare
/ us-gaap_StatementClassOfStockAxis
= us-gaap_SeriesAPreferredStockMember
Preferred stock, shares authorized 25,000,000us-gaap_PreferredStockSharesAuthorized
/ us-gaap_StatementClassOfStockAxis
= us-gaap_SeriesAPreferredStockMember
25,000,000us-gaap_PreferredStockSharesAuthorized
/ us-gaap_StatementClassOfStockAxis
= us-gaap_SeriesAPreferredStockMember
Preferred stock, shares issued 751,815us-gaap_PreferredStockSharesIssued
/ us-gaap_StatementClassOfStockAxis
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751,815us-gaap_PreferredStockSharesIssued
/ us-gaap_StatementClassOfStockAxis
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Preferred Stock Shares Outstanding 751,815us-gaap_PreferredStockSharesOutstanding
/ us-gaap_StatementClassOfStockAxis
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751,815us-gaap_PreferredStockSharesOutstanding
/ us-gaap_StatementClassOfStockAxis
= us-gaap_SeriesAPreferredStockMember
Series B Convertable Preferred Stock [Member]    
Preferred stock, par value $ 0.001us-gaap_PreferredStockParOrStatedValuePerShare
/ us-gaap_StatementClassOfStockAxis
= us-gaap_SeriesBPreferredStockMember
$ 0.001us-gaap_PreferredStockParOrStatedValuePerShare
/ us-gaap_StatementClassOfStockAxis
= us-gaap_SeriesBPreferredStockMember
Preferred stock, shares authorized 1,764us-gaap_PreferredStockSharesAuthorized
/ us-gaap_StatementClassOfStockAxis
= us-gaap_SeriesBPreferredStockMember
 
Preferred stock, shares issued 1,764us-gaap_PreferredStockSharesIssued
/ us-gaap_StatementClassOfStockAxis
= us-gaap_SeriesBPreferredStockMember
 
Preferred Stock Shares Outstanding 1,764us-gaap_PreferredStockSharesOutstanding
/ us-gaap_StatementClassOfStockAxis
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XML 28 R17.htm IDEA: XBRL DOCUMENT v2.4.1.9
Fair Value Measurements (Tables)
3 Months Ended
Mar. 31, 2015
Fair Value Measurements [Abstract]  
Variable to Fixed Price Commodity Swaps Derivative Instruments
Our derivative instruments consist of fixed price commodity swaps.
 
 
 
Fair Value Measurement
 
 
 
Level 1
 
Level 2
 
Level 3
 
Crude oil contracts
 
$
-
 
$
4,194,738
 
$
-
 
Marketable Securities
 
$
-
 
$
-
 
$
1,018,573
 
XML 29 R1.htm IDEA: XBRL DOCUMENT v2.4.1.9
Document And Entity Information
3 Months Ended
Mar. 31, 2015
May 15, 2015
Document Information [Line Items]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Mar. 31, 2015  
Document Fiscal Year Focus 2015  
Document Fiscal Period Focus Q1  
Entity Registrant Name EnerJex Resources, Inc.  
Entity Central Index Key 0000008504  
Current Fiscal Year End Date --12-31  
Entity Filer Category Smaller Reporting Company  
Trading Symbol ENRJ  
Entity Common Stock, Shares Outstanding   8,406,661dei_EntityCommonStockSharesOutstanding
XML 30 R18.htm IDEA: XBRL DOCUMENT v2.4.1.9
Asset Retirement Obligation (Tables)
3 Months Ended
Mar. 31, 2015
Asset Retirement Obligation [Abstract]  
Changes in Asset Retirement Obligations
The following shows the changes in asset retirement obligations:
  
Asset retirement obligations, December 31, 2014
 
$
2,906,093
 
Liabilities incurred during the period
 
 
-
 
Accretion
 
 
70,984
 
Liabilities settled during the quarter
 
 
(2,244)
 
Asset retirement obligations, March 31, 2015
 
$
2,974,833
 
XML 31 R4.htm IDEA: XBRL DOCUMENT v2.4.1.9
Condensed Consolidated Statements of Operations (USD $)
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Oil revenues $ 1,380,646us-gaap_OilAndGasSalesRevenue $ 3,612,579us-gaap_OilAndGasSalesRevenue
Natural gas revenues 117,195us-gaap_NaturalGasProductionRevenue 242,398us-gaap_NaturalGasProductionRevenue
Total revenues 1,497,841us-gaap_OilAndGasRevenue 3,854,977us-gaap_OilAndGasRevenue
Expenses:    
Direct operating costs 1,267,301us-gaap_DirectOperatingCosts 1,531,907us-gaap_DirectOperatingCosts
Depreciation, depletion and amortization 745,608us-gaap_DepreciationDepletionAndAmortization 763,758us-gaap_DepreciationDepletionAndAmortization
Impairment of oil and gas properties 16,401,376us-gaap_ImpairmentOfOilAndGasProperties 0us-gaap_ImpairmentOfOilAndGasProperties
Professional fees 253,729us-gaap_ProfessionalFees 224,902us-gaap_ProfessionalFees
Salaries 521,287us-gaap_SalariesAndWages 310,348us-gaap_SalariesAndWages
Administrative expense 230,740us-gaap_GeneralAndAdministrativeExpense 141,029us-gaap_GeneralAndAdministrativeExpense
Total expenses 19,420,041us-gaap_CostsAndExpenses 2,971,944us-gaap_CostsAndExpenses
Income (loss) from operations (17,922,200)us-gaap_OperatingIncomeLoss 883,033us-gaap_OperatingIncomeLoss
Other income (expense):    
Interest expense (309,496)us-gaap_InterestExpense (378,928)us-gaap_InterestExpense
Derivative losses (217,522)us-gaap_GainLossOnDerivativeInstrumentsNetPretax (404,353)us-gaap_GainLossOnDerivativeInstrumentsNetPretax
Other income 1,094,657us-gaap_OtherNonoperatingIncomeExpense 3,882us-gaap_OtherNonoperatingIncomeExpense
Total other income (expense) 567,639us-gaap_NonoperatingIncomeExpense (779,399)us-gaap_NonoperatingIncomeExpense
Net income (loss) (17,354,561)us-gaap_NetIncomeLoss 103,634us-gaap_NetIncomeLoss
Net income (loss) (17,354,561)us-gaap_NetIncomeLoss 103,634us-gaap_NetIncomeLoss
Preferred dividends (407,088)us-gaap_PreferredStockDividendsIncomeStatementImpact (399,447)us-gaap_PreferredStockDividendsIncomeStatementImpact
Net income (loss) attributable to common stockholders $ (17,761,649)us-gaap_NetIncomeLossAvailableToCommonStockholdersBasic $ (295,813)us-gaap_NetIncomeLossAvailableToCommonStockholdersBasic
Net income (loss) per share basic and diluted $ (2.28)us-gaap_EarningsPerShareDiluted $ (0.04)us-gaap_EarningsPerShareDiluted
Weighted average shares 7,795,823us-gaap_WeightedAverageNumberOfSharesOutstandingBasic 7,293,877us-gaap_WeightedAverageNumberOfSharesOutstandingBasic
XML 32 R12.htm IDEA: XBRL DOCUMENT v2.4.1.9
Commitments and Contingencies
3 Months Ended
Mar. 31, 2015
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
Note 7 – Commitments & Contingencies
 
As of March 31, 2015, the Company has an outstanding irrevocable letter of credit in the amount of $50,000 issued in favor of the Texas Railroad Commission. The letter of credit is required by the Texas Railroad Commission for all companies operating in the state of Texas with production greater than limits they prescribe.
 
Rent expense for the three months ended March 31, 2015 and 2014 was approximately $43,000 and $51,000 respectively. Future non-cancellable minimum lease payments are approximately $120,000 for the remainder of 2015, $147,000 for 2016, $145,000 for 2017, $91,000 for  2018 and $77,000 for 2019. 
XML 33 R11.htm IDEA: XBRL DOCUMENT v2.4.1.9
Long-Term Debt
3 Months Ended
Mar. 31, 2015
Long-Term Debt [Abstract]  
Long-Term Debt
Note 6 - Long-Term Debt
 
Senior Secured Credit Facility
 
 On October 3, 2011, the Company and DD Energy, Inc., EnerJex Kansas, Inc., Black Sable Energy, LLC and Working Interest, LLC ("Borrowers") entered into an Amended and Restated Credit Agreement with Texas Capital Bank, N.A. (the “Bank”) and other financial institutions and banks that may become a party to the Credit Agreement from time to time. The facilities provided under the Amended and Restated Credit Agreement were to be used to refinance Borrowers prior outstanding revolving loan facility with Bank, dated July 3, 2008, and for working capital and general corporate purposes. 
 
At our option, loans under the facility will bear stated interest based on the Base Rate plus Base Rate Margin, or Floating Rate plus Floating Rate Margin (as those terms are defined in the Credit Agreement). The Base Rate will be, for any day, a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 0.50% and (b) the Bank's prime rate. The Floating Rate shall mean, at Borrower's option, a per annum interest rate equal to (i) the Eurodollar Rate plus Eurodollar Margin, or (ii) the Base Rate plus Base Rate Margin (as those terms are defined in the Amended and Restated Credit Agreement). Eurodollar borrowings may be for one, two, three, or six months, as selected by the Borrowers. The margins for all loans are based on a pricing grid ranging from 0.00% to 0.75% for the Base Rate Margin and 2.25% to 3.00% for the Floating Rate Margin based on the Company's Borrowing Base Utilization Percentage (as defined in the Amended and Restated Credit Agreement). 
 
On December 15, 2011, we entered into a First Amendment to Amended and Restated Credit Agreement and Second Amended and Restated Promissory Note in the amount of $50,000,000 with the Bank. The Amendment reflected the addition of Rantoul Partners as an additional Borrower and added as additional security for the loans the assets held by Rantoul Partners. 
 
On August 31, 2012, we entered into a Second Amendment to Amended and Restated Credit Agreement with the Bank. The Second Amendment: (i) increased our borrowing base to $7,000,000, (ii) reduced the minimum interest rate to 3.75%, and (iii) added additional new leases as collateral for the loan. 
 
On November 2, 2012, we entered into a Third Amendment to Amended and Restated Credit Agreement with the Bank. The Third Amendment (i) increased our borrowing base to $12,150,000, and (ii) clarified certain continuing covenants and provided a limited waiver of compliance with one of the covenants so clarified for the quarter ended December 31, 2011. 
 
On January 24, 2013, we entered into a Fourth Amendment to Amended and Restated Credit Agreement, which was made effective as of December 31, 2012 with the Bank.  The Fourth Amendment reflects the following changes: (i) the Bank consented to the restructuring transactions related to the dissolution of Rantoul Partners, and (ii) the Bank terminated a Limited Guaranty, as defined in the Credit Agreement, executed by Rantoul Partners in favor of the Bank. 
 
On April 16, 2013, the Bank increased our borrowing base to $19.5 million. 
 
On September 30, 2013, we entered into a Fifth Amendment to the Amended and Restated Credit Agreement.  The Fifth Amendment reflects the following changes:  (i) expanded principal commitment amount of the Bank to $100,000,000, (ii) increased the Borrowing Base to $38,000,000, (iii) added Black Raven Energy, Inc. to the Credit Agreement as a borrower party, (iv) added certain collateral and security interests in favor of the Bank, and (v) reduced the Company’s current interest rate to 3.30%.   
 
On November 19, 2013, we entered into a Sixth Amendment to the Amended and Restated Credit Agreement. The Sixth Amendment reflects the following changes: (i) added Iberia Bank as a participant into our credit facility, and (ii) a technical correction to our covenant calculations.
 
On May 22, 2014, we entered into a Seventh Amendment to the Amended and Restated Credit Agreement. The Seventh Amendment reflects the Bank’s consent to our issuance of up to 850,000 shares of our 10% Series A Cumulative Redeemable Perpetual Preferred Stock.
 
On August 15, 2014, we entered into an Eighth Amendment to the Amended and Restated Credit Agreement. The Eighth Amendment reflects the following changes: (i) the borrowing base was increased from $38 million to $40 million, and (ii) the maturity of the facility was extended by three years to October 3, 2018.
 
Our borrowing base at March 31, 2015 and December 31, 2014 was $40 million, of which we had borrowed $23.5 million and $23 million respectively. For the three month period ended March 31, 2015 and for the year ended December 31, 2014 the interest rate was 3.3%. This facility expires on October 3, 2018. 
 
Other Long Term Debt
 
We financed the purchase of vehicles through a bank.  The notes are for four years and the vehicles collateralize these notes. The long term balance on the notes at March 31, 2015 was $4,928.  
XML 34 R23.htm IDEA: XBRL DOCUMENT v2.4.1.9
Derivative Instruments (Derivative Contracts) (Detail) (USD $)
3 Months Ended
Mar. 31, 2015
Derivative [Line Items]  
Fair Value 4,194,738us-gaap_DerivativeFairValueOfDerivativeNet
Deferred premium put | Derivative Instrument 1  
Derivative [Line Items]  
Monthly Volumes Bbls 9,000us-gaap_ProvedDevelopedReservesVolume
/ us-gaap_DerivativeByNatureAxis
= enrj_DerivativeInstrumentOneMember
/ us-gaap_DerivativeInstrumentRiskAxis
= enrj_DeferredPremiumPutMember
Price/bbl 85.00us-gaap_DerivativeAverageForwardPrice
/ us-gaap_DerivativeByNatureAxis
= enrj_DerivativeInstrumentOneMember
/ us-gaap_DerivativeInstrumentRiskAxis
= enrj_DeferredPremiumPutMember
Fair Value 1,256,288us-gaap_DerivativeFairValueOfDerivativeNet
/ us-gaap_DerivativeByNatureAxis
= enrj_DerivativeInstrumentOneMember
/ us-gaap_DerivativeInstrumentRiskAxis
= enrj_DeferredPremiumPutMember
Deferred premium put | Minimum | Derivative Instrument 1  
Derivative [Line Items]  
Term 2016-01
Deferred premium put | Maximum | Derivative Instrument 1  
Derivative [Line Items]  
Term 2016-06
Crude Oil Swap | Derivative Instrument 2  
Derivative [Line Items]  
Monthly Volumes Bbls 5,800us-gaap_ProvedDevelopedReservesVolume
/ us-gaap_DerivativeByNatureAxis
= enrj_DerivativeInstrumentTwoMember
/ us-gaap_DerivativeInstrumentRiskAxis
= enrj_CrudeOilPriceSwapMember
Price/bbl 88.55us-gaap_DerivativeAverageForwardPrice
/ us-gaap_DerivativeByNatureAxis
= enrj_DerivativeInstrumentTwoMember
/ us-gaap_DerivativeInstrumentRiskAxis
= enrj_CrudeOilPriceSwapMember
Fair Value 1,879,490us-gaap_DerivativeFairValueOfDerivativeNet
/ us-gaap_DerivativeByNatureAxis
= enrj_DerivativeInstrumentTwoMember
/ us-gaap_DerivativeInstrumentRiskAxis
= enrj_CrudeOilPriceSwapMember
Crude Oil Swap | Derivative Instrument 3  
Derivative [Line Items]  
Monthly Volumes Bbls 3,000us-gaap_ProvedDevelopedReservesVolume
/ us-gaap_DerivativeByNatureAxis
= enrj_DerivativeInstrumentThreeMember
/ us-gaap_DerivativeInstrumentRiskAxis
= enrj_CrudeOilPriceSwapMember
Price/bbl 83.70us-gaap_DerivativeAverageForwardPrice
/ us-gaap_DerivativeByNatureAxis
= enrj_DerivativeInstrumentThreeMember
/ us-gaap_DerivativeInstrumentRiskAxis
= enrj_CrudeOilPriceSwapMember
Fair Value 841,200us-gaap_DerivativeFairValueOfDerivativeNet
/ us-gaap_DerivativeByNatureAxis
= enrj_DerivativeInstrumentThreeMember
/ us-gaap_DerivativeInstrumentRiskAxis
= enrj_CrudeOilPriceSwapMember
Crude Oil Swap | Derivative Instrument 4  
Derivative [Line Items]  
Monthly Volumes Bbls 1,000us-gaap_ProvedDevelopedReservesVolume
/ us-gaap_DerivativeByNatureAxis
= enrj_DerivativeInstrumentFourMember
/ us-gaap_DerivativeInstrumentRiskAxis
= enrj_CrudeOilPriceSwapMember
Price/bbl 76.74us-gaap_DerivativeAverageForwardPrice
/ us-gaap_DerivativeByNatureAxis
= enrj_DerivativeInstrumentFourMember
/ us-gaap_DerivativeInstrumentRiskAxis
= enrj_CrudeOilPriceSwapMember
Fair Value 217,760us-gaap_DerivativeFairValueOfDerivativeNet
/ us-gaap_DerivativeByNatureAxis
= enrj_DerivativeInstrumentFourMember
/ us-gaap_DerivativeInstrumentRiskAxis
= enrj_CrudeOilPriceSwapMember
Crude Oil Swap | Minimum | Derivative Instrument 2  
Derivative [Line Items]  
Term 2015-01
Crude Oil Swap | Minimum | Derivative Instrument 3  
Derivative [Line Items]  
Term 2011-07
Crude Oil Swap | Minimum | Derivative Instrument 4  
Derivative [Line Items]  
Term 2012-07
Crude Oil Swap | Maximum | Derivative Instrument 2  
Derivative [Line Items]  
Term 2015-12
Crude Oil Swap | Maximum | Derivative Instrument 3  
Derivative [Line Items]  
Term 2015-12
Crude Oil Swap | Maximum | Derivative Instrument 4  
Derivative [Line Items]  
Term 2015-12
XML 35 R19.htm IDEA: XBRL DOCUMENT v2.4.1.9
Derivative Instruments (Tables)
3 Months Ended
Mar. 31, 2015
Derivative Instruments [Abstract]  
Derivative Contracts
The following derivative contracts were in place at March 31, 2015:
 
 
 
Term
 
Monthly Volumes
 
Price/Bbl
 
Fair Value
 
Deferred premium put
 
1/16-6/16
 
9,000 Bbls
 
$
85.00
 
 
1,256,288
 
Crude oil swap
 
1/15-12/15
 
5,800 Bbls
 
$
88.55
 
 
1,879,490
 
Crude oil swap
 
7/11-12/15
 
3,000 Bbls
 
$
83.70
 
 
841,200
 
Crude oil swap
 
7/12-12/15
 
1,000 Bbls
 
$
76.74
 
 
217,760
 
 
 
 
 
 
 
 
 
 
$
4,194,738
 
XML 36 R15.htm IDEA: XBRL DOCUMENT v2.4.1.9
Subsequent Events
3 Months Ended
Mar. 31, 2015
Subsequent Events [Abstract]  
Subsequent Events
Note 10 - Subsequent Events
 
We have reviewed all material events through the date of this report in accordance with ASC 855-10.
 
On April 15, 2015, The Company announced that Oakridge Energy, Inc. (“Oakridge”) completed the sale of its La Plata County, Colorado real estate at a sales price that is expected to generate for EnerJex a cash distribution of approximately $1.75 million. Oakridge announced plans to distribute the after-tax net proceeds from the sale, within the next 60 to 90 days, to its shareholders of record as of April 9, 2015. As of the record date for that distribution, EnerJex owned approximately 15.9% of Oakridge's issued and outstanding shares.
 
On April 28, 2015, the Company entered into six deferred premium put contracts with BP Energy Company for the six month period ending December 31, 2016. Each contract entitles the Company to sell 5,000 barrels of crude oil at $60.00. A premium of $5.72 per barrel will be paid by the Company at the expiration or settlement of the contract.
 
On April 29, 2015, the Borrowers entered into a Ninth Amendment to Amended and Restated Credit Agreement (the "Ninth Amendment") with the Banks. In the Ninth Amendment, the Banks (i) reduced the borrowing base from $40 million to $22.6 million, (ii) imposed affirmative obligations on the Borrowers to use a portion of proceeds received with regard to future sales of securities, or distributions received with regard to securities held, to repay the loan, (iii) consented to non-compliance by Borrowers with certain terms of the Credit Agreement, (iv) waived certain provisions of the Credit Agreement, and (v) agreed to certain other amendments to the Credit Agreement.
 
On May 1, 2015, the Borrowers and the Banks entered into a Letter Agreement (the “Letter Agreement”) to clarify that up to $1,000,000 in proceeds from any potential future securities offering will be unencumbered by the Banks’ Liens as described in the Credit Agreement through November 1, 2015, and that, until November 1, 2015, such proceeds shall not be subject to certain provisions in the Credit Agreement prohibiting the Company from declaring and paying dividends that may be due and payable to holders of securities issued in such potential offerings or issued prior to the Letter Agreement.
 
On May 13, 2015 the Company sold 183,433 shares of its 10% Series A Cumulative Redeemable Perpetual Preferred Stock at $12.50 per share for gross proceeds of  approximately $2.3 million. The Company intends to use the net proceeds of this offering for general corporate purposes, including capital expenditures, working capital, preferred stock dividends, and repayment of outstanding borrowings under its senior credit facility.
 
The offering was made pursuant to a registration statement on Form S-3 (File No. 333-199030) previously filed and declared effective by the U.S. Securities and Exchange Commission (SEC).
XML 37 R13.htm IDEA: XBRL DOCUMENT v2.4.1.9
Equity Transactions
3 Months Ended
Mar. 31, 2015
Equity [Abstract]  
Equity Transactions
Note 8 - Equity Transactions
 
 On January 15, 2015, 67,332 options were issued to employees and directors. 
 
On March 13, 2015 the Company issued in a registered offering 763,547 registered shares of its common stock together with 1,242.17099 shares of its newly designated Series B Convertible Preferred Stock (the "Preferred Stock") convertible into 709,812 shares of common stock. We also issued in an unregistered offering, 521.62076 shares of Preferred Stock convertible into 298,069 shares of common stock, and warrants to purchase 1,771,428 shares of its common stock. The shareholder’s ability to convert a portion of the Preferred Stock and to exercise the warrant are restricted: (i) prior to the Company obtaining approval of the offering by its shareholders, which we expect to obtain before May 31, 2015, and (ii) pursuant to customary “blocker” provisions restricting the investor’s ownership to 9.99% of our outstanding common stock.
 
The Preferred Stock has a liquidation preference of $1,000 per share, and will be convertible at the option of the shareholder at a conversion ratio equal to approximately 571 shares of common stock for each one (1) share of Preferred Stock, subject to customary adjustments and anti-dilution price protection. Dividends are payable on the shares of Preferred Stock only if and to the extent that dividends are payable on the common stock into which the Preferred Stock is convertible. The Preferred Stock has no maturity date and can be redeemed by the Company beginning twelve months after the closing of the offering or upon a change of control. Each warrant will be exercisable for one share of common stock, for a period of five years beginning six months after March 13, 2015, at a cash exercise price of $2.75 per share, and may be exercised on a cashless basis after that six-month period if no effective registration statement covers the warrant shares by that time.   
XML 38 R14.htm IDEA: XBRL DOCUMENT v2.4.1.9
Impairment of Oil and Gas Properties
3 Months Ended
Mar. 31, 2015
Oil and Gas Exploration and Production Industries Disclosures [Abstract]  
Impairment of Oil and Gas Properties
Note 9 – Impairment of Oil and Gas Properties
 
Pursuant to full cost accounting rules, the Company must perform a ceiling test each quarter on its proved oil and natural gas assets within each separate cost center. All of the Company’s costs are included in one cost center because all of the Company’s operations are located in the United States. The Company’s ceiling test was calculated using trailing twelve-month, unweighted-average first-day-of-the-month prices for oil and natural gas as of March 31, 2015, which were based on a West Texas Intermediate oil price of $78.82 per Bbl and a Henry Hub natural gas price of $3.74 per MMBtu (adjusted for basis and quality differentials), respectively. Utilizing these prices, the calculated ceiling amount was less than the net capitalized cost of oil and natural gas properties as of March 31, 2015, and as a result, a pre-tax write-down of $16.4 million was recorded at March 31, 2015. Additional material write-downs of the Company’s oil and gas properties could occur in subsequent quarters in the event that oil and natural gas prices remain at current levels, or if the Company experiences significant downward adjustments to its estimated proved reserves. 
 
We follow the full-cost method of accounting under which all costs associated with property acquisition, exploration and development activities are capitalized. We also capitalize internal costs that can be directly identified with our acquisition, exploration and development activities and do not include costs related to production, general corporate overhead or similar activities. 
 
Proved properties are amortized using the units of production method (UOP). Currently we only have operations in the Unites States of America. The UOP calculation multiplies the percentage of estimated proved reserves produced each quarter by the cost of these reserves. The amortization base in the UOP calculation includes the sum of proved property, net of accumulated depreciation, depletion and amortization (DD&A), estimated future development costs (future costs to access and develop proved reserves) and asset retirement costs, less related salvage value. 
 
The cost of unproved properties are excluded from the amortization calculation until it is determined whether or not proved reserves can be assigned to such properties or until development projects are placed into service. Geological and geophysical costs not associated with specific properties are recorded as proved property immediately. Unproved properties are reviewed for impairment quarterly. 
 
Under the full cost method of accounting, the net book value of oil and gas properties, less deferred income taxes, may not exceed a calculated “ceiling.” The ceiling limitation is (a) the present value of future net revenues computed by applying current prices of oil & gas reserves (with consideration of price changes only to the extent provided by contractual arrangements) to estimated future production of proved oil & gas reserves as of the date of the latest balance sheet presented, less estimated future expenditures (based on current costs) to be incurred in developing and producing the proved reserves computed using a discount factor of 10 percent and assuming continuation of existing economic conditions plus (b) the cost of properties not being amortized plus (c) the lower of cost or estimated fair value of unproven properties included in the costs being amortized less (d) income tax effects related to differences between book and tax basis of properties. Future cash outflows associated with settling accrued retirement obligations are excluded from the calculation. Estimated future cash flows are calculated using end-of-period costs and an unweighted arithmetic average of commodity prices in effect on the first day of each of the previous 12 months held flat for the life of the production, except where prices are defined by contractual arrangements.
XML 39 R16.htm IDEA: XBRL DOCUMENT v2.4.1.9
Stock Options (Tables)
3 Months Ended
Mar. 31, 2015
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]  
Summary of Stock Options
A summary of stock options is as follows:
 
 
 
Options
 
Weighted
Avg.
Exercise
Price
 
Warrants
 
Weighted
Avg.
Exercise
Price
 
Outstanding December 31, 2014
 
 
231,332
 
$
9.33
 
 
-
 
$
-
 
Granted
 
 
67,332
 
 
9.85
 
 
-
 
 
-
 
Cancelled
 
 
-
 
 
-
 
 
-
 
 
-
 
Exercised
 
 
-
 
 
-
 
 
-
 
 
-
 
Outstanding March 31, 2015
 
 
298,664
 
$
9.45
 
 
-
 
$
-
 
XML 40 R21.htm IDEA: XBRL DOCUMENT v2.4.1.9
Fair Value Measurements (Variable to Fixed Price Commodity Swaps Derivative Instruments) (Detail) (USD $)
Mar. 31, 2015
Fair Value, Inputs, Level 1  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Crude oil contracts $ 0us-gaap_DerivativeLiabilities
/ us-gaap_FairValueByFairValueHierarchyLevelAxis
= us-gaap_FairValueInputsLevel1Member
Marketable Securities 0us-gaap_InvestmentsFairValueDisclosure
/ us-gaap_FairValueByFairValueHierarchyLevelAxis
= us-gaap_FairValueInputsLevel1Member
Fair Value, Inputs, Level 2  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Crude oil contracts 4,194,738us-gaap_DerivativeLiabilities
/ us-gaap_FairValueByFairValueHierarchyLevelAxis
= us-gaap_FairValueInputsLevel2Member
Marketable Securities 0us-gaap_InvestmentsFairValueDisclosure
/ us-gaap_FairValueByFairValueHierarchyLevelAxis
= us-gaap_FairValueInputsLevel2Member
Fair Value, Inputs, Level 3  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Crude oil contracts 0us-gaap_DerivativeLiabilities
/ us-gaap_FairValueByFairValueHierarchyLevelAxis
= us-gaap_FairValueInputsLevel3Member
Marketable Securities $ 1,018,573us-gaap_InvestmentsFairValueDisclosure
/ us-gaap_FairValueByFairValueHierarchyLevelAxis
= us-gaap_FairValueInputsLevel3Member
XML 41 R26.htm IDEA: XBRL DOCUMENT v2.4.1.9
Equity Transactions - Additional Information (Detail) (USD $)
0 Months Ended 3 Months Ended
Jan. 15, 2015
Mar. 31, 2015
Stock Issued During Period, Shares, Issued for Services 67,332us-gaap_StockIssuedDuringPeriodSharesIssuedForServices  
Restricted Ownership Percentage   9.99%enrj_RestrictedOwnershipPercentage
Stock and Warrants Issued During Period, Value, Preferred Stock and Warrants   $ 1,771,428us-gaap_StockAndWarrantsIssuedDuringPeriodValuePreferredStockAndWarrants
Preferred Stock, Liquidation Preference Per Share   $ 1,000us-gaap_PreferredStockLiquidationPreference
Convertible Preferred Stock, Shares Issued upon Conversion   571us-gaap_ConvertiblePreferredStockSharesIssuedUponConversion
Class of Warrant or Right, Exercise Price of Warrants or Rights   $ 2.75us-gaap_ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1
Registered Shares [Member]    
Shares Issuable Upon Conversion Of Preferred stock   709,812enrj_SharesIssuableUponConversionOfPreferredStock
/ us-gaap_OptionIndexedToIssuersEquityEquityAxis
= enrj_RegisteredSharesMember
Registered Shares [Member] | Common Stock [Member]    
Stock Issued During Period, Shares, New Issues   763,547us-gaap_StockIssuedDuringPeriodSharesNewIssues
/ us-gaap_OptionIndexedToIssuersEquityEquityAxis
= enrj_RegisteredSharesMember
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
Unregistered Shares [Member]    
Shares Issuable Upon Conversion Of Preferred stock   298,069enrj_SharesIssuableUponConversionOfPreferredStock
/ us-gaap_OptionIndexedToIssuersEquityEquityAxis
= enrj_UnregisteredSharesMember
Convertible Preferred Stock [Member] | Unregistered Shares [Member]    
Stock Issued During Period, Shares, New Issues   521.62076us-gaap_StockIssuedDuringPeriodSharesNewIssues
/ us-gaap_OptionIndexedToIssuersEquityEquityAxis
= enrj_UnregisteredSharesMember
/ us-gaap_StatementClassOfStockAxis
= us-gaap_ConvertiblePreferredStockMember
Series B Convertable Preferred Stock [Member]    
Stock Issued During Period, Shares, New Issues   1,242.17099us-gaap_StockIssuedDuringPeriodSharesNewIssues
/ us-gaap_StatementClassOfStockAxis
= us-gaap_SeriesBPreferredStockMember
XML 42 R5.htm IDEA: XBRL DOCUMENT v2.4.1.9
Condensed Consolidated Statements of Cash Flows (USD $)
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Cash flows from operating activities    
Net income (loss) $ (17,354,561)us-gaap_NetIncomeLoss $ 103,634us-gaap_NetIncomeLoss
Depreciation, depletion and amortization 745,608enrj_AdjustmentDepreciationAndDepletion 763,758enrj_AdjustmentDepreciationAndDepletion
Impairment of oil and gas properties 16,401,376us-gaap_ImpairmentOfOilAndGasProperties 0us-gaap_ImpairmentOfOilAndGasProperties
Shares based payments issued for services 109,527us-gaap_IssuanceOfStockAndWarrantsForServicesOrClaims 258,498us-gaap_IssuanceOfStockAndWarrantsForServicesOrClaims
Accretion of asset retirement obligation 70,984us-gaap_AssetRetirementObligationAccretionExpense 63,695us-gaap_AssetRetirementObligationAccretionExpense
Loss on derivatives 154,557us-gaap_UnrealizedGainLossOnDerivatives 69,289us-gaap_UnrealizedGainLossOnDerivatives
Settlement of asset retirement obligations (2,244)us-gaap_AssetRetirementObligationCashPaidToSettle (4,996)us-gaap_AssetRetirementObligationCashPaidToSettle
Changes in assets and liabilities:    
Accounts receivable 318,856us-gaap_IncreaseDecreaseInAccountsReceivable (99,299)us-gaap_IncreaseDecreaseInAccountsReceivable
Inventory 25,289us-gaap_IncreaseDecreaseInInventories 3,551us-gaap_IncreaseDecreaseInInventories
Deposits and prepaid expenses (397,848)enrj_IncreaseDecreasePrepaidExpensesAndSundryDeposits (356,275)enrj_IncreaseDecreasePrepaidExpensesAndSundryDeposits
Accounts payable (1,015,149)us-gaap_IncreaseDecreaseInAccountsPayable 81,308us-gaap_IncreaseDecreaseInAccountsPayable
Accrued liabilities 398,219us-gaap_IncreaseDecreaseInAccruedLiabilities (949,011)us-gaap_IncreaseDecreaseInAccruedLiabilities
Cash flows from operating activities (545,386)us-gaap_NetCashProvidedByUsedInOperatingActivities (65,848)us-gaap_NetCashProvidedByUsedInOperatingActivities
Cash flows from investing activities    
Purchase of fixed assets (2,809)us-gaap_PaymentsToAcquireOtherPropertyPlantAndEquipment (80,143)us-gaap_PaymentsToAcquireOtherPropertyPlantAndEquipment
Additions to oil and gas properties (112,719)us-gaap_PaymentsToAcquireOilAndGasProperty (1,234,890)us-gaap_PaymentsToAcquireOilAndGasProperty
Sales of oil and gas properties 0us-gaap_ProceedsFromSaleOfOilAndGasPropertyAndEquipment 987,521us-gaap_ProceedsFromSaleOfOilAndGasPropertyAndEquipment
Proceeds from sale of fixed assets 0us-gaap_ProceedsFromSaleOfProductiveAssets 0us-gaap_ProceedsFromSaleOfProductiveAssets
Cash flows from investing activities (115,528)us-gaap_NetCashProvidedByUsedInInvestingActivities (327,512)us-gaap_NetCashProvidedByUsedInInvestingActivities
Cash flows from financing activities    
Proceeds from sale of common and preferred stock 2,714,215us-gaap_ProceedsFromIssuanceOrSaleOfEquity 0us-gaap_ProceedsFromIssuanceOrSaleOfEquity
Proceeds from borrowings 500,000us-gaap_ProceedsFromIssuanceOfLongTermDebt 500,000us-gaap_ProceedsFromIssuanceOfLongTermDebt
Dividends paid on preferred stock (470,088)us-gaap_PaymentsOfDividendsPreferredStockAndPreferenceStock 0us-gaap_PaymentsOfDividendsPreferredStockAndPreferenceStock
Repayment of long-term debt (6,732)us-gaap_RepaymentsOfLongTermDebt (9,096)us-gaap_RepaymentsOfLongTermDebt
Deferred financing costs 51,557us-gaap_PaymentsOfFinancingCosts 30,902us-gaap_PaymentsOfFinancingCosts
Cash flows from financing activities 2,788,952us-gaap_NetCashProvidedByUsedInFinancingActivities 521,806us-gaap_NetCashProvidedByUsedInFinancingActivities
Net increase in cash 2,128,038us-gaap_CashAndCashEquivalentsPeriodIncreaseDecrease 128,446us-gaap_CashAndCashEquivalentsPeriodIncreaseDecrease
Cash - beginning 805,524us-gaap_Cash 1,308,196us-gaap_Cash
Cash - ending 2,933,562us-gaap_Cash 1,436,642us-gaap_Cash
Supplemental disclosures:    
Interest paid 197,046us-gaap_InterestPaid 74,499us-gaap_InterestPaid
Income taxes paid 0us-gaap_IncomeTaxesPaid 0us-gaap_IncomeTaxesPaid
Non-cash transactions:    
Share based payments issued for services $ 109,527us-gaap_StockIssued1 $ 258,498us-gaap_StockIssued1
XML 43 R10.htm IDEA: XBRL DOCUMENT v2.4.1.9
Derivative Instruments
3 Months Ended
Mar. 31, 2015
Derivative Instruments [Abstract]  
Derivative Instruments
Note 5 - Derivative Instruments
 
We have entered into certain derivative or physical arrangements with respect to portions of our crude oil production to reduce our sensitivity to volatile commodity prices and/or to meet hedging requirements under our Credit Facility. We believe that these derivative arrangements, although not free of risk, allow us to achieve a more predictable cash flow and to reduce exposure to commodity price fluctuations. However, derivative arrangements limit the benefit of increases in the prices of crude oil. Moreover, our derivative arrangements apply only to a portion of our production.
 
We have an Intercreditor Agreement in place between the Company; our counterparties, BP Corporation North America, Inc. ("BP") and Cargill Incorporated (“Cargill”) and our agent Texas Capital Bank, N.A., which allows Texas Capital Bank to also act as agent for the counterparties for the purpose of holding and enforcing any liens or security interests resulting from our derivative arrangements. Therefore, we are not required to post additional collateral, including cash.
 
The following derivative contracts were in place at March 31, 2015:
 
 
 
Term
 
Monthly Volumes
 
Price/Bbl
 
Fair Value
 
Deferred premium put
 
1/16-6/16
 
9,000 Bbls
 
$
85.00
 
 
1,256,288
 
Crude oil swap
 
1/15-12/15
 
5,800 Bbls
 
$
88.55
 
 
1,879,490
 
Crude oil swap
 
7/11-12/15
 
3,000 Bbls
 
$
83.70
 
 
841,200
 
Crude oil swap
 
7/12-12/15
 
1,000 Bbls
 
$
76.74
 
 
217,760
 
 
 
 
 
 
 
 
 
 
$
4,194,738
 
 
Monthly volume is the weighted average throughout the period.
 
The total fair value is shown as a derivative instrument in both current and non-current assets on the balance sheet. 
XML 44 R27.htm IDEA: XBRL DOCUMENT v2.4.1.9
Impairment of Oil and Gas Properties - Additional Information (Detail) (USD $)
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Oil Price Per Barrel 78.82enrj_OilPricePerBarrel  
Natural Gas Price Per MMBtu 3.74enrj_NaturalGasPricePerMmbtu  
Impairment of Oil and Gas Properties $ 16,401,376us-gaap_ImpairmentOfOilAndGasProperties $ 0us-gaap_ImpairmentOfOilAndGasProperties
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Stock Options (Summary of stock options) (Detail) (USD $)
3 Months Ended
Mar. 31, 2015
Options  
Options Outstanding, Beginning Balance 231,332us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber
Options Granted 67,332us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriod
Options Cancelled 0us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeituresInPeriod
Options Exercised 0us-gaap_StockIssuedDuringPeriodSharesStockOptionsExercised
Options Outstanding, Ending Balance 298,664us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber
Weighted Average. Exercise Price  
Weighted Ave. Exercise Price Outstanding, Beginning Balance $ 9.33us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice
Weighted Ave. Exercise Price Granted $ 9.85us-gaap_ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageExercisePrice
Weighted Ave. Exercise Price Cancelled $ 0us-gaap_ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsForfeituresInPeriodWeightedAverageExercisePrice
Weighted Ave. Exercise Price Exercised $ 0us-gaap_ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsExercisesInPeriodWeightedAverageExercisePrice
Weighted Ave. Exercise Price Outstanding, Ending balance $ 9.45us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice
Warrants  
Warrants Outstanding 0us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedNumber
Warrants Granted 0us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsGrantsInPeriod
Warrants Cancelled 0us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsForfeitedInPeriod
Warrants Exercised 0enrj_WarrantsExercised
Warrants Outstanding 0us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedNumber
Weighted Average. Exercise Price  
Weighted Ave. Exercise Price Outstanding $ 0enrj_WeightedAveExercisePriceOutstanding
Weighted Ave. Exercise Price Granted $ 0enrj_WeightedAveExercisePriceGranted
Weighted Ave. Exercise Price Cancelled $ 0enrj_WeightedAveExercisePriceCancelled
Weighted Ave. Exercise Price Exercised $ 0enrj_WeightedAveExercisePriceExercised
Weighted Ave. Exercise Price Outstanding $ 0enrj_ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsOutstandingWeightedAverageExercisePrice