Note 3 - Oil and Gas Property

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Oil and Gas Properties [Text Block]

NOTE

3

– OIL AND GAS PROPERTIES

On

June 25, 2020,

the Company entered into a Purchase and Sale Agreement with Pure Oil & Gas, Inc. (“Pure”) and ZQH Holding, LLC (“ZQH”) to acquire oil and gas assets in Rogers County Oklahoma (the “Project”) in consideration of a purchase price of

$1,000,000.

Pursuant to the agreement, the Company has taken assignment of all of ZQH and Pure's working interest in the Project and has recognized a note payable to ZQH and Pure as of

June 30, 2020

of

$1,060,000

consisting of the purchase price of

$1,000,000

and the principal and accrued interest on an existing note totaling to

$60,000.

(See Note

6

). The Company, ZQH, and Pure agreed that the sellers' combined working interest in the Project is

87.5%.

The current operator of the Project and owner of the residual working interest is Premier Gas Company, LLC.

On

July 6, 2020,

Premier filed a mechanic's lien in Rogers County alleging past unpaid invoices and also claiming incorrectly that Alpha's ownership is

75%

rather than

87.5%.

No

documentation has been provided Alpha of any past due invoices by Premier, Pure, or ZQH, and we intend to contest the lien vigorously.

The Company notes that the Project is included in the lands in eastern Oklahoma affected by a decision of the U.S. Supreme Court issued on

July 9, 2020.

In McGirt v. Oklahoma the Supreme Court held that a large portion of eastern Oklahoma reserved for the Creek Nation in the

19th

century remains Indian Country for purposes of the federal Major Crimes Act. The impact of this decision on title to the lands and leases included in the Project is uncertain at this point, and the Company will continue to monitor developments concerning the effects of this decision.

On

June 30, 2020,

the Company entered into an Option Agreement (the “Agreement”) with Progressive Well Service, LLC to acquire oil and gas assets in Lincoln and Logan Counties in Central Oklahoma ((the “Coral Project”, called the “Logan

1

Project” in the Agreement). The Agreement gives the Company until

December 31, 2020

to exercise its option (the “Option Period”). During the Option Period, Progressive

may

not

sell the Coral Project to any

third

party. In return for this exclusivity, the Company subsequently issued

10,000

shares of its common stock with a fair value of

$10,000,

such shares to bear a legend restricting sale during the Option Period. At any time during the Option Period, the Company

may

exercise its Option with a cash payment of

$50,000.