NOTE 8 - COMMON STOCK

12 Months Ended

Dec. 31, 2015

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

NOTE 8 - COMMON STOCK

In May 2015 and April 2014, Royale Energy entered into Sales Agreements with Roth Capital Partners, LLC (Roth), under which the Company had the ability to issue and sell shares of its common stock from time to time in an at the market equity offering program with Roth acting as the Company’s sales agent.  Royale Energy sold 701,397 shares of common stock for total consideration of $556,123 under the 2015 Sales Agreement and no shares of common stock under the 2014 Sales Agreement.  Both agreements have been terminated as of December 31, 2015.

On November 25, 2015, Royale Energy entered into a securities purchase agreement and related agreements with a group of individual investors pursuant to a registered direct offering.  Under the terms of the agreements, the investors purchased 497,948 shares of Royale’s common stock at $0.408 per share, and received warrants to purchase up to 248,973 shares (the “Warrants’) of stock at $1.00 per share for three (3) years, for a total of $203,165 in gross proceeds,.  Each Warrant becomes exercisable one year from the date of issuance.  Each Warrant contains customary adjustments for corporate events such as reorganizations, splits, and dividends.  The fair value of each warrant was estimated on the grant date using the Black-Scholes option-pricing model.  This model incorporates certain assumptions for inputs including a risk-free market interest rate, expected dividend yield of the underlying common stock, expected warrant life and expected volatility in the market value of the underlying common stock.  For these warrants, the value was calculated with the following assumptions: expected volatility of 78.96%, risk-free market interest rate of 1.13%, an expected term of 1,460 days, and an exercise price of $1.00.