Note 8 - Commitments and Contingencies

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

Note 8 . Commitments and Contingencies

The Company has natural gas delivery commitments to the Gas Purchasers (see Note

7).

Management believes the Company can meet its delivery commitments based on estimated production. If, however, the Company cannot meet its delivery commitments, it

may

be required to purchase natural gas at market prices to meet such commitments which

may

result in a gain or loss for the difference between the delivery commitment price and the price at which the Company is able to purchase the natural gas for redelivery (resale) to its customers.

In conjunction with the sale of approximately

28,800

acres of deep rights made in

2012,

the Company agreed to perpetuate the producing leases for a minimum period of

five

years. If the Company fails to perpetuate the producing leases during such

five

-year period, it shall refund to the purchaser the portion of the purchase price attributable to the affected properties based on an allocated value of

$1,250

per acre (the “Refund Price”), provided however, that should the Company revive or otherwise renew such expired leases within

three

months of their expiration, the purchaser shall have the right to acquire the deep rights on such revived or renewed leases for the Refund Price. The Company has assessed the shallow operations of all properties from which deep acreage was sold and does not believe a reserve for potential refunded acreage to be necessary at

December

31,

2016.

The Company is party to various legal proceedings and claims in the ordinary course of its business. The Company believes certain of these matters will be covered by insurance and that the outcome of other matters will not have a material adverse effect on its consolidated financial position, results of operations, or liquidity.