Note 6 - Related Party Transactions

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

Note 6. Related Party Transactions

The Company’s officers, directors, affiliates and certain employees have frequently participated, and will likely continue to participate in the future, as working interest owners in wells in which the Company has an interest. Frequently, the Company has loaned the funds necessary for certain employees to participate in the drilling and development of such wells. Initial terms of the unsecured loans call for repayment of all principal and accrued interest at the end of

four

years, however, the loan amounts are reduced from payments made by employees and as production proceeds attributable to the employees’ working interests are not remitted to the employees but rather used to reduce the amounts owed by the employees to the Company. If an outstanding balance remains after the initial

four

-year term, the Company and employee shall, acting in good faith, agree upon further repayment terms.

Employees remain obligated for the entire loan amount regardless of a dry-hole event or otherwise insufficient production. The loans carry

no

loan forgiveness provisions, and

no

loans have ever been forgiven. The loans accrue interest at the prime rate, which was

4.00%

at

March

31,

2017.

In accordance with the Sarbanes-Oxley Act of

2002,

the Company has not extended any loans to officers or directors since

2002.

At

March

31,

2017

and

December

31,

2016,

the Company has extended various loans, evidenced by notes, to

two

employees with origination dates ranging from

December

2010

to

December

2015.

In addition,

two

subsequent addenda extending additional payment terms to certain notes are outstanding at

March

31,

2017.

Employees’ notes receivable, including accrued interest, amounted to

$48,328

and

$87,045

at

March

31,

2017

and

December

31,

2016,

respectively.