Note 5 - Related Party Transactions

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

Note 5 . 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 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

5.50%

at

December 31, 2018.

In accordance with the Sarbanes-Oxley Act of

2002,

the Company has

not

extended any loans to officers or directors since

2002.

At

December 31, 2018

the Company has extended loans to an employee, evidenced by notes, with origination dates ranging from

December 2017

to

December 2018.

At

December 31, 2017

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

three

employees with origination dates ranging from

December 2011

to

December 2017.

In addition, at

December 31, 2017

two

subsequent addenda extending additional payment terms to certain notes were outstanding. Employee notes receivables, including accrued interest, amounted to approximately

$5,000

and

$46,700

at

December 31, 2018

and

2017,

respectively. Employee notes receivables are included in other assets in the Company’s consolidated balance sheet.

The Company collects and holds operational advances from employees, including officers and directors, who own working interests in wells of which the Company operates (see Note

1

). Operational advances held on behalf of employees, including officers and directors, were approximately

$307,800

and

$180,300

at

December 31, 2018

and

2017,

respectively.