Subsequent Events

9 Months Ended

Sep. 30, 2011

Subsequent Events

Schedule of Subsequent Events [Table Text Block]

NOTE 9. SUBSEQUENT EVENTS

Events occurring after September 30, 2011 were evaluated through the date this

Quarterly Report was issued, in compliance FASB ASC Topic 855 "Subsequent

Events", to ensure that any subsequent events that met the criteria for

recognition and/or disclosure in this report have been included.

On October 18, 2011, Gryphon Production Company, LLC, a wholly owned subsidiary

of Chancellor Group, Inc., and LCB Resources, LLC, located in Kingfisher,

Oklahoma, entered into a Purchase and Sale Agreement "Agreement" pursuant to

which Gryphon will sell and LCB Resources, LLC will purchase substantially all

of the assets of Gryphon. Assets to be sold include all of Gryphon's facilities

and equipment located in Pampa, Texas and most all of Gryphon's oil and gas

properties (both producing and non-producing wells), leases and drilling rights

located in Gray and Hutchinson counties in the Texas Panhandle, excluding only

four producing wells and one water disposal well. Gryphon will also retain its

operator's license with the Texas Railroad Commission and continue to operate

the Hood Leases.

Under the terms of the Agreement, LCB Resources, LLC will pay Gryphon $2,050,000

in cash for the assets, subject to certain conditions and adjustments as set

forth in the Agreement. Approval of the Agreement must be obtained by at least a

majority of the outstanding stockholders of Chancellor common stock. Management

anticipates to complete the asset sale sometime during the fourth quarter of

2011 although delays could occur. The Agreement provides for a December 15, 2011

termination date, although an extension may be possible if both parties agree.

Further information, including the Purchase and Sale Agreement, is provided in

our Form 8-K filing on October 20, 2011.

On October 13, 2011, the Company entered into a consulting agreement for 500,000

shares of stock and $3,000. The agreement is for six months with an additional

200,000 shares and $3,000 payable monthly.