Property and Equipment

9 Months Ended

Mar. 31, 2013

Note 2 — Property and Equipment

As of March 31, 2013 and June 30, 2012 our oil and natural gas properties and other property and equipment consisted of the following:

	March 31, 2013			June 30, 2012
Oil and natural gas properties
Property costs subject to amortization	$	42,389,330		$	40,874,244
Less: Accumulated depreciation, depletion, and amortization	(7,487,095		)	(6,440,166		)
Unproved properties not subject to amortization	5,349,286			6,042,094
Oil and natural gas properties, net	$	40,251,521		$	40,476,172

Other property and equipment
Furniture, fixtures and office equipment, at cost	322,515			322,514
Less: Accumulated depreciation	(263,553		)	(230,243		)
Other property and equipment, net	$	58,962		$	92,271

Unproved properties not subject to amortization consists of unevaluated acreage and development costs of $9.2 million and $6.0 million as of March 31, 2013 and June 30, 2012, respectively, for our properties in the Mississippi Lime in Oklahoma. Our evaluation of impairment of unproved properties occurs, at a minimum, on a quarterly basis. For the nine months ended March 31, 2013, we transferred $3.8 million of Mississippi Lime property cost to the full cost pool as initial quantities of hydrocarbon production were indicative of impairment. During the corresponding prior year period, we transferred approximately $2.2 million of impaired assets, reflecting principally Woodford Shale properties, from our unevaluated pool to our full cost pool.

In early November 2012 the company sold its Wood well in the Giddings Field to EnerVest LLC and received net proceeds of $250,000 and the buyer’s assumption of all abandonment liabilities.

On December 24, 2012, the Company closed the sale of a portion of its producing and non-producing properties and assets in Brazos, Burleson, Fayette, Lee and Grimes Counties, Texas to ASM Oil and Gas Company, Inc. (“ASM”) for an adjusted purchase price of $2.8 million and the buyer’s assumption of all abandonment liabilities.

The proceeds from these sales were recognized as a reduction of the cost of oil and gas properties.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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