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ACQUISITION OF WARHORSE OIL AND NATURAL GAS PROPERTIES	9 Months Ended
Sep. 30, 2019
Notes to Financial Statements
4. ACQUISITION OF WARHORSE OIL AND NATURAL GAS PROPERTIES	On June 10, 2019, the Company received a process verbal and related sheriff's deed dated as of May 29, 2019 (the "Sheriff's Deed") pertaining to two wells in St. Landry Parish purchased from Business First Bancshares, Inc. d/b/a Business First Bank ("Business First"). Pursuant to the Sheriff's Deed, the Company acquired certain oil and natural gas properties located in St. Landry Parish, Louisiana, including operated working interest in two producing wells. The Company purchased Business First's position as the superior lienholder and seizing creditor of such oil and natural gas properties, which were owned by Warhorse Oil & Gas, LLC, for $450,000 plus $16,993 sheriff fees. The payment was paid from loan proceeds under the loan agreement with CrossFirst Bank (see Note 7). The Company had been operating the two wells for Business First since July 2018. Both wells combined produce approximately 31 barrels of oil per day. Working interest purchased by the Company is 48.2% on the Jay Butler No. 1 well and 45% in the Richard No. 1 well. The Company treated the acquisition as an asset purchase. An amount equal to $90,000 was allocated to lease and well equipment and $376,993 was allocated to producing properties. An asset retirement obligation of $19,732 was recorded in conjunction with the purchase.

ACQUISITION OF WARHORSE OIL AND NATURAL GAS PROPERTIES

9 Months Ended

Sep. 30, 2019

4. ACQUISITION OF WARHORSE OIL AND NATURAL GAS PROPERTIES

On June 10, 2019, the Company received a process verbal and related sheriff's deed dated as of May 29, 2019 (the "Sheriff's Deed") pertaining to two wells in St. Landry Parish purchased from Business First Bancshares, Inc. d/b/a Business First Bank ("Business First").

Pursuant to the Sheriff's Deed, the Company acquired certain oil and natural gas properties located in St. Landry Parish, Louisiana, including operated working interest in two producing wells. The Company purchased Business First's position as the superior lienholder and seizing creditor of such oil and natural gas properties, which were owned by Warhorse Oil & Gas, LLC, for $450,000 plus $16,993 sheriff fees. The payment was paid from loan proceeds under the loan agreement with CrossFirst Bank (see Note 7).

The Company had been operating the two wells for Business First since July 2018. Both wells combined produce approximately 31 barrels of oil per day. Working interest purchased by the Company is 48.2% on the Jay Butler No. 1 well and 45% in the Richard No. 1 well.

The Company treated the acquisition as an asset purchase. An amount equal to $90,000 was allocated to lease and well equipment and $376,993 was allocated to producing properties. An asset retirement obligation of $19,732 was recorded in conjunction with the purchase.