Note 5 - Asset Retirement Obligation

12 Months Ended

Dec. 31, 2011

Asset Retirement Obligation Disclosure [Text Block]

Note 5 – Asset Retirement Obligation

The Company has asset retirement obligations associated with the future plugging and abandonment of proved properties and related facilities. Under the provisions of FASB ASC 410-20-25, the fair value of a liability for an asset retirement obligation is recorded in the period in which it is incurred and a corresponding increase in the carrying amount of the related long lived asset. The liability is accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the related asset. If the liability is settled for an amount other than the recorded amount, a gain or loss is recognized. The Company has no assets that are legally restricted for purposes of settling asset retirement obligations.

The following table summarizes the Company’s asset retirement obligation transactions recorded in accordance with the provisions of FASB ASC 410-20-25 during the year ended December 31, 2011 and the period from April 9, 2010 (inception) to December 31, 2010:

	December 31,		December 31,
	2011		2010
Beginning Asset Retirement Obligation	$	-	$	-
Liabilities Incurred for New Wells Placed in Production		3,391		-
Accretion of Discount on Asset Retirement Obligations		509		-
Ending Asset Retirement Obligation	$	3,900	$	-

- Definition

The entire disclosure for an asset retirement obligation and the associated long-lived asset. An asset retirement obligation is a legal obligation associated with the disposal or retirement from service of a tangible long-lived asset that results from the acquisition, construction or development, or the normal operations of a long-lived asset, except for certain obligations of lessees.

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