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Investments in Mineral Properties | 12 Months Ended
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Dec. 31, 2013
Investments in Mineral Properties [Text Block] |
4. | Investments in Mineral Properties
| During the year ended December 31, 2013, the Company invested $43,180 in one investment of mineral properties. During the year ended December 31, 2012, the Company invested a total of $355,242 in four mineral properties and exchanged a Poston Prospect well with a book value of $41,000 plus cash in the amount of $6,500 for partial payment on a well located in the Oklahoma prospect. Management reviewed the carrying amount of the Company’s investments in its oil and gas properties during the 3 rd quarter of 2013 and recognized an impairment expense in the amount of $1,172,547 to bring the mineral properties carrying value in line with their fair market value at that time. Management reviewed the carrying amount of the Company’s investments in its oil and gas properties at the balance sheet date and recognized no further impairment as of December 31, 2013 and $565,737 of impairment expense as of December 31, 2012. As of December 31, 2013 and 2012, the estimated fair value of mineral properties totaled $400,000 and $1,582,324, net of accumulated amortization of $185,457 and $132,499, respectively. As of December 31, 2013, the Company has total gross capitalized costs of mineral properties of $585,457 ; $367,394 in proved properties and $218,063 in unproved properties. As of December 31, 2012, the Company has total capitalized costs of mineral properties (gross) of $1,714,822 ; $1,103,205 in proved properties and $611,617 in unproved properties. Capitalized costs of proved properties are amortized using the straight-line method over the estimated useful life of each well. Unproved properties are excluded from amortization. Amortization expense for the years ended December 31, 2013 and 2012 was $52,957 and $105,880, respectively. Subsequent to year end, revenue producing investments in mineral properties were sold for a total of $540,000 (See footnote 11 for further details). A summary of investments follows:
| Poston Prospect
| On May 4, 2009, the Company entered into an Agreement with S&W Oil & Gas, LLC (“S&W”) to participate in the drilling for oil in the Poston Prospect #1 Lutters in Southwest Trego County, Kansas (the “Poston Prospect”). Pursuant to the agreement, the Company paid $64,500 in exchange for a 25% working interest in the 81.5% net revenue interest in the Poston Prospect. Subsequent to acquiring the working interest, the Company paid $138,615 in capitalized development costs necessary for completion of the initial well and the drilling and completion of a second well in the Poston Prospect. In 2011, the Company recognized an impairment of the investment in the amount of $93,879. During the year ended December 31, 2012, the Company sold its interest in the Poston Prospect for cash in the amount of $69,500, resulting in a gain of $2,621. This well contributed approximately 5% of the Company’s 2012 revenue and 0% of the revenue for the year ended December 31, 2013.
| Oklahoma prospects
| During 2010 and 2011, the Company acquired various working interest percentages ranging from 5% to 50%, from Bay Petroleum for mineral properties located in Oklahoma in exchange for cash totaling $1,992,330. During the year ended December 31, 2011, one well was determined to be a “dry hole” and its full $80,000 carrying value was impaired. During the year ended December 31, 2012, the Company acquired additional working interests in the Oklahoma prospects for cash in the amount of $355,242 and property valued at $41,000. During the year ended December 31, 2012, two of the wells were determined to be uneconomic and $565,737 of impairment was taken to reduce the properties to their fair value. As of December 31, 2012, the investment in these mineral properties is $1,582,324, net of accumulated amortization of $132,499. During the year ended December 31, 2013, the Company invested an additional $43,180. Management reviewed the carrying amount of the Company’s investments in its oil and gas properties as of the third quarter of 2013 and recognized an impairment expense in the amount of $1,172,547 for the year ended December 31, 2013. As of December 31, 2013, the investment in these mineral properties is $400,000 net of accumulated amortization of $185,457. The Oklahoma prospects wells contributed approximately 95% of the Company’s 2012 revenue and 100% of the revenue for the year ended December 31, 2013. Subsequent to year end, revenue producing investments in mineral properties were sold for a total of $540,000 (See footnote 11 for further details).

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- Definition The entire disclosure for mineral industries. + References No definition available. + Details
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