|
Accounting Policies, by Policy (Policies)
|
9 Months Ended | 12 Months Ended |
|---|---|---|
|
Sep. 30, 2012
|
Dec. 31, 2011
|
|
| Use of Estimates, Policy [Policy Text Block] |
Estimates
The
process of preparing financial statements requires that
the Company make estimates and assumptions that affect
the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the
date of the financial statements, and the reported
amounts of revenues and expenses during the reporting
period. Such estimates primarily relate to unsettled
transactions and events as of the date of the financial
statements; accordingly, actual results may differ from
estimated amounts. The Company’s
estimates and assumptions are based on current facts,
historical experience and various other factors the
Company believes to be reasonable under the
circumstances. The most significant estimates with
regard to the Company’s financial statements
relate to carrying values of oil and gas properties and
deferred income tax rates and timing of the reversal of
income tax differences. These
estimates and assumptions are reviewed periodically
and, as adjustments become necessary, they are reported
in earnings in the periods in which they become
known.
|
Use
of Estimates
The
preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect reported
amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could
differ from those estimates.
|
| Cash and Cash Equivalents, Policy [Policy Text Block] |
Cash
and cash equivalents
The
Company considers all highly liquid investments with an
original maturity of three months or less as cash
equivalents.
|
|
| Property, Plant and Equipment, Policy [Policy Text Block] |
Property
and equipment
Property
and equipment are recorded at cost and depreciated under
straight line methods over each item's estimated useful
life.
|
|
| Income Tax, Policy [Policy Text Block] |
Income
Taxes
The
Company follows the asset and liability method of
accounting for future income taxes. Under this method,
future income tax assets and liabilities are recorded
based on temporary differences between the carrying
amount of balance sheet items and their corresponding
tax bases. In addition, the future benefits of income
tax assets, including unused tax losses, are
recognized, subject to a valuation allowance, to the
extent that it is more likely than not that such future
benefits will ultimately be realized. Future income tax
assets and liabilities are measured using enacted tax
rates and laws expected to apply when the tax
liabilities or assets are to be either settled or
realized.
|
Income
tax
We
follow Financial Accounting Standards Board
(“FASB”) Statement of Financial Accounting
Standards (“SFAS”) No. 109, ASC 740 -
“Accounting for Income Taxes” (“ASC
740”). This standard requires the use of an asset and
liability approach for financial accounting for and reporting
of income taxes. If it is more likely than not that some
portion or all of a deferred tax asset will not be realized,
a valuation allowance is recognized.
|
| Earnings Per Share, Policy [Policy Text Block] |
Net
income (loss) per share
The
net income (loss) per share is computed by dividing the net
income (loss) by the weighted average number of shares of
common outstanding. Warrants, stock options, and other
dilutive instruments are not included in the computation if
the effect would be anti-dilutive. As of and for the year
ended December 31, 2011 and 2010, there were no potentially
dilutive instruments outstanding.
|
|
| Fair Value of Financial Instruments, Policy [Policy Text Block] |
Fair
Value of Financial Instruments
The
estimated fair values for financial instruments are
determined at discrete points in time based on relevant
market information. These estimates involve
uncertainties and cannot be determined with
precision. The estimated fair value of cash, other
receivables, accounts payable, accrued liabilities and
demand notes payable approximates their carrying
value
due to their short-term nature. The
Company considers all highly liquid instruments with an
original maturity of three months or less at the time
of issuance to be cash equivalents.
|
Financial
Instruments
The
Company’s financial instruments consist principally of
cash and cash equivalents, other receivables, and related
party notes payable. Management believes that the recorded
values of our other financial instruments approximate their
current fair values because of their nature and relatively
short maturity dates or durations.
|
| Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] |
Long-Lived
Assets
In
accordance with ASC 350, the Company reviews the carrying
value of intangible and other long-lived assets for the
existence of facts or circumstances, both internally and
externally, that may suggest impairment. If impairment
testing indicates a lack of recoverability, an impairment
loss is recognized by the Company if the carrying amount of a
long-lived asset exceeds its fair value.
|
|
| Reclassification, Policy [Policy Text Block] |
Reclassification
Certain
prior year amounts have been reclassified to conform to the
current year presentation.
|
|
| New Accounting Pronouncements, Policy [Policy Text Block] |
Recent
Accounting Pronouncements
The
Company has evaluated all recent accounting
pronouncements through the date of this prospectus and
believes that none of them will have a material effect
on the Company.
|
Recently
Issued Accounting Pronouncements
The
Company has evaluated all the recent accounting
pronouncements through the filing date and believes that none
of them will have a material effect on the Company.
|
| Basis of Accounting, Policy [Policy Text Block] |
Basis
of Presentation
The
accompanying unaudited interim financial statements of
the Company have been prepared in accordance with
accounting principles generally accepted in United
States of America and the rules of the Securities and
Exchange Commission (“SEC”), and should be
read in conjunction with the audited financial
statements and notes thereto contained in the
Company’s financial statements for the year ended
December 31, 2011 which are included as part of this
prospectus. In the opinion of management, all
adjustments, consisting of normal recurring
adjustments, necessary for a fair presentation of the
results of operations for the interim periods presented
have been reflected herein. The results of operations
for such interim periods are not necessarily indicative
of operations for a full year. Notes to the
consolidated financial statements which would
substantially duplicate the disclosure contained in the
audited financial statements for the year
ended December 31, 2011 have been
omitted.
|
|
| Oil and Gas Properties Policy [Policy Text Block] |
Petroleum
and Natural Gas Properties
The
Company uses the full cost method to account for our
investment in oil and gas properties. Accordingly, all
costs associated with acquisition, exploration and
development of oil and gas reserves, including such
costs as leasehold acquisition costs relating to
unproved properties, geological expenditures, tangible
and intangible development costs, including direct
internal costs, are capitalized to the full cost pool.
If the Company commences production from established
proven oil and gas reserves, capitalized costs,
including estimated future costs to develop the
reserves and estimated abandonment costs, net of
salvage, will be depleted on the units-of-production
method using estimates of proved reserves. Costs of
unproved properties are not amortized until the proved
reserves associated with the projects can be determined
or until impairment occurs. If an assessment of such
properties indicates that properties are impaired, the
amount of impairment is added to the capitalized cost
base to be amortized. The
capitalized costs included in the full cost pool are
subject to a "ceiling test" (based on the average of
12-month first-day-of-the-month prices),
which limits such costs to the aggregate of the (i)
estimated present value, using a ten percent
discount rate, of the future net revenues from proved
reserves, based on current economic and operating
conditions, (ii) the lower of cost or estimated fair
value of unproven properties included in the costs
being amortized, (iii) the cost of properties not being
amortized, less (iv) income tax effects related to
differences between the book and tax basis of the cost
of properties not being amortized and the cost or
estimated fair value of unproved properties included in
the costs being amortized. If net capitalized costs
exceed this limit, the excess is charged to expense in
the current period. Sales
of proved and unproved properties are accounted for as
adjustments of capitalized costs with no gain or loss
recognized, unless such adjustments would significantly
alter the relationship between capitalized costs and
proved reserves of oil and gas, in which case the gain
or loss is recognized in the statement of
operations.
|
|
| Asset Retirement Obligations, Policy [Policy Text Block] |
Asset
Retirement Obligations
The
Company records the fair value of an asset
retirement obligation as a liability in the
period in which it incurs an obligation
associated with the retirement of tangible
long-lived assets that result from the
acquisition, construction, development and/or
normal use of the assets. The estimated fair
value of the asset retirement obligation is
based on the current cost escalated at an
inflation rate and discounted at a credit
adjusted risk-free rate. This liability is
capitalized as part of the cost of the related
asset and amortized over its useful
life.
|
|
| Revenue Recognition, Policy [Policy Text Block] |
Revenue
Recognition
The
Company recognizes revenue when persuasive evidence of
an arrangement exists, services have been rendered, the
sales price is fixed or determinable, and
collectability is reasonably assured. The
Company follows the “sales method” of
accounting for oil and revenue, hence the Company
recognizes revenue on all crude oil sold to purchasers,
regardless of whether the sales are proportionate to
the Company’s ownership in the
property. Operating costs and taxes are
recognized in the same period in which revenue is
earned. Severance and ad valorum taxes are
reflected as a component of lease operating
expense.
|