Quarterly report pursuant to Section 13 or 15(d)

STATEMENTS OF CASH FLOWS (Unaudited)

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STATEMENTS OF CASH FLOWS (Unaudited) (USD $)
6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Cash Flows from Operating Activities    
Net loss $ (1,263,494) $ (608,563)
Adjustment to reconcile net income to net cash used in operating activities:    
Depletion, depreciation and amortization 88,492 34,456
Amortization of debt discount 40,934 0
Loss on sale/disposal of assets 0 5,609
ARO accretion 547 3,502
Stock-based compensation expense – employees 589,130 5,400
Stock-based compensation expense – consultants 399,000 0
Changes in operating assets and liabilities    
Accounts receivable - related party 0 4,805
Accounts receivable (17,910) 0
Other assets 15,731 (677)
Accounts payable (26,185) (21,200)
Accounts payable - related party 0 6,586
Accrued liabilities 1,081 16,564
Deferred rent (1,867) (1,228)
Net cash flows from operating activities (174,541) (554,746)
Cash Flows from Investing Activities    
Purchase property and equipment (18,876) (6,200)
Proceeds from sale of property and equipment 0 20,000
Capital expenditures on oil and gas properties (587,582) (207,955)
Cash flows from investing activities (606,458) (194,155)
Cash Flows from Financing Activities    
Amounts borrowed from related parties 0 350,000
Purchase of treasury stock 0 (900)
Proceeds from issuance of common stock 690,004 0
Payments on notes payable (6,356) 0
Cash flows from financing activities 683,648 349,100
Net change in cash and cash equivalents (97,351) (399,801)
Cash and cash equivalents    
Beginning of period 122,162 731,043
End of period 24,811 331,242
SUPPLEMENTAL DISCLOSURES    
Interest paid 18,329 0
NON-CASH INVESTING AND FINANCIAL DISCLOSURES    
Discount on related party debt 0 251,184
Cancellation of treasury shares 0 5,000
Initial recognition of asset retirement obligations 9,437 0
Change in accounts payable for expenditures on oil and gas properties 7,103 0
Fair value of stock issued for oil properties 0 395,000
Note payable for equipment $ 54,541 $ 0