NOTE 3. PROPERTY AND EQUIPMENT. |
9 Months Ended |
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Sep. 30, 2015 | |
| Oil and Gas Property [Abstract] | |
| Oil and Gas Properties [Text Block] |
NOTE 3. PROPERTY AND EQUIPMENT.
SUDS Purchase
On September 23, 2015, we entered into a Purchase and Sale Agreement with SUDS Properties, LLC (“SUDS” and the “Purchase Agreement”). SUDS is 100% owned by Jovian Resources LLC (“Jovian”). Mr. Zel C. Khan, our President and CEO, is the former manager of Jovian. Pursuant to the Purchase Agreement, we acquired a 10% working interest in the SUDS field located in Creek County Oklahoma, in exchange for 10,586,805 shares of restricted common stock, representing 33% of our outstanding common stock. Based on that current market value of Rockdale stock at $0.068 per share, the price paid was $719, 902. Concurrently with the purchase, Jovian agreed to assign to Rockdale all rights to be the operator of the SUDS unit under a standard operating agreement.
The 10% working interest acquired was for a 2,600-acre property located in Creek County, Oklahoma and carries a 7.8% net revenue interest (NRI) associated with it. Sohio Petroleum Inc. originally drilled this property in 1920 with approximately 100 wells existing. After being shut-in for a period of time the field was put back in production in March 2010 with 16 wells currently online and producing. There are plans to place additional wells online by repairing the remaining wells through well workovers.
Impairment of Oil & Gas Properties
Pursuant to Full-cost accounting rules, the Company recognized impairment expense relating to its oil & gas properties, subject to amortization in the amount of $0 and $668,073; during the three months and nine months ended on September 30, 2015, respectively. Impairment of oil & gas properties represents a non-cash charge against the Company’s earnings. We recognized the impairment based on SEC rules, which require proved oil and gas reserves to be valued using an unweighted arithmetic average of oil and gas prices on the first day of each month for the preceding twelve-month period.
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