Quarterly report pursuant to Section 13 or 15(d)

NOTE 8. ASSET ACQUISITIONS

v3.5.0.2
NOTE 8. ASSET ACQUISITIONS
 9 Months Ended
Sep. 30, 2016
Business Combinations [Abstract]  
Business Combination Disclosure [Text Block]
NOTE 8. ASSET ACQUISITIONS

SUDs Acquisition

On September 28, 2016, the Company acquired an additional 90% working interest ownership of SUDs through the issuance of a note payable for $4,000,000 as outlined above in note 4 and the issuance 24,308,985 shares of its restricted common stock, from a related party. The purchase price of the shares equates to a $4,373,186 value, based on the $0.1799/share market price of Petrolia’s shares on September 28, 2016. After the acquisition the company holds a total working interest ownership of 100%. The final purchase price allocation of the combined transactions is as follows: oil and gas properties acquired $8,765,438, asset retirement obligation assumed of $42,252

Twin Lakes Acquisition

On September 1, 2016, the Company acquired an additional 25% working interest ownership of TLSAU field located 45 miles from Roswell, Chavez County, New Mexico through the issuance of 3,500,000 shares of its restricted common stock with an unrelated party. The purchase price of the shares equates to a $350,000 value, based on the $0.10/share market price of Petrolia’s shares on September 1, 2016. After the purchase, the company holds a total working interest ownership of 40%. The final purchase price allocation of the transaction is as follows: oil and gas properties acquired $358,044, asset retirement obligation assumed of $8,044.

The below table represent the proforma financial statement to show the effects of the combined entity for the periods presented above:

   
Three Months ended September 30, 2016
    
Three Months ended September 30, 2015
  
 
                                    
   
Petrolia Energy
    
SUDS Properties
    
Combined
    
Petrolia Energy
    
SUDS Properties
    
Combined
  
Oil and gas sales
    
21,863
      
18,803
      
40,666
      
34,689
      
11,763
      
46,452
  
                                                 
Operating expenses
                                                
  LOE
    
47,621
      
53,726
      
101,347
      
45,368
      
18,304
      
63,672
  
  Production tax
    
1,074
      
1,355
      
2,429
      
1,447
      
847
      
2,294
  
  G&A expenses
    
508,329
              
508,329
      
122,203
      
-
      
122,203
  
  DD&A
    
15,764
              
15,764
      
19,727
      
-
      
19,727
  
  ARO
    
8,199
              
8,199
      
8,733
      
-
      
8,733
  
Total operating expenses
    
580,987
      
55,081
      
636,068
      
197,478
      
19,151
      
216,629
  
                                                 
Loss from operations
    
(559,124
)
    
(36,278
)
    
(595,402
)
    
(162,789
)
    
(7,388
)
    
(170,177
)
                                                 
Loss on conversion of debt
    
-
              
-
      
-
      
-
      
-
  
Other Income
    
16,385
              
16,385
      
10,000
      
-
      
10,000
  
Interest (expense)
    
(53,811
)
            
(53,811
)
    
(49,851
)
    
-
      
(49,851
)
                                                 
Net loss
    
(596,550
)
    
(36,278
)
    
(632,828
)
    
(202,640
)
    
(7,388
)
    
(210,028
)

   
Nine Months ended September 30, 2016
    
Nine Months ended September 30, 2015
  
 
            
   
Petrolia Energy
    
SUDS Properties
    
Combined
    
Petrolia Energy
    
SUDS Properties
    
Combined
  
Oil and gas sales
    
277,156
      
62,158
      
339,314
      
162,848
      
35,289
      
198,137
  
                                                 
Operating expenses
                                                
  Lease operating expense
    
155,424
      
300,290
      
455,714
      
179,422
      
54,911
      
234,333
  
  Cost of equipment sold
    
33,330
              
33,330
                        
  Production tax
    
3,846
      
4,478
      
8,324
      
7,364
      
2,541
      
9,905
  
  G&A expenses
    
1,139,432
              
1,139,432
      
365,686
      
-
      
365,686
  
  DD&A
    
50,964
              
50,964
      
78,937
      
-
      
78,937
  
  Impair O&G Properties
    
-
              
-
      
668,073
      
-
      
668,073
  
  ARO
    
21,232
              
21,232
      
8,733
      
-
      
8,733
  
Total operating expenses
    
1,404,228
      
304,768
      
1,708,996
      
1,308,215
      
57,452
      
1,365,667
  
                                                 
Loss from operations
    
(1,127,072
)
    
(242,610
)
    
(1,369,682
)
    
(1,145,367
)
    
(22,163
)
    
(1,167,530
)
                                                 
Loss on conversion of debt
    
(14,336
)
    
-
      
(14,336
)
    
(69,107
)
    
-
      
(69,107
)
Other Income
    
51,345
      
-
      
51,345-
      
18,484
      
-
      
18,484
  
Interest (expense)
    
(211,288
)
    
-
      
(211,288
)
    
(137,881
)
    
-
      
(137,881
)
                                                 
Net loss
    
(1,301,351
)
    
(242,610
)
    
(1,543,961
)
    
(1,333,871
)
    
(22,163
)
    
(1,356,034
)