Annual report pursuant to Section 13 and 15(d)

STATEMENTS OF CASH FLOWS

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STATEMENTS OF CASH FLOWS - USD ($)
 12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Cash Flows from Operating Activities    
Net loss $ (1,674,533) $ (894,506)
Adjustment to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 165,943 93,740
Accretion of debt discount 86,124 32,551
Loss on disposal of assets 10,945 6,999
Asset retirement obligation accretion 1,872 8,592
Stock-based compensation expense – employees 700,303 36,322
Stock-based compensation expense – consultants and directors 447,000 0
Changes in operating assets and liabilities    
Accounts receivable 32,300 (53,667)
Other assets 12,879 (5,455)
Accounts payable 48,485 7,048
Accrued liabilities (1,041) (12,363)
Deferred rent (4,172) (2,898)
Net cash flows used in operating activities (173,895) (783,637)
Cash Flows from Investing Activities    
Purchase property and equipment (15,803) (20,700)
Proceeds from sale of property and equipment 0 24,500
Capital expenditures on oil and gas properties (675,426) (376,995)
Cash flows used in investing activities (691,229) (373,195)
Cash Flows from Financing Activities    
Borrowings on convertible debt - related parties 0 550,000
Proceeds from issuance of common stock 780,024 0
Purchase of treasury stock 0 (900)
Net payments on notes payable (12,374) (1,149)
Cash flows provided by financing activities 767,650 547,951
Net change in cash and cash equivalents (97,474) (608,881)
Cash and cash equivalents    
Beginning of period 122,162 731,043
End of period 24,688 122,162
SUPPLEMENTAL DISCLOSURES    
Interest paid 0 0
Income taxes paid 0 0
NON-CASH INVESTING AND FINANCIAL DISCLOSURES    
Truck transferred to former CEO 41,636 0
Initial recognition of discount on related party debt 0 443,228
Initial recognition of asset retirement obligations 19,418 45,763
Change in estimated cash flows from asset retirement obligation 66,081 (74,777)
Fair value of stock issued for oil properties 0 433,000
Note payable for equipment $ 57,613 $ 42,785