Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Apr. 30, 2019 | Jun. 19, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | NORTHERN MINERALS & EXPLORATION LTD. | |
Entity Central Index Key | 0001415744 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --07-31 | |
Document Type | 10-Q | |
Document Period End Date | Apr. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 54,603,485 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Apr. 30, 2019 | Jul. 31, 2018 |
Current Assets: | ||
Cash | $ 63,733 | $ 52,672 |
Prepaid expenses | 0 | 3,500 |
Accounts receivable | 4,812 | 3,229 |
Stock subscription receivable | 0 | 20,000 |
Total Current Assets | 68,545 | 79,401 |
Other Assets | ||
Mineral rights and properties | 30,065 | 30,065 |
Oil and gas properties | 95,250 | 141,250 |
Total Other Assets | 125,315 | 171,315 |
TOTAL ASSETS | 193,860 | 250,716 |
Current Liabilities: | ||
Accounts payable | 70,407 | 85,146 |
Accounts payable - related party | 52,500 | 43,374 |
Accrued liabilities | 682,152 | 327,580 |
Current portion of property option payable | 0 | 116,000 |
Loans payable | 114,990 | 110,990 |
Loans payable - related party | 38,310 | 40,000 |
Total Current Liabilities | 958,359 | 723,090 |
Convertible debt - long term | 85,000 | 85,000 |
TOTAL LIABILITIES | 1,043,359 | 808,090 |
Commitments and Contingencies | ||
Stockholders' Deficit: | ||
Common stock, $0.001 par value, 75,000,000 shares authorized; 54,603,485 and 48,286,818 shares issued and outstanding, respectively | 54,605 | 48,287 |
Common stock to be issued | 20,000 | 50,000 |
Additional paid-in-capital | 1,965,267 | 1,736,835 |
Accumulated deficit | (2,889,371) | (2,392,496) |
Total Stockholders' Deficit | (849,499) | (557,374) |
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT | $ 193,860 | $ 250,716 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Apr. 30, 2019 | Jul. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ .001 | $ .001 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 54,603,485 | 48,286,818 |
Common stock, shares outstanding | 54,603,485 | 48,286,818 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenue | $ 13,056 | $ 18,518 | $ 30,137 | $ 46,577 |
Distributions | 2,865 | 21,891 | 18,350 | 49,650 |
Gross margin | 10,191 | (3,373) | 11,787 | (3,073) |
Operating expenses: | ||||
Officer compensation | 0 | 15,000 | 15,000 | 42,500 |
Director services | 15,000 | 1,500 | 45,000 | 3,500 |
Consulting | 5,000 | 10,500 | 15,000 | 68,500 |
Professional fees | 7,734 | 23,025 | 32,984 | 42,650 |
Advertising and promotion | 0 | 51,241 | 38,485 | 107,955 |
Mineral property expenditures | 30,032 | 57,666 | 407,053 | 73,948 |
General and administrative | 13,000 | 33,951 | 29,377 | 81,250 |
Total operating expenses | 70,766 | 192,883 | 582,899 | 420,303 |
Loss from operations | (60,575) | (196,256) | (571,112) | (423,376) |
Other income (expense): | ||||
Interest expense | (2,399) | (4,143) | (14,513) | (14,012) |
Loss on disposal of mineral rights | 0 | 0 | (46,000) | 0 |
Loss on conversion of debt | 0 | (6,000) | 0 | (6,000) |
Other income | 0 | 0 | 116,000 | 0 |
Gain on forgiveness of debt | 0 | 0 | 18,750 | 4,120 |
Total other income (expense) | (2,399) | (10,143) | 74,237 | (15,892) |
Loss before provision for income taxes | (62,974) | (206,399) | (496,875) | (439,268) |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net Loss | $ (62,974) | $ (206,399) | $ (496,875) | $ (439,268) |
Loss per share, basic and diluted | $ 0 | $ 0 | $ (0.01) | $ (0.01) |
Weighted average shares outstanding, basic and diluted | 52,923,710 | 42,736,031 | 49,893,144 | 39,210,382 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity (Deficit) (Unaudited) - USD ($) | Common Stock | Additional Paid-in Capital | Common Stock To be Issued | Accumulated Deficit | Total |
Beginning balance, shares at Jul. 31, 2017 | 26,797,818 | ||||
Beginning balance at Jul. 31, 2017 | $ 26,798 | $ 1,239,349 | $ (1,622,720) | $ (356,573) | |
Common stock issued for cash, shares | 10,500,000 | ||||
Common stock issued for cash | $ 10,500 | 114,500 | 125,000 | ||
Net loss | (97,430) | (97,430) | |||
Ending balance, shares at Oct. 31, 2017 | 37,297,818 | ||||
Ending balance at Oct. 31, 2017 | $ 37,298 | 1,353,849 | (1,720,150) | (329,003) | |
Beginning balance, shares at Jul. 31, 2017 | 26,797,818 | ||||
Beginning balance at Jul. 31, 2017 | $ 26,798 | 1,239,349 | (1,622,720) | (356,573) | |
Common stock issued for debt | 4,000 | ||||
Net loss | (439,268) | ||||
Ending balance, shares at Apr. 30, 2018 | 43,286,818 | ||||
Ending balance at Apr. 30, 2018 | $ 43,288 | 1,648,259 | (2,061,988) | (370,441) | |
Beginning balance, shares at Jul. 31, 2017 | 26,797,818 | ||||
Beginning balance at Jul. 31, 2017 | $ 26,798 | 1,239,349 | (1,622,720) | $ (356,573) | |
Common stock issued for cash, shares | 16,559,000 | ||||
Common stock issued for cash | $ 219,475 | ||||
Ending balance, shares at Jul. 31, 2018 | 48,286,818 | ||||
Ending balance at Jul. 31, 2018 | $ 48,287 | 1,736,835 | $ 50,000 | (2,392,496) | (557,374) |
Beginning balance, shares at Oct. 31, 2017 | 37,297,818 | ||||
Beginning balance at Oct. 31, 2017 | $ 37,298 | 1,353,849 | (1,720,150) | (329,003) | |
Common stock issued for cash, shares | 4,200,000 | ||||
Common stock issued for cash | $ 4,201 | 163,798 | 167,999 | ||
Net loss | (135,439) | (135,439) | |||
Ending balance, shares at Jan. 31, 2018 | 41,497,818 | ||||
Ending balance at Jan. 31, 2018 | $ 41,499 | 1,517,647 | (1,855,589) | (296,443) | |
Common stock issued for cash, shares | 1,589,000 | ||||
Common stock issued for cash | $ 1,589 | 120,812 | 122,400 | ||
Common stock issued for debt, shares | 200,000 | ||||
Common stock issued for debt | $ 200 | 9,800 | 10,000 | ||
Net loss | (206,399) | (206,399) | |||
Ending balance, shares at Apr. 30, 2018 | 43,286,818 | ||||
Ending balance at Apr. 30, 2018 | $ 43,288 | 1,648,259 | (2,061,988) | (370,441) | |
Beginning balance, shares at Jul. 31, 2018 | 48,286,818 | ||||
Beginning balance at Jul. 31, 2018 | $ 48,287 | 1,736,835 | 50,000 | (2,392,496) | (557,374) |
Common stock issued for services, shares | 150,000 | ||||
Common stock issued for services | $ 150 | 9,600 | 9,750 | ||
Common stock issued for cash | 50,000 | 50,000 | |||
Net loss | (110,027) | (110,027) | |||
Ending balance, shares at Oct. 31, 2018 | 48,436,818 | ||||
Ending balance at Oct. 31, 2018 | $ 48,437 | 1,746,435 | 100,000 | (2,502,523) | (607,651) |
Beginning balance, shares at Jul. 31, 2018 | 48,286,818 | ||||
Beginning balance at Jul. 31, 2018 | $ 48,287 | 1,736,835 | 50,000 | (2,392,496) | $ (557,374) |
Common stock issued for services, shares | 150,000 | ||||
Common stock issued for services | $ 97,500 | ||||
Common stock issued for cash, shares | 4,166,667 | ||||
Common stock issued for cash | $ 145,000 | ||||
Common stock issued for debt | 0 | ||||
Net loss | (496,875) | ||||
Ending balance, shares at Apr. 30, 2019 | 54,603,485 | ||||
Ending balance at Apr. 30, 2019 | $ 54,605 | 1,965,267 | 20,000 | (2,889,371) | (849,499) |
Beginning balance, shares at Oct. 31, 2018 | 48,436,818 | ||||
Beginning balance at Oct. 31, 2018 | $ 48,437 | 1,746,435 | 100,000 | (2,502,523) | (607,651) |
Common stock issued for cash | 50,000 | 50,000 | |||
Net loss | (323,874) | (323,874) | |||
Ending balance, shares at Jan. 31, 2019 | 48,436,818 | ||||
Ending balance at Jan. 31, 2019 | $ 48,437 | 1,746,435 | 150,000 | (2,826,397) | (881,525) |
Common stock issued for cash, shares | 6,166,667 | ||||
Common stock issued for cash | $ 6,168 | 218,832 | (130,000) | 95,000 | |
Net loss | (62,974) | (62,974) | |||
Ending balance, shares at Apr. 30, 2019 | 54,603,485 | ||||
Ending balance at Apr. 30, 2019 | $ 54,605 | $ 1,965,267 | $ 20,000 | $ (2,889,371) | $ (849,499) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Cash Flow from Operating Activities: | ||
Net loss | $ (496,875) | $ (439,268) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock compensation expense | 9,750 | 0 |
Loss on disposal of mineral rights | 46,000 | 0 |
Gain on write-off of option payable | (116,000) | 0 |
Loss on conversion of debt | 0 | 6,000 |
Changes in Operating Assets and Liabilities: | ||
Prepaid expenses | 3,500 | (3,500) |
Accounts receivable | (1,583) | (1,570) |
Accounts payables and accrued liabilities | 339,833 | 90,928 |
Accounts payable - related party | 9,126 | 0 |
Advances for well work | 0 | 0 |
Stock subscription receivable | 20,000 | 0 |
Net cash used in operating activities | (186,249) | (347,410) |
Cash Flows from Investing Activities: | ||
Cash paid for oil and gas properties | 0 | (72,322) |
Net cash used in investing activities | 0 | (72,322) |
Cash Flows from Financing Activities: | ||
Proceeds from loan payable | 9,000 | 25,000 |
Repayment of loan payable | (5,000) | 0 |
Proceeds from loans payable - related party | 54,180 | 0 |
Payments on loans payable - related party | (55,870) | 0 |
Proceeds from the sale of common stock | 195,000 | 415,400 |
Net cash provided by financing activities | 197,310 | 440,400 |
Net increase in cash | 11,061 | 20,668 |
Cash at beginning of the period | 52,672 | 822 |
Cash at end of the period | 63,733 | 21,490 |
Cash paid for interest | 870 | 0 |
Cash paid for taxes | 0 | 0 |
Supplemental disclosure of non-cash activity: | ||
Common stock issued for debt | $ 0 | $ 4,000 |
Organization and Business Opera
Organization and Business Operations | 9 Months Ended |
Apr. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business Operations | Northern Minerals & Exploration Ltd. (the “Company”) is an emerging natural resource company operating in oil and gas production in central Texas and exploration for gold and silver in northern Nevada. The Company was incorporated in Nevada on December 11, 2006 under the name Punchline Entertainment, Inc. On August 22, 2012, the Company’s board of directors approved an agreement and plan of merger to effect a name change of the Company from Punchline Entertainment, Inc. to Punchline Resources Ltd. On July 12, 2013, the stockholders approved an amendment to change the name of the Company from Punchline Resources Ltd. to Northern Mineral & Exploration Ltd. FINRA approved the name change on August 13, 2013. On November 22, 2017, the Company created a wholly owned subsidiary, Kathis Energy LLC (“Kathis”) for the purpose of conducting oil and gas drilling programs in Texas. On December 14, 2017, Kathis Energy, LLC and other Limited Partners, created Kathis Energy Fund 1, LP, a limited partnership created for raising investor funds. On May 7, 2018, the Company created ENMEX LLC, a wholly owned subsidiary in Mexico, for the purposes of managing and operating its investments in Mexico including but not limited to the Joint Venture opportunity being negotiated with Pemer Bacalar on approximately 61 acres on the Bacalar Lagoon on the Yucatan Peninsula. There was no activity from inception to date. The Company is working on the following projects: ENMEX Operations LLC – Wholly owned Subsidiary - Pemer Bacalar – Resort Development Project During the quarter ended October 31, 2017, the Company entered into a Letter of Intent with Pemer Bacalar SAPI DE CV (“Pemer Bacalar”) on September 22, 2017 to examine the opportunity of acquiring ownership in approximately 61 acres (“Property”) on a freshwater lagoon near the community of Bacalar, Mexico in the state of Quintana Roo for the purpose of entering into a joint venture for the potential development of the Property into a resort. On November 16, 2017, subsequent to the end of the quarter, the Company entered into a Memorandum of Understanding (“MOU”) in order to further conduct due diligence toward this potential project. An amended MOU was entered into on April 13, 2018 setting forth the conditions for entering into a definitive agreement with Pemer Bacalar. The amended MOU of April 13, 2018 expired on June 15, 2018; however. The Company entered into a preliminary joint venture agreement (the “Agreement”) on June 11, 2019 with a private Mexican entity to work together on the raising of capital funds necessary to build a 68 room Waterfront Hotel & Resort & 92 residential Jungle villas, Cenote Villas, 4 bars & restaurants, clubhouse, tennis, aquatic center, wellness center & etc on a beautiful property (the “Property”) situated on the Caribbean coast of the Yucatan Peninsula, in the State of Quintana Roo, Mexico. Under the terms of the Agreement Northern has the right to participate for a 20% interest in the Property. The Property consists of approximately 207.5 Acres +/- (84 Ha) and 3,444.8 ft (1050 meters) Lagoon front plus 1033.4 ft (315 meters) waterfront. Coleman County, Texas – Three well rework/re-completion project On October 14, 2014, we entered into an agreement to acquire the 206.5 acre J.E. Richey oil and gas lease. This lease area has six known productive formations. The existing three wells on the lease are fully equipped. Beginning in May 2015 we started conducting operations on the three wells to place them back into production. The rework/re-completion was completed on July 28, 2015 and production of oil and gas was established. Additional work was conducted on J. E. Richey lease during the fiscal year ended July 31, 2018. No additional work was performed during the nine months ended April 30, 2019. As of April 30, 2019, management determined that the $96,000 asset carried on the balance sheet was impaired resulting in a loss on impairment of $46,000. Kathis Energy LLC – Wholly owned Subsidiary The Company created a wholly owned subsidiary, Kathis Energy LLC (“Kathis”), on November 22, 2017 for the purpose of conducting oil and gas drilling programs in Texas. The Company agreed to assign to Kathis the Olson and Guy Ranch leases in exchange for $126,500. Both of these oil and gas leases have expired. Jones County, Texas – Palo Pinto Reef project During the fiscal year ended July 31, 2016 the Company acquired the Olson lease covering 160 acres in Jones County, Texas. This lease is 1.5 miles from the Strand Palo Pinto Reef Field which was discovered in 1940 and has produced 1,700,000 barrels of oil from 8 wells or 212,500 barrels of oil per well. The structure map on the Palo Pinto shows a large buildup in the Palo Pinto Reef across the southern portion of the lease. No work was performed during the nine months ended April 30, 2019. The lease expired in April 2019. Shackelford County, Texas – Guy Ranch Project During the fiscal year ended July 31, 2016 the Company acquired 692-acres divided into two tracts Guy Ranch Lease in Shackelford County. The Guy Ranch lease is located in the southern part of Shackelford County. The Ranch has 32 wind turbines on it representing it is at a structurally higher elevation. The principal targets for this drilling prospect is the Patio (aka Palo Pinto Sand) and Morris Sands the area is also known to be productive from three other formations on the Guy Ranch acreage. This oil and gas lease expired on December 16, 2018. All associated expenditures have been fully expensed. Riverside Prospects, Runnels County, Texas On October 20, 2017 the Company entered into an exclusive option agreement with Murphree Oil Company to acquire drilling prospects on four leases in Runnels County near the City of Ballinger, known as the Riverside Prospects. During the quarter ended April 30, 2018, the Company, through its wholly owned subsidiary, Kathis Energy LLC, (“Kathis”) paid the lease bonuses for extending the oil and gas lease period on 548.76 acres covering the Riverside Prospects. This acreage consists of 4 leases in a well established area where oil and gas production was discovered during 1978 – 1983. On November 2, 2018 a fresh option agreement was entered into for the Riverside Leases. The Option Agreement expired on December 31, 2018. 89 Guy #4 Well – Cased Hole On April 16, 2018, Kathis Energy acquired the 89 Guy Well #4 located on a 20-acre tract on the Guy Ranch property in Shackelford County, Texas. The well is an abandoned cased well that was drilled in October 2010 and completed in the Patio Sand at the interval of 3,144’ - 3,154’. The interval perforated (3,144 – 3,154’) is above the best productive part of the formation. No work was conducted during the nine months ended April 30, 2019. McClure 2B Gas Well – Producing On February 6, 2018 the Company acquired the McClure # 2B producing gas well on a 40-acre oil & gas lease located in Palo Pinto County near the Community of Graford, Texas. The McClure 2B well is completed in the Strawn in the interval 2,882’ to 2,940’ and has produced in excess of 70 million cubic feet of natural gas. No work was performed during the nine months ended April 30, 2019. Carter & Foster Wells – Producing During the fiscal year ended July 31, 2018 the Company acquired the Carter and Foster wells located west of the Community of Atwell, Texas in Callahan County. The Carter lease consists of 40 acres and has one well. The Foster lease has 10 acres around each well of the three wells, all of which are fully equipped with surface and subsurface equipment. All four wells are completed in the Palo Pinto Limestone formation at approximately 1,900 feet. No work was performed during the nine months ended April 30, 2019. Reeves Lease – Acreage – Palo Pinto Reef Prospect In August 2018 the Company paid for the geological prospecting fees for a Palo Pinto Reef prospect in Jones County. The Reeves lease covers 160 acres and is located near Noodle, Texas in Jones County. The projected depth of the Palo Pinto Reef is 4,300’. During the quarter the third party that paid for the lease agreed to return the lease bonus due to not being able to obtain all parties signatures for obtaining a lease. The Company is seeking to recover its geological fees paid in 2018. Winnemucca Mountain Gold Property, Nevada As previously announced, on September 14, 2012, we entered into an option agreement (as last amended on February 11, 2016) with AHL Holdings Ltd., and Golden Sands Exploration Inc., wherein we acquired an option to purchase an 80% interest in and to certain mining claims, which claims form the Winnemucca Mountain Property in Humboldt County, Nevada (“Property”). This Winnemucca Mountain property currently is comprised of 138 unpatented mining claims covering approximately 2700 acres. On July 23, 2018, the Company entered into a New Option Agreement with AHL Holding Ltd & Golden Sands Exploration Inc. (“Optionors”). This agreement provided for the payment of $25,000 and the issuance of 3,000,000 shares of the Company’s common stock and work commitments. The Company issued the shares and made the initial payment of $25,000 per the terms of the July 31, 2018 agreement. The second payment of $25,000 per the terms of the agreement was not paid when it became due on August 31, 2018 causing the Company to default on the terms of the July 23, 2018 agreement. On March 25, 2019 the Company entered into a New Option Agreement with the Optionors. As stated in the New Option Agreement the Company has agreed to certain terms and conditions to have the right to earn an 80% interest in the Property, these terms include cash payments, issuance of common shares of the Company and work commitments. During the quarter ended April 30, 2019 the Company engaged an independent geologist to conduct geological studies to prepare a recommendation of a work program for the Winnemucca Property. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Apr. 30, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Basis of presentation The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying unaudited condensed financial statements reflect all adjustments, consisting of only normal recurring items, which, in the opinion of management, are necessary for a fair statement of the results of operations for the periods shown and are not necessarily indicative of the results to be expected for the full year ending July 31, 2019. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended July 31, 2018. Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the 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 may differ from those estimates. Reclassifications Certain re-classifications have been made to the prior year financial information to conform to the presentation used in the unaudited financial statements for the nine months ended April 30, 2019. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Kathis Energy LLC, Kathis Energy Fund 1, LLP and Enmex Operations LLC. All financial information has been prepared in conformity with accounting principles generally accepted in the United States of America. All significant intercompany transactions and balances have been eliminated. Revenue Recognition Revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that an entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company's performance obligations are transferred to customers at a point in time, typically upon delivery. Revenues are earned from the J.E. Richey Lease both in selling oil and gas and from funds received for reworking the Concho Richey #1. We began earning revenues in Q1 of 2015 from the J.E. Richey Lease. Revenues resumed from the sale of oil and gas during the second quarter of the 2016/17 fiscal year. Long-Lived Assets Property consists of mineral rights purchases as stipulated by underlying agreements and payments made for oil and gas exploration rights. Our company assesses the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. When we determine that the carrying value of long-lived assets may not be recoverable based upon the existence of one or more indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, we record an impairment charge. Our company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent in the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows. Mineral Property Acquisition and Exploration Costs Mineral property acquisition and exploration costs are expensed as incurred until such time as economic reserves are quantified. Cost of lease, exploration, carrying and retaining unproven mineral lease properties are expensed as incurred. We have chosen to expense all mineral exploration costs as incurred given that it is still in the exploration stage. Once our company has identified proven and probable reserves in its investigation of its properties and upon development of a plan for operating a mine, it would enter the development stage and capitalize future costs until production is established. When a property reaches the production stage, the related capitalized costs will be amortized over the estimated life of the probable-proven reserves. When our company has capitalized mineral properties, these properties will be periodically assessed for impairment of value and any diminution in value. Oil and Gas Properties The Company applies the successful efforts method of accounting for oil and gas properties. The Company capitalizes asset acquisition costs of mineral rights and leases. Unproved oil and gas properties are periodically assessed to determine whether they have been impaired, and any impairment in value is charged to expense. The costs of proved properties will be depleted on an equivalent unit-of-production basis in which total proved reserves will be the base used to calculate depletion. Basic and Diluted Earnings Per Share Net income (loss) per common share is computed pursuant to ASC 260-10-45, Earnings per Share—Overall—Other Presentation Matters As of April 30, 2019, and 2018, the Company had 4,736,271 and 3,575,913 potentially dilutive shares; however, the diluted loss per share is the same as the basic loss per share for the three and nine months ended April 30, 2019 and 2018, as the inclusion of any potential shares would have had an antidilutive effect due to our loss from operations. Recently Issued Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
Going Concern
Going Concern | 9 Months Ended |
Apr. 30, 2019 | |
Going Concern [Abstract] | |
Going Concern | The accompanying unaudited condensed consolidated financial statements are prepared and presented on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, they do not include any adjustments relating to the realization of the carrying value of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Since inception to April 30, 2019, the Company has an accumulated deficit of $2,889,371. The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the next twelve months. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Mineral Rights and Properties
Mineral Rights and Properties | 9 Months Ended |
Apr. 30, 2019 | |
Extractive Industries [Abstract] | |
Mineral Rights and Properties | Beauregard Parish, Louisiana - North High Prospect On December 7, 2018, the Company entered into a Memorandum of Understanding with EnergyFunders, LLC to set forth the terms and conditions to jointly operate and pursue oil & gas projects. It was mutually agreed to create EF NMEX 18, LP, in order to jointly promote domestic oil and gas drilling projects. The first project in which EnergyFunders and NMEX will participate is the drilling of a seismic structure in the Beauregard Parish of Louisiana, known as the Northside High Prospect. The target depth is 7,300 feet to test the Cockfield (Yegua) Sand. Notable wells in the area have produced more than 200,000 barrels of oil from a single well. Drilling of this well is scheduled to begin during the summer of 2019. NMEX has agreed to provide certain completion costs to acquire up to 8% of the working interest in this well. Coleman County, Texas – J.E. Richey Lease On October 14, 2014, the Company entered into a Terms of Farm-out Agreement with Copper Basin Oil & Gas Inc. to acquire a working interest in an oil and gas lease in the J.E. Richey lease, which had 3 fully equipped wells, production flow lines, injection flow line, Tank battery consisting of two 300 BBL tanks, one 210 BBL tank with two separators. The Company agreed to acquire a 75% working interest in the lease including the existing wells and equipment. The total consideration that the Company must pay to acquire the 75% working interest is estimated at $336,000, which amount includes all work requirements, and common stock valued at $0.10 based upon our current share price of $0.11 as at October 14, 2014. The Net Revenue Interest is 56.25% and consists of approximately 206.5 acres, more or less, in Coleman County, Texas. This lease has no depth limit. On March 20, 2015, the Company entered into a multi-well purchase and sale agreement with EF VC2, LLC to sell a 37.5% working interest (“WI”) in the 3 wells for total consideration of $180,000. Under the terms of the agreement both parties will receive a 50.0% of the WI revenue from these three wells until EF VC2 recaptures their investment of $180,000 (defined as “Payout”). After Payout EF VC2 will revert to a 37.5% of the WI revenue for the remaining life of the production from the three wells. We were successful in the re-completion of the Concho Richey #1 well on the J.E. Richey Lease in the Gray formation in July 2015. The Concho Richey well came in with initial production rates of 65 barrels of oil per day and 100 MCF of gas per day. We hold a 25% working interest in one producing well (“Concho Richey #1”) on the lease and a 100% working interest in the remainder of the 206-acre J. E Richey Lease. The Concho Richey well was shut in due to a hole coming in to the casing which was repaired in the quarter ended October 31, 2016. No revenues were received during the quarter from the Concho Richey well, subsequently repairs were made to the well. Repairs made to the well to squeeze off the holes in the casing were successful. Revenues from the sale of oil and gas resumed during the year ended July 31, 2017. The Concho Richey #1 well is currently producing 5 barrels of oil and 31 MCF of gas per day. During August 2017 further work was conducted on the J.E. Richey #1 well during August 2017, which determined the casing in this well was beyond being repaired. A decision was made to plug this well. The Richey #1 well was plugged on January 3, 2018. Further work is planned during the next fiscal year on the J. E. Richey lease on well #3 in an effort to improve its production. No work was conducted on the J.E. Richey Lease during the nine months ended April 30, 2019. Humbolt County, Nevada - Winnemucca Mountain Property As previously announced, on September 14, 2012, we entered into an option agreement (as last amended on February 11, 2016) with AHL Holdings Ltd., and Golden Sands Exploration Inc., wherein we acquired an option to purchase an 80% interest in and to certain mining claims, which claims form the Winnemucca Mountain Property in Humboldt County, Nevada (“Property”). This Winnemucca Mountain property currently is comprised of 138 unpatented mining claims covering approximately 2700 acres. On July 23, 2018, the Company entered into a New Option Agreement with AHL Holding Ltd & Golden Sands Exploration Inc. (“Optionors”). This agreement provided for the payment of $25,000 and the issuance of 3,000,000 shares of the Company’s common stock and work commitments. The Company issued the shares and made the initial payment of $25,000 per the terms of the July 31, 2018 agreement. The second payment of $25,000 per the terms of the agreement was not paid when it became due on August 31, 2018 causing the Company to default on the terms of the July 23, 2018 agreement. On March 25, 2019 the Company entered into a New Option Agreement with the Optionors. As stated in the New Option Agreement the Company has agreed to certain terms and conditions to have the right to earn an 80% interest in the Property, these terms include cash payments, issuance of common shares of the Company and work commitments. During the quarter ended April 30, 2019 the Company engaged an independent geologist to conduct geological studies to prepare a recommendation of a work program for the Winnemucca Property. Jones County, Texas – Olson Lease We had a 100% interest in the 160-acre oil and gas Olsen lease located in the north central part of Jones County, Texas. The principal target formation is the Palo Pinto Reef. The Palo Pinto Reef is a known productive formation in the area with a high yield of cumulative oil production. An example in the area is the Strand Oil Field which is a Palo Pinto Reef Oil Field. The field discovered in 1940, consists of only 8 wells on approximately 160 acres produced a total of 1,700,000 barrels of oil, an average of 212,500 barrels of oil per oil well. The 160 Olson Lease lies approximately 1.5 miles southeast of the Strand Palo Pinto Reef Oil Field. We hold 100% of the working interest in this lease. The lease expired on April 27, 2019. No work was conducted on the Olson lease during the quarter ended April 30, 2019. The Company had agreed to assign its interest and rights to the 160-acre Olson Lease to Kathis Energy LLC, a wholly owned subsidiary of the Company in exchange for a $60,500 loan. Shackleford County, Texas – Guy Ranch Lease During the fiscal year ended July 31, 2016 the Company acquired a 100% working interest in a 692-acre Guy Ranch Lease divided into two tracts. Tract 1 covers 480 acres and Tract 2 covers 212 acres. The Ranch has 32 wind turbines on it representing it is at a structurally higher elevation. The principal targets for this drilling prospect is the Patio (aka Palo Pinto Sand) and Morris Sands the area is also known to be productive from three other formations on the Guy Ranch acreage. The first project on the Guy Ranch was to re-complete a cased well in the Morris formation that was reportedly untested. The structure of the deal was for a third party to pay 100% of the costs re-complete the cased well in the Morris formation allocating 20 acres out of the 450 acres in order to earn a 75% working interest in the cased well. All records filed with the Texas Railroad Commission supported that no attempt to produce from the Morris had been performed. However, it was subsequently found out that in fact an attempt was made to re-complete in Morris formation and such attempt was unsuccessful due to an over stimulation of the Morris with a large frac at high pumping rate. The well produced mostly water. The 20 acres around the well was not assumed by the Company or its third-party investors. The unused funds provided by the third party will be allocated to a new well on the Guy Ranch Lease with the third party being responsible for providing the balance of the funds to drill and complete a new well in order to earn 75% of the working interest. During the fiscal year ended July 31, 2018 the Company agreed to convey the Guy Ranch lease to Kathis Energy LLC, its wholly owned subsidiary, for its drilling program for the consideration of $66,500. In March 2018 Kathis Energy LLC, our wholly owned subsidiary, staked two drilling locations on the Guy Ranch and prepared one drilling location. This drilling location is a direct offset to a Patio Sand well that came in at 140 barrels per day. The Patio Sand is one of the main producing formations in the area generally averages between 25,000 and 75,000 barrels oil per well. The Morris Sand a notable gas producer is known to produce up to 1.4 BCF gas from one well and the Gardner is noted in this area to produce between 50,000 and 110,000 barrels per well. The Net Revenue Interest for the Guy Ranch lease is 75%. The Guy Ranch Lease expired on December 16, 2018. Shackelford County, Texas 89 Guy #4 Well – Cased Well The 89 Guy Well #4 is located on the Guy Ranch property in Shackelford County. The well is an abandoned cased well that was drilled in October 2010 and completed in the Patio Sand at the interval of 3,144’ - 3,154’. This interval produced 2 barrels of oil and 20 thousand cubic feet of natural gas from a 100 sac gel frac. The interval perforated (3,144 – 3,154’) is above the best productive part of the formation. The cased well was purchased from the mineral owner through an independent geologist followed by an application to the Texas Railroad Commission to assume liability of the case well. The application is still pending approval. Kathis Energy has a 80% net revenue interest in the 20 acre lease with the cased well and owns 100% of the working interest. Kathis has until April 17, 2019 to bring the well back into production. Kathis paid $22,500 for the cased well. No work was conducted on the Guy Ranch cased well 89 Guy #4 during the nine months ended April 30, 2019. Palo Pinto County, Texas - McClure 2B – Gas Well On February 6, 2018 the Company acquired the McClure # 2B producing gas well on a 40 -acre oil & gas lease located in Palo Pinto County near the Community of Graford, Texas. The McClure 2B well was drilled in 2006 to a total depth of 4,739’ and was re-completed in the Strawn formation in January 2011. The McClure 2B gas well is among a large number of gas wells that are producing in the area from the Strawn formation. The location of the McClure 2B gas well is 1 mile southwest of the Community of Graford, Texas in Palo Pinto County on a 40 acre tract. The lease is off a main county road and the lease road can have washouts depending on the amount of rain as the McClure 2B gas well is on top of a hill. There are two natural gas lines 1) high pressure and the 2) is low pressure. The Company paid $25,000 for this gas well. The Net Revenue Interest for the McClure lease is 75% and the lease is held by existing production. The Company entered into an agreement with a third party to acquire and rework/re-complete the well in one or more of the other intervals in the Strawn formation in the well. As of the date of this report no work has been conducted toward the reworking/re-completing in this well. Upon the third party recovering its investment the Company will receive 40% of the Net Revenue Interest. No work was conducted on the McClure 2B, gas well, during the nine months ended April 30, 2019 Callahan County, Texas Carter & Foster Wells – Producing: History and Background: The wells on the Carter and Foster leases were drilled in 1992-93. Most of the wells were treated with 5,000 gallons of 21% acid and yielded initial rates of production of 40 barrels of oil per day then gradually declined to 3 barrels per day by the end of the first year. The wells now are 25 plus years old and are producing 90% or better oil cut in the fluid being produced. The production is very nominal at the present time however no secondary acid stimulation has been conducted since they were originally brought into production in the early 1990s. All four wells on the Carter and Foster leases are fully equipped and have their own production facilities and have electricity to each of the wells. These wells are marginal producing oil wells producing approximately 20 barrels per month with little to no formation water. The objective is to conduct a large multiple stage acid job on three of the four wells to significantly enhance daily production rates. The Carter and Foster wells are located west of the Community of Atwell, Texas in Callahan County. The Carter lease consists of 40 acres and has one well. The Foster lease has 10 acres around each well of the three wells, all of which are fully equipped with surface and subsurface equipment. The Carter and Foster have good access to an all-weather county road and the lease roads provide good access to each well. The Net Revenue Interest for the Carter lease is 75% and the lease is held by existing production. The Net Revenue Interest for the Foster lease is 60% and the lease is held by existing production. The Company entered into an agreement with a third party to acquire and rework Palo Pinto formation by conducting the multiple staged acid jobs on three wells. During the year the Company has placed new electric motors on all four wells, changed out the down hole pumps and placed the wells into production. As of the date of this report the Company has not conduced the multiple staged acid job on any of the three wells. Upon the third party recovering its investment the Company will receive 40% of the Net Revenue Interest. The Carter and Foster leases/wells were acquired from an Officer of the Company for total consideration of $1.00. No work was conducted on the Carter/Foster leases during the nine months ended April 30, 2019 Reeves Lease – Palo Pinto Reef – Jones County, Texas The Company has paid for the geological prospecting fees for a Palo Pinto Reef prospect in Jones County. The Reeves lease covers 160 acres and is located near Noodle, Texas in Jones County. The projected depth of the Palo Pinto Reef is 4,300’. Excellent well control by 6 Strawn wells provides evidence of a Palo Pinto Reef showing a structure 48’ high to other wells. The nearest Palo Pinto Reef well to the Reeves Lease made more than 150,000 barrels from one well. The lease bonus money of $28,000 was provided by a third party for a two-year lease and the Company paid the geological prospect fee of $10,000. It was verbally understood between the Company and third party to promote this drilling prospect seeking to retain a carried interest plus recoup the lease and prospect monies. The Net Revenue of the lease is 80%. The lease term is 2 years. Plans are to deliver a 75% net revenue lease to a drilling partner retaining an overriding royalty and a carried working interest in the drilling in the well. During the quarter ended April 30, 2019, it was discovered that not all of the minerals were leased resulting in the lease not being available for transfer to a drilling partner. Lease bonus money and geological fees paid are being recaptured by both the Company and the third party during the third quarter. Riverside Prospects, Runnels County, Texas On October 20, 2017 the Company entered into an exclusive option agreement with Murphree Oil Company to acquire drilling prospects on four leases in Runnels County near the City of Ballinger, known as the Riverside Prospects. During the quarter ended April 30, 2018, the Company, through its wholly owned subsidiary, Kathis Energy LLC, (“Kathis”) paid the lease bonuses for extending the oil and gas lease period on 548.76 acres covering the Riverside Prospects. On November 2, 2018 a fresh option agreement was entered into for the Riverside Leases. This acreage consists of 4 leases in a well established area where oil and gas production was discovered during 1978 – 1983. The option expired on December 31, 2018. All associated expenditures have been fully expensed. |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Apr. 30, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued liabilities consist of $349,000 for firm commitments on the Winnemucca Property |
Convertible Debt
Convertible Debt | 9 Months Ended |
Apr. 30, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Debt | On August 22, 2013 the Company entered into a $50,000 Convertible Loan Agreement with an un-related party. The Loan and interest are convertible into Units at $0.08 per Unit with each Unit consisting of one common share of the Company and ½ warrant with each full warrant exercisable for one year to purchase one common share at $0.30 per share. On July 10, 2014, a further $35,000 was received from the same unrelated party under the same terms. On July 31, 2018, this Note was amended whereby the principal and interest are now convertible into Units at $0.04 per Unit with each Unit consisting of one common share of the Company and ½ warrant with each full warrant exercisable for one year to purchase one common share at $0.08 per share. The Loan shall bear interest at the rate of Eight Percent (8%) per annum and matures on March 26, 2020. As of April 30, 2019, there is $85,000 and $41,468 of principal and accrued interest, respectively, due on this loan. On October 20, 2017, the Company executed a convertible promissory note for $25,000 with a third party. The note accrues interest at 6%, matures in two years and is convertible into shares of common stock at maturity, at a minimum of $0.10 per share, at the option of the holder. As of April 30, 2019, there is $25,000 and $2,367 of principal and accrued interest due on this loan, respectively. This loan is due on October 20, 2019. |
Common Stock
Common Stock | 9 Months Ended |
Apr. 30, 2019 | |
Equity [Abstract] | |
Common Stock | During the year ended July 31, 2018, the Company sold 16,559,000 shares of common stock for total cash proceeds of $219,475; $20,000 of which had not yet been received as of July 31, 2018. The $20,000 was received in the quarter ended October 31, 2018. In addition, 1,000,000 shares of those sold were not issued as of July 31, 2018 and have therefore been credited to common stock to be issued. The 1,000,000 shares were issued in February 2019. During the nine months ended April 30, 2019, the Company issued 150,000 shares of common stock to two individuals as consideration for their support with the Richey #2A project. The shares were valued at $0.065 per share, the closing price on the date of grant, for total non-cash expense of $9,750. During the nine months ended April 30, 2019, the Company sold 1,000,000 Units of its common stock for total cash proceeds of $50,000. Each Unit consists of one common share and one-half share purchase warrant exercisable for 2 years. Each whole share purchase warrant has an exercise price of $0.15 per common share. During the nine months ended April 30, 2019, the Company sold 4,166,667 shares of common stock for total cash proceeds of $145,000. As of April 30, 2019, 400,000 shares have not yet been issued by the transfer agent and have therefore been credited to common stock to be issued. |
Warrants
Warrants | 9 Months Ended |
Apr. 30, 2019 | |
Warrants [Abstract] | |
Warrants | Warrants have been issued in conjunction with common stock issuances. During the year ended July 31, 2018, the Company sold 2,730,000 Units of its common stock for total cash proceeds of $136,500. During the nine months ended April 30, 2019, the Company sold 1,000,000 Units of its common stock for total cash proceeds of $50,000. Each Unit consists of one common share and one-half share purchase warrant exercisable for 2 years. Each whole share purchase warrant has an exercise price of $0.15 per common share. The warrants were evaluated for purposes of classification between liability and equity. The warrants do not contain features that would require a liability classification and are therefore considered equity. The Black Scholes pricing model was used to estimate the fair value of the Warrants issued with the following inputs: Warrants 500,000 Exercise Price $ 0.15 Term 2 years Volatility 323 % Risk Free Interest Rate 2.61 % Fair Value $ 25,205 Using the fair value calculation, the relative fair value between the common stock and the warrants was calculated to determine the warrants recorded equity amount of $25,205, accounted for in additional paid in capital. Activity for the nine months ended April 30, 2019 and the year ended July 31, 2018 is as follows: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contract Term Outstanding at July 31, 2017 150,000 $ 0.10 1.50 Granted 1,865,000 0.15 1.47 Expired - - - Exercised - - - Exercisable at July 31, 2018 2,015,000 $ 0.15 1.47 Granted 500,000 0.15 1.28 Expired (150,000 ) - - Exercised - - Exercisable at April 30, 2019 2,365,000 0.15 0.90 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Apr. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | On April 16, 2017, the Company executed a promissory note for $15,000 with a shareholder. The note matures in two years and interest is set at $3,000 for the full two years. As of April 30, 2019, there is $13,500 and $1,125 of principal and accrued interest, respectively, due on this loan. For the nine months ended April 30, 2019 and for the year ended July 31, 2018, total payments of $7,500 and $56,500, respectively were made to an officer of the Company for consulting services. As of April 30, 2019, there is $22,500 credited to accounts payable. For the nine months ended April 30, 2019 and for the year ended July 31, 2018, total payments of $45,000 and $26,500, respectively were made to directors of the Company for consulting services. As of April 30, 2019, there is $30,000 credited to accounts payable. On July 31, 2018, Winona Webb, the wife of Ivan Webb, CEO, loaned the Company $25,000 for general operating expenses. This loan was repaid on August 2, 2018 with an additional $5,000 for interest and a loan fee. On August 3, 2018, Mrs. Webb loaned the Company $30,000 which was repaid on August 21, 2018. On September 25, 2018, the Company executed a loan agreement with Mrs. Webb for $6,800. The loan is to be repaid by December 15, 2018, with an additional $680 to cover interest and fees. On October 10, 2018, the Company executed a loan agreement with Mrs. Webb for $15,000. The loan is to be repaid by December 15, 2018, with an additional $1,500 to cover interest and fees. As of April 30, 2019, the Company owes Mrs. Webb $20,930 and $2,180 of principal and interest, respectively. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Apr. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855, from the balance sheet date through the date the financial statement were available to be issued, and has determined that no material subsequent events exist other then the following. On May 7, 2018, the Company created ENMEX LLC, a wholly owned subsidiary in Mexico, for the purposes of managing and operating its investments in Mexico including but not limited to the Joint Venture opportunity being negotiated with Pemer Bacalar on approximately 61 acres on the Bacalar Lagoon on the Yucatan Peninsula. There was no activity from inception to date. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Apr. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying unaudited condensed financial statements reflect all adjustments, consisting of only normal recurring items, which, in the opinion of management, are necessary for a fair statement of the results of operations for the periods shown and are not necessarily indicative of the results to be expected for the full year ending July 31, 2019. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended July 31, 2018. |
Use of Estimates | The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the 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 may differ from those estimates. |
Reclassifications | Certain re-classifications have been made to the prior year financial information to conform to the presentation used in the unaudited financial statements for the nine months ended April 30, 2019. |
Principles of Consolidation | The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Kathis Energy LLC, Kathis Energy Fund 1, LLP and Enmex Operations LLC. All financial information has been prepared in conformity with accounting principles generally accepted in the United States of America. All significant intercompany transactions and balances have been eliminated. |
Revenue Recognition | Revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that an entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company's performance obligations are transferred to customers at a point in time, typically upon delivery. Revenues are earned from the J.E. Richey Lease both in selling oil and gas and from funds received for reworking the Concho Richey #1. We began earning revenues in Q1 of 2015 from the J.E. Richey Lease. Revenues resumed from the sale of oil and gas during the second quarter of the 2016/17 fiscal year. |
Long Lived Assets | Property consists of mineral rights purchases as stipulated by underlying agreements and payments made for oil and gas exploration rights. Our company assesses the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. When we determine that the carrying value of long-lived assets may not be recoverable based upon the existence of one or more indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, we record an impairment charge. Our company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent in the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows. |
Mineral Property Acquisition and Exploration Costs | Mineral property acquisition and exploration costs are expensed as incurred until such time as economic reserves are quantified. Cost of lease, exploration, carrying and retaining unproven mineral lease properties are expensed as incurred. We have chosen to expense all mineral exploration costs as incurred given that it is still in the exploration stage. Once our company has identified proven and probable reserves in its investigation of its properties and upon development of a plan for operating a mine, it would enter the development stage and capitalize future costs until production is established. When a property reaches the production stage, the related capitalized costs will be amortized over the estimated life of the probable-proven reserves. When our company has capitalized mineral properties, these properties will be periodically assessed for impairment of value and any diminution in value. |
Oil and Gas Properties | The Company applies the successful efforts method of accounting for oil and gas properties. The Company capitalizes asset acquisition costs of mineral rights and leases. Unproved oil and gas properties are periodically assessed to determine whether they have been impaired, and any impairment in value is charged to expense. The costs of proved properties will be depleted on an equivalent unit-of-production basis in which total proved reserves will be the base used to calculate depletion. |
Basic and Diluted Earnings Per Share | Net income (loss) per common share is computed pursuant to ASC 260-10-45, Earnings per Share—Overall—Other Presentation Matters As of April 30, 2019, and 2018, the Company had 4,736,271 and 3,575,913 potentially dilutive shares; however, the diluted loss per share is the same as the basic loss per share for the three and nine months ended April 30, 2019 and 2018, as the inclusion of any potential shares would have had an antidilutive effect due to our loss from operations. |
Recently Issued Accounting Pronouncements | The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended |
Apr. 30, 2019 | |
Warrants [Abstract] | |
Schedule of estimate fair value of warrants | Warrants 500,000 Exercise Price $ 0.15 Term 2 years Volatility 323 % Risk Free Interest Rate 2.61 % Fair Value $ 25,205 |
Schedule of warrants activity | Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contract Term Outstanding at July 31, 2017 150,000 $ 0.10 1.50 Granted 1,865,000 0.15 1.47 Expired - - - Exercised - - - Exercisable at July 31, 2018 2,015,000 $ 0.15 1.47 Granted 500,000 0.15 1.28 Expired (150,000 ) - - Exercised - - Exercisable at April 30, 2019 2,365,000 0.15 0.90 |
Organization and Business Ope_2
Organization and Business Operations (Details Narrative) | 9 Months Ended |
Apr. 30, 2019USD ($) | |
J. E. Richey Lease | |
Loss on impairment | $ 46,000 |
Significant Accounting Polici_3
Significant Accounting Policies (Details Narrative) - shares | 9 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Accounting Policies [Abstract] | ||
Potentially dilutive shares | 4,736,271 | 3,575,913 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | Apr. 30, 2019 | Jul. 31, 2018 |
Going Concern [Abstract] | ||
Accumulated deficit | $ (2,889,371) | $ (2,392,496) |
Accrued Liabilities (Details Na
Accrued Liabilities (Details Narrative) | Apr. 30, 2019USD ($) |
Payables and Accruals [Abstract] | |
Firm commitments | $ 349,000 |
Accrued interest | 45,335 |
Accrued distribution and royalty payments | 20,413 |
Amount received in advance | 172,404 |
Investment funds | $ 95,000 |
Convertible Debt (Details Narra
Convertible Debt (Details Narrative) | 9 Months Ended |
Apr. 30, 2019USD ($) | |
Loan 1 | |
Interest rate | 8.00% |
Maturity date | Mar. 26, 2020 |
Principal amount | $ 85,000 |
Accrued interest | $ 41,468 |
Loan 2 | |
Interest rate | 6.00% |
Principal amount | $ 25,000 |
Accrued interest | $ 2,367 |
Common Stock (Details Narrative
Common Stock (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Apr. 30, 2019 | Jan. 31, 2019 | Oct. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Apr. 30, 2019 | Jul. 31, 2018 | |
Equity [Abstract] | ||||||||
Common stock issued for cash, shares | 4,166,667 | 16,559,000 | ||||||
Common stock issued for cash | $ 95,000 | $ 50,000 | $ 50,000 | $ 122,400 | $ 167,999 | $ 125,000 | $ 145,000 | $ 219,475 |
Common stock issued for services, shares | 150,000 | |||||||
Common stock issued for services | $ 9,750 | $ 97,500 |
Warrants (Details)
Warrants (Details) - USD ($) | 9 Months Ended | ||
Apr. 30, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Warrants [Abstract] | |||
Warrants | $ 500,000 | ||
Exercise Price | $ .15 | $ .15 | $ .10 |
Term | 2 years | ||
Volatility | 323.00% | ||
Risk free interest rate | 2.61% | ||
Fair value | $ 22,205 |
Warrants (Details 1)
Warrants (Details 1) - $ / shares | 9 Months Ended | 12 Months Ended |
Apr. 30, 2019 | Jul. 31, 2018 | |
Warrants [Abstract] | ||
Number of warrants, outstanding | 2,015,000 | 150,000 |
Number of warrants, granted | 500,000 | 1,865,000 |
Number of warrants, expired | (150,000) | 0 |
Number of warrants, exercised | 0 | 0 |
Number of warrants, exercisable | 2,365,000 | 2,015,000 |
Weighted average exercise price, outstanding | $ .15 | $ .10 |
Weighted average exercise price, granted | .15 | .15 |
Weighted average exercise price, expired | .00 | .00 |
Weighted average exercise price, exercised | .00 | .00 |
Weighted average exercise price, exercisable | $ .15 | $ .15 |
Weighted average remaining contract term, outstanding | 1 year 6 months | |
Weighted average remaining contract term, granted | 1 year 3 months 11 days | 1 year 5 months 19 days |
Weighted average remaining contract term, exercisable | 10 months 24 days | 1 year 5 months 19 days |
Warrants (Details Narrative)
Warrants (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended |
Apr. 30, 2019 | Jul. 31, 2018 | |
Warrants [Abstract] | ||
Sale of common stock | 1,000,000 | 2,730,000 |
Total cash proceeds | $ 50,000 | $ 136,500 |
Fair value of warrants | $ 22,205 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended |
Apr. 30, 2019 | Jul. 31, 2018 | |
Accounts payable | $ 52,500 | $ 43,374 |
Shareholder | ||
Principal amount | 13,500 | |
Accrued interest | 1,125 | |
Officer | ||
Payments made to related party | 7,500 | 56,500 |
Accounts payable | 22,500 | |
Director | ||
Payments made to related party | 45,000 | $ 26,500 |
Accounts payable | 30,000 | |
Webb | ||
Due to related party | 20,930 | |
Due to related party, interest | $ 2,180 |