Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | ||
Jun. 30, 2013 | Oct. 17, 2013 | Dec. 31, 2012 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | American Energy Development Corp. | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | -19 | ||
Entity Common Stock, Shares Outstanding | 102,331,448 | ||
Entity Public Float | $11,256,000 | ||
Amendment Flag | FALSE | ||
Entity Central Index Key | 1499735 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | 30-Jun-13 | ||
Document Fiscal Year Focus | 2013 | ||
Document Fiscal Period Focus | FY |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Jun. 30, 2013 | Jun. 30, 2012 |
ASSETS | ||
Cash | $9,683 | $84,452 |
Accounts receivable | 13,009 | 9,472 |
Total current assets | 22,692 | 93,924 |
Evaluated, net of accumulated depletion of $28,114 and $9,117, respectively | 405,700 | 1,102,083 |
Unevaluated | 12,909,593 | |
Total assets | 428,392 | 14,105,600 |
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||
Accounts payable and accrued expenses | 249,865 | 211,707 |
Total current liabilities | 249,865 | 211,707 |
Preferred stock, $.001 par value; 5,000,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock, $.001 par value; 3,000,000,000 shares authorized, and 102,331,448 and 101,752,506 shares issued and outstanding, as of June 30, 2013 and June 30, 2012, respectively | 102,331 | 101,752 |
Additional paid-in capital | 15,692,588 | 15,553,719 |
Accumulated other comprehensive loss | -6,117 | -6,117 |
Deficit accumulated during the exploration stage | -15,610,275 | -1,755,461 |
Total stockholders’ equity (deficit) | 178,527 | 13,893,893 |
Total liabilities and stockholders’ equity (deficit) | $428,392 | $14,105,600 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $) | Jun. 30, 2013 | Jun. 30, 2012 |
Evaluated, net of accumulated depletion (in Dollars) | $28,114 | $9,117 |
Preferred stock par value (in Dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized (in Shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in Shares) | 0 | 0 |
Preferred stock, shares outstanding (in Shares) | 0 | 0 |
Common stock, par value (in Dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized (in Shares) | 3,000,000,000 | 3,000,000,000 |
Common stock, shares issued (in Shares) | 102,331,448 | 101,752,506 |
Common stock, shares outstanding (in Shares) | 102,331,448 | 101,752,506 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (USD $) | 12 Months Ended | 40 Months Ended | |
Jun. 30, 2013 | Jun. 30, 2012 | Jun. 30, 2013 | |
Revenues | $204,453 | $89,011 | $293,464 |
Operating costs | 30,223 | 8,303 | 38,526 |
Net revenue | 174,230 | 80,708 | 254,938 |
Operating expenses | |||
General and administrative | 454,497 | 552,103 | 1,139,371 |
Loss on sale of oil and gas property | 291,723 | 0 | 291,723 |
Impairment of oil and gas property | 13,282,824 | 1,143,681 | 14,426,505 |
Total operating expenses | 14,029,044 | 1,695,784 | 15,857,599 |
Loss from operations | -13,854,814 | -1,615,076 | -15,602,661 |
Interest expense | 0 | -3,858 | -7,614 |
Loss before income taxes | -13,854,814 | -1,618,934 | -15,610,275 |
Provision for income taxes | 0 | 0 | 0 |
Net loss | ($13,854,814) | ($1,618,934) | ($15,610,275) |
Net loss per common share – basic and diluted (in Dollars per share) | ($0.13) | ($0.01) | |
Weighted average of common shares – basic and diluted (in Shares) | 102,128,700 | 113,172,797 |
CONSOLIDATED_STATEMENT_OF_CHAN
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT (UNAUDITED) (USD $) | 4 Months Ended | 12 Months Ended | 16 Months Ended | 40 Months Ended | ||
Jun. 30, 2010 | Jun. 30, 2013 | Jun. 30, 2012 | Jun. 30, 2011 | Jun. 30, 2013 | Jun. 30, 2013 | |
Balance | ($6,883) | $178,527 | $13,893,893 | $1,186,830 | $178,527 | $178,527 |
Issuances of common stock for cash | 30,000 | 1,620,000 | 230,557 | |||
Additional paid-in capital in exchange for facilities provided by related party | 3,600 | 3,600 | 3,600 | 12,000 | ||
Forgiveness of debt by former stockholders | 7,614 | |||||
Issuance of common stock for oil and gas properties | 4,223 | 12,700,000 | 1,085,000 | |||
Foreign currency loss | -6,117 | |||||
Issuance of common stock for services | 3,000 | 101,625 | 900 | 105,525 | ||
Additional paid-in capital in exchange for facilities provided by related party | 1,200 | |||||
Net loss | -11,083 | -13,854,814 | -1,618,934 | -125,444 | -15,610,275 | |
Common Stock [Member] | ||||||
Balance | 90,000 | 102,331 | 101,752 | 171,167 | 102,331 | 102,331 |
Balance (in Shares) | 90,000,000 | 102,331,448 | 101,752,506 | 171,167,100 | 102,331,448 | 102,331,448 |
Issuances of common stock for cash | 75 | 2,669 | 69,167 | |||
Issuances of common stock for cash (in Shares) | 75,000 | 2,669,215 | 69,167,100 | |||
Surrender of common stock by the stockholder | -85,150 | |||||
Surrender of common stock by the stockholder (in Shares) | -85,150,000 | |||||
Issuance of common stock for oil and gas properties | 35 | 12,976 | 12,000 | |||
Issuance of common stock for oil and gas properties (in Shares) | 35,192 | 12,976,191 | 12,000,000 | |||
Issuance of common stock for services | 90,000 | 469 | 90 | |||
Issuance of common stock for services (in Shares) | 90,000,000 | 468,750 | 90,000 | |||
Additional Paid-in Capital [Member] | ||||||
Balance | -85,800 | 15,692,588 | 15,553,719 | 1,152,190 | 15,692,588 | 15,692,588 |
Issuances of common stock for cash | 29,925 | 1,617,331 | 161,390 | |||
Additional paid-in capital in exchange for facilities provided by related party | 3,600 | 3,600 | 3,600 | |||
Surrender of common stock by the stockholder | 85,150 | |||||
Forgiveness of debt by former stockholders | 7,614 | |||||
Issuance of common stock for oil and gas properties | 4,188 | 12,687,024 | 1,073,000 | |||
Issuance of common stock for services | -87,000 | 101,156 | 810 | |||
Additional paid-in capital in exchange for facilities provided by related party | 1,200 | |||||
Accumulated Other Comprehensive Income (Loss) [Member] | ||||||
Balance | -6,117 | -6,117 | -6,117 | -6,117 | ||
Foreign currency loss | -6,117 | |||||
Accumulated Deficit during Development Stage [Member] | ||||||
Balance | -11,083 | -15,610,275 | -1,755,461 | -136,527 | -15,610,275 | -15,610,275 |
Net loss | ($11,083) | ($13,854,814) | ($1,618,934) | ($125,444) |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $) | 12 Months Ended | 16 Months Ended | 40 Months Ended | |
Jun. 30, 2013 | Jun. 30, 2012 | Jun. 30, 2013 | Jun. 30, 2013 | |
Cash flows from operating activities | ||||
Net loss | ($13,854,814) | ($1,618,934) | ($15,610,275) | |
Additional paid-in capital in exchange for facilities provided by related party | 3,600 | 3,600 | 12,000 | |
Common stock issued for services | 101,625 | 900 | 105,525 | |
Depletion expense | 18,997 | 9,117 | 28,114 | |
Loss on sale of oil and gas property | -291,723 | 0 | 291,723 | -291,723 |
Impairment of oil and gas properties | 13,282,824 | 1,143,681 | 14,426,505 | 14,426,505 |
Decrease (Increase) in accounts receivable | -3,537 | -9,472 | -13,009 | |
Increase (decrease) in accounts payable and accrued expenses | 54,813 | -68,250 | 319,134 | |
Net cash used in operating activities | -104,769 | -539,358 | -440,283 | |
Cash flows from investing activities | ||||
Purchase and capitalized costs of oil and gas properties | -1,168,596 | -1,424,474 | ||
Net cash used by investing activities | -1,168,596 | -1,424,474 | ||
Cash flows from financing activities | ||||
Proceeds from issuance of common stock | 30,000 | 1,620,000 | 1,880,557 | |
Proceeds from issuance of stockholder loan | 0 | -30,000 | 0 | |
Net cash provided by financing activities | 30,000 | 1,590,000 | 1,880,557 | |
Effect of exchange rates on cash and cash equivalents | 0 | -6,117 | -6,117 | |
Net increase (decrease) in cash | -74,769 | -124,071 | 9,683 | |
Cash, beginning of period | 84,452 | 208,523 | 0 | |
Cash, end of period | 9,683 | 84,452 | 9,683 | 9,683 |
Supplemental disclosure of cash flow information | ||||
Income taxes paid | 0 | 0 | 0 | |
Interest paid | 0 | 0 | 0 | |
Non-cash transactions | ||||
Forgiveness of debt from former shareholder | 0 | 7,614 | 7,614 | |
Common stock for services | 105,225 | 4,500 | 117,525 | |
Common stock for oil and gas properties | $4,223 | $12,700,000 | $12,704,223 |
NATURE_OF_OPERATIONS_AND_SUMMA
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jun. 30, 2013 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Nature of Operations and Basis of Presentation | |
Nature of Operations | |
American Energy Development Corp. (the "Company") is currently an exploration stage company under the provisions of Accounting Standards Codification (ASC) No. 915, Development Stage Entities, and was incorporated under the laws of the State of Nevada on March 10, 2010. Since inception, the Company has produced almost no revenues and will continue to report as an exploration stage company until significant revenues are produced. | |
The Company’s principal activity is the exploration and development of oil and gas properties. | |
On July 12, 2011, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Nevada Secretary of State to change its name from “LJM Energy Corp.” to “American Energy Development Corp.” (the “Name Change”). The effective date of the Name Change with the Nevada Secretary of State is July 14, 2011. | |
Exploration Stage | |
The Company is engaged in the acquisition, exploration and development of producing oil and gas properties. As of June 30, 2013, the Company owns acreage in the State of Michigan which includes a 43.75% working interest in three separate oil and gas leases in Ingham County, Michigan (the “Dansville Prospect”) totaling approximately 1,343 acres along with option rights to acquire a 50% working interest in three (3) prospects located in Trenton Township, Washtenaw County, Trenton Township, Jackson County, and Kinneville Township, Ingham County, Michigan (the “Option Prospects”), and seismic data for certain properties located in Ingham and Calhoun Counties, Michigan for further exploration and analysis. The Company also owns a 1.4% working interest in certain oil and gas leases in Pottawatomie County, Oklahoma (the “Magnolia Prospect”). | |
Additionally, the Company owns all of the issued and outstanding shares of Reservoir Resources Limited, which through its wholly-owned subsidiary, Fairfax Shelfco 307 Limited (“Fairfax 307”), is the owner of a ninety-five percent (95%) share in the Petroleum Exploration and Development Licence for UK Onshore Block SU97, known as licence PEDL236 (the “Licence”), which grants to Fairfax 307 an exclusive license during the term of the Licence to search, bore for and obtain petroleum in UK Onshore Block SU97, a 24,700 acre onshore exploration prospect located in the Weald Basin in Windsor, United Kingdom. Reservoir Resources also owns two-dimensional seismic data and information relating to certain areas of the Licence. | |
In December 2012, the Company determined that the costs to obtain required approvals necessary to develop and drill the Windsor Prospect of Reservoir Resources were too significant and the likelihood of obtaining the approvals too remote to pursue the prospect further. As a result, the Company has impaired its investment of Reservoir Resources. | |
The Company’s success will depend in large part on its ability to obtain and develop its oil and gas interests. There can be no assurance that oil and gas properties obtained by the Company will contain reserves or that properties with reserves will be profitable to extract. The Company will be subject to local and national laws and regulations which could impact the Company’s ability to execute its business plan. | |
As discussed in Note 2, the accompanying financial statements have been prepared assuming the Company will continue as a going concern. | |
Use of Estimates | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 reported periods. Actual results could materially differ from those estimates. | |
Cash and Cash Equivalents | |
For purposes of the balance sheet and statement of cash flows, the Company considers all highly liquid debt instruments purchased with maturity of three months or less to be cash equivalents. | |
Fair Value of Financial Instruments | |
The Company is required to estimate the fair value of all financial instruments included on its balance sheet under ASC 825, Financial Instruments. The carrying value of cash, accounts payable and accrued expenses approximate their fair value due to the short period to maturity of these instruments. | |
Oil and Gas Properties | |
The Company follows the full cost method of accounting for crude oil and natural gas properties. Under this method, all direct costs and certain indirect costs associated with acquisition of properties and successful as well as unsuccessful exploration and development activities are capitalized. Depreciation, depletion, and amortization of capitalized crude oil and natural gas properties and estimated future development costs, excluding unproved properties, are based on the unit-of-production method based on proved reserves. | |
The cost of investments in unproved properties and major development projects are excluded from capitalized costs to be amortized until it is determined whether or not proved reserves can be assigned to the properties. Until such a determination is made, the properties are assessed annually to ascertain whether impairment has occurred. The costs of drilling exploratory dry holes are included in the amortization base immediately upon determination that the well is dry. | |
For each cost center, capitalized costs are subject to an annual ceiling test, in which the costs shall not exceed the cost center ceiling. The cost center ceiling is equal to i) the present value of estimated future net revenues computed by applying current prices of oil and gas reserves (with consideration of price changes only to the extent provided by contractual arrangements) to estimated future production of proved oil and gas reserves as of the date of the latest balance sheet presented, less estimated future expenditures (based on current costs) to be incurred in developing and producing the proved reserves computed using a discount factor of ten percent and assuming continuation of existing economic conditions; plus ii) the cost of properties not being amortized; plus iii) the lower of cost or estimated fair value of unproven properties included in the costs being amortized; less iv) income tax effects related to differences between the book and tax basis of the properties. If unamortized costs capitalized within a cost center, less related deferred income taxes, exceed the cost center ceiling, the excess is charged to expense and separately disclosed during the period in which the excess occurs. | |
Asset Retirement Obligation | |
The Company accounts for its future asset retirement obligations by recording the fair value of the liability, if any, during the period in which it was incurred. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. The increase in carrying value of a property associated with the capitalization of an asset retirement cost is included in proved oil and gas properties within the Company’s balance sheets. The Company depletes the amount added to proved oil and gas property costs using the units-of-production method and the straight-line basis over the life of the assets. | |
The Company’s asset retirement obligation consists of costs related to the plugging of wells, removal of facilities and equipment and site restoration on its oil and gas properties and gathering assets. The asset retirement liability, if any, will be allocated to operating expense using a systematic and rational method. As of June 302013 and 2012, the Company reviewed plug and abandonment costs of its producing Brown 2-12 well and deemed the amount to be immaterial. | |
Revenue Recognition | |
Working interest, royalty and net profit interests are to be recognized as revenue when oil and gas are sold. The Company records the sale of its interests in prospects generally as a reduction to the cost pool without gain or loss recognition unless such a sale would significantly alter the relationship between capitalized costs and the proved reserves attributable to a cost center. A significant alteration would typically involve a sale of 25% or more of the proved reserves related to a single full cost pool. All terms of the sale are to be finalized and price readily determinable. | |
Value of Stock Issued for Services | |
The Company periodically issues shares of its common stock in exchange for, or in settlement of, services. The Company’s management values the shares issued in such transactions at either the then market price of the Company’s common stock after taking into consideration factors such as volume of shares issued or trading restrictions, or the value of the services rendered, whichever is more readily determinable. | |
Reclassifications | |
Certain amounts in the 2012 financial statements have been reclassified for comparative purposes to conform to the current year presentation. | |
Concentrations of Credit Risk | |
The Company collects its receivables on its working interests in oil and gas properties from the well operators. As such, the Company generally has relatively few customers. These receivables are unsecured and the Company performs ongoing credit evaluations of the well operators’ financial condition whenever necessary. At June 30, 2013 and 2012, the Company had one customer that accounted for 100% of its oil and gas sales. Bad debt expense is recognized on an account-by-account review after all means of collection have been exhausted and recovery is not probable. | |
There was no bad debt expense for the years ended June 30, 2013 and 2012. | |
Recent Accounting Pronouncements | |
There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's consolidated financial position, results of operations or cash flows. | |
GOING_CONCERN
GOING CONCERN | 12 Months Ended |
Jun. 30, 2013 | |
Going Concern [Abstract] | |
Going Concern [Text Block] | 2. GOING CONCERN |
As shown in the accompanying financial statements, the Company has incurred a net operating loss of ($15,260,275) from inception (March 10, 2010) through June 30, 2013. The Company is subject to those risks associated with exploration stage companies. The Company’s present revenues are insufficient to meet operating expenses. Additional debt and equity financing will be required by the Company to fund its development activities and to support operations. However, there is no assurance that the Company will be able to obtain additional financing. Furthermore, the Company's existence is dependent upon management's ability to develop profitable operations. These factors, among others, raise substantial doubt that the Company will be able to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties. | |
Management is currently devoting substantially all of its efforts to develop its existing oil and gas properties. The Company also continues to search for additional productive properties. There can be no assurance that the Company's efforts will be successful, or that those efforts will translate in a beneficial manner to the Company. The accompanying statements do not include any adjustments that might result should the Company be unable to continue as a going concern. | |
DIRECTOR_AGREEMENT
DIRECTOR AGREEMENT | 12 Months Ended |
Jun. 30, 2013 | |
Director [Abstract] | |
Director [Text Block] | 3. DIRECTOR AGREEMENT |
On December 19, 2011, the board of directors of the Company increased the size of the board of directors from two to three directors and appointed Kevin J. Goldrick as a director. On this date, the Company and Mr. Goldrick entered into a director agreement (“Director Agreement”). The Director Agreement provides that Mr. Goldrick will receive an annual cash compensation of $12,000 and equity compensation of 100,000 shares of common stock with the possibility to purchase stock options subject to certain conditions as specified in the Director Agreement. On December 6, 2012, Kevin Goldrick resigned as a director of the Company. | |
INVESTMENTS_IN_OIL_AND_GAS_PRO
INVESTMENTS IN OIL AND GAS PROPERTIES | 12 Months Ended | |||||
Jun. 30, 2013 | ||||||
Investments Schedule [Abstract] | ||||||
Investment [Text Block] | 4. INVESTMENTS IN OIL AND GAS PROPERTIES | |||||
Dansville Prospect – Proved (Evaluated) Property | ||||||
On June 14, 2011, the Company entered into and closed an omnibus agreement (“Omnibus Agreement”) with Range Michigan LLC, a Wyoming limited liability company (“Range”), pursuant to which the Company acquired interests in certain oil and gas drilling areas and land leases located in Ingham County, Michigan and seismic data relating to such areas and leases for the total purchase price of 12,000,000 shares of the Company’s common stock for the cost to date of the development and seismic data which was $ 1,085,000. During the year, the company incurred additional costs of approximately $1,152,000. The Omnibus Agreement required the Company to effect a 30-to-1 forward stock split of all shares of Common Stock within 30 days of the effective date of the Omnibus Agreement (“Forward Split”). The forward stock split occurred on July 14, 2011. | ||||||
On September 19, 2011, the Company entered into a First Amendment to Omnibus Agreement (“Omnibus Amendment”) with Range Michigan LLC, a Wyoming limited liability company (“Range”), pursuant to which the Omnibus Agreement dated June 14, 2011 between the parties was amended to reflect the Company’s name change to American Energy Development Corp. and extend the participation date for the wells from December 31, 2011 to July 1, 2012. | ||||||
In connection with the Omnibus Amendment, the Company entered into a First Amendment to Participation Agreement (“Participation Amendment”) with Range, pursuant to which the Participation Agreement dated June 14, 2011 between the parties was amended to, among other things, (i) reflect the Company’s name change to American Energy Development Corp., (ii) extend the date in which the Company is required to participate in the Required Wells from December 31, 2011 to July 1, 2012, (iii) provide that it is anticipated that each of the two remaining two of the Required Wells will be spudded by July 1, 2012, and (iv) authorize Range to withhold the first $100,000 from the Company’s share of the proceeds from the production of the first Required Well( the Brown #2 -12 well) for the payment of the option fee specified Option Agreement and Option Amendment as described below. | ||||||
In connection with the Omnibus Amendment, the Company entered into a First Amendment to Option Agreement (“Option Amendment”) with Range, which provides that in the event the Brown #2-12 Well is a producing well, Range will withhold the first $100,000 of the Company’s share of production proceeds for payment of the option fee and if the Company’s share of the proceeds from the Brown #2-12 Well are insufficient to pay the entire amount of the option fee on or before February 1, 2012then the Company shall pay Range the remaining balance of the option fee on or before February 5, 2012. As of September 30, 2012, the Brown #2-12 well production has been insufficient to pay the Option Fee. The Company has renegotiated with Range to waive the option fee. | ||||||
The Company will remit to the seller an overriding royalty interest of 2.5% of the overall gross market value at the time of production of all oil and gas produced from the licensed areas from proceeds of the sale of oil and gas produced. The property currently has one well that is producing in which they hold a net realizable interest of 26%. | ||||||
During the year ended June 30, 2013 and 2012, the Company recorded impairment charges on Dansville prospect of approximately $720,000 and $1,145,000 based on the independent assessment of the future value of its proved reserves. | ||||||
Reservoir Resources | ||||||
On September 13, 2011, the Company entered into a Purchase Agreement with Pepper Canister Nominees Limited pursuant to which the Company will acquire all of the issued and outstanding shares of the Seller’s wholly-owned subsidiary, Reservoir Resources Limited, which, through its wholly-owned subsidiary, owns an oil and gas exploration and development license in the United Kingdom in exchange for 12,500,000 shares of the Company’s common stock valued at $12,500,000 ($1.00 per share) . The Company is subject to development requirements whereby the Company must drill at least one well in the licensed area to a depth of 400 meters to be spudded by December 31, 2012 (“Target Date”), failure of which will result in the Seller being granted the option to cancel the Purchase Agreement within 60 days of the Target Date, re-acquire all shares of Reservoir Resources and retain 50% of the Company’s shares received as the Purchase Price. The purchase of Reservoir Resources was completed on March 12, 2012. The Company is currently undergoing various reserve studies to assess potential production and to continue the development of the wells purchased. | ||||||
The allocation of the purchase price of the assets acquired and liabilities assumed based on their fair values was as follows: | ||||||
Cash | $ | 250 | ||||
Oil and gas property - License | 42,400 | |||||
Oil and gas property - Unproved | 12,470,135 | |||||
Total assets acquired | 12,512,785 | |||||
Liabilities Assumed | (12,785 | ) | ||||
Total | $ | 12,500,000 | ||||
In December 2012, the Company determined that the costs to obtain required approvals necessary to develop and drill the Windsor Prospect of Reservoir Resources were too significant and the likelihood of obtaining the approvals too remote to pursue the prospect further. As a result, the Company has impaired its investment of Reservoir Resources in the amount of $12,512,535. | ||||||
White Tail Prospect | ||||||
On March 6, 2012, the Company entered into a letter of intent to acquire a forty three and seventy five hundredths percent (43.75%) working interest and a thirty five percent (35%) net revenue interest in the White-tail Prospect from Range Michigan LLC, a Wyoming limited liability company, which covers approximately 4,000 acres. | ||||||
In consideration of the purchase of the interests in the White-tail Prospect, the Company agreed to pay Range a total purchase price of $487,500. The Company paid Range $87,500 to reimburse Range for development costs incurred to date and on June 15, 2012, the Company issued 476,191 common shares for $200,000, or $0.42/share. The Company further agreed to pay one hundred percent (100%) of the Authority For Expenditure (“AFE”) for a 3-D high resolution seismic survey of the White-tail Prospect. The Company has incurred approximately $226,000 of the AFE. On February 5, 2013, the Company entered into an Assignment of Oil and Gas Leases, Termination of Lease Acquisition Agreement and Operating Agreement and Disclaimer (the "Termination Agreement") with Range Michigan LLC ("Range") pursuant to which the Company and Range agreed that (i) the Company assign to Range all of its 43.75% working interest in Range's right to oil and gas leases covering the White-tail Prospect in Northern Michigan (the "Prospect"), effective January 22, 2013, for the nominal consideration of $10 and (ii) both the Company and Range terminate the Lease Acquisition Agreement dated June 15, 2012 by and between the Company and Range (the "Purchase Agreement") and the Joint Operating Agreement dated March 31, 2012 by and between the Company and Range (the "Operating Agreement"), effective January 23, 2013, due to the Company's non-payment of seismic program costs as required pursuant to the Purchase Agreement. There were no material early termination penalties incurred by the Company in connection with the Termination Agreement. As a result, the Company recorded a loss on the Termination Agreement of $291,723 for the year ended June 30, 2013. | ||||||
Osprey Prospect | ||||||
On April 17, 2012, the Company entered into a letter of intent to acquire 43.75% working interest and a 35% net revenue interest in the Osprey Prospect from Range Michigan LLC, a Wyoming limited liability company. | ||||||
In consideration of the purchase of the interests in the Osprey Prospect, the Company will pay Range a total purchase price of $80,000. The Company paid Range $50,000 to reimburse Range for development costs incurred to date and any prior land lease payments. In October 2012, Range agreed to accept our reimbursement costs of $40,000 as partial payment on the prospect. As of June 30, 2013, the Company has not closed the acquisition of the Osprey Prospect and does not intend to pursue this transaction. Accordingly, the Company has impaired its investment in the Osprey Prospect as of June 30, 2013 of approximately $50,000. | ||||||
ADVISOR_AGREEMENT
ADVISOR AGREEMENT | 12 Months Ended |
Jun. 30, 2013 | |
Advisory Agreement [Abstract] | |
Advisory Agreement [Text Block] | 5. ADVISOR AGREEMENT |
On September 20, 2011, the Company entered into an Advisory Board Member Agreement (“Advisor Agreement”) with Desmond Oswald, pursuant to which the Company appointed Mr. Oswald to serve as an advisor to the Company continuing indefinitely, until terminated at any time by Mr. Oswald or the Company. The Advisor Agreement provides that Mr. Oswald will be available at a minimum of one time per quarter a year for advisory board meetings to (i) facilitate introductions to potential partners, suppliers, customers and investors, (ii) provide opinions to assist the Company in identify and recruiting potential technical, strategic and other partners or individuals, and (iii) apprise the Company of technological, competitive and other changes and developments that he may from time to time become aware of. The Advisor Agreement also provides that Mr. Oswald is paid $900 for the preparation and attendance of each advisory board meeting and Mr. Oswald was issued 90,000 shares of the Company’s common stock as compensation subject to certain vesting requirements as specified in the Advisor Agreement. | |
LOANS_FROM_STOCKHOLDER
LOANS FROM STOCKHOLDER | 12 Months Ended |
Jun. 30, 2013 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | 6. LOANS FROM STOCKHOLDER |
On March 31, 2010, the Company issued a promissory note to a stockholder and officer of the Company in exchange for a loan of $30,000 with interest that accrued at the rate of 10% per annum. On March 22, 2012, the Company repaid the loan and the stockholder and officer of the Company forgave the accrued interest due to him on this promissory note and contributed the same amount to capital. | |
On December 2, 2011, the Company issued a promissory note to a stockholder and officer of the Company in the amount of $109,962. The promissory note, which was due on June 2, 2012, including interest at the annual rate of 5% was repaid on March 22, 2012. On this date, the stockholder and officer of the Company forgave the accrued interest due to him on this promissory note and contributed the same amount to capital. | |
On December 23, 2011, a stockholder and officer of the Company provided an advance to fund operations. The advance was unsecured, non-interest bearing and due on demand. On March 22, 2012 the Company repaid the amount due of $13,488. | |
COMMON_STOCK
COMMON STOCK | 12 Months Ended |
Jun. 30, 2013 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | 7. COMMON STOCK |
On June 14, 2011, the Company issued 12,000,000 shares of its common stock in connection with the Omnibus Agreement as discussed in Note 4. | |
During the year ended June 30, 2011, the Company issued 69,167,100 shares of common stock to unrelated investors at $0.003 per share for a total of $230,557. | |
On July 12, 2011, the Company filed a Certificate of Change pursuant to Section 78.209 of the Nevada Revised Statutes (the “Certificate of Change”) with the Nevada Secretary of State to effect a thirty for one forward stock split of the Company’s common stock (the “Forward Stock Split”). The Certificate of Change increased the number of authorized shares of the Company’s common stock from 100,000,000 to 3,000,000,000 and the number of issued and outstanding shares of common stock for shareholders of record as of July 13, 2011, from 5,705,570 shares to 171,167,100 shares. The Company’s common stock continues to be $.001 par value. Fractional shares were rounded upward. The effective date of the Forward Stock Split with the Nevada Secretary of State was July 14, 2011. These financial statements reflect the Forward Stock Split | |
On September 20, 2011, the Company issued 90,000 shares of its common stock pursuant to the Advisory Agreement discussed in Note 5. | |
On October 3, 2011, the Company entered into a Securities Purchase Agreement (the “Financing Agreement”) with an investor (the “Investor”) pursuant to which the Company, at its sole and exclusive option, may issue and sell to the Investor, and the Investor shall purchase up to $7,800,000 of the Company’s $0.001 par value common stock and five-year warrants to purchase common stock (the “Warrants”) from time to time over a two year period at a purchase price (the “Purchase Price”) of the higher of (i) $0.40 per share, and (ii) eighty percent (80%) of the 10-day volume weighted average price (VWAP) of the Company’s common stock. The Company shall have sole discretion to issue and sell the common stock and Warrants pursuant to the Financing Agreement and the Investor shall have no right to acquire the common stock and Warrants from the Company until a drawdown notice is received from the Company. The Investor shall have sole discretion in determining whether the proposed use of proceeds as provided by the Company in the drawdown notice is acceptable to the Investor. | |
The Company received an initial drawdown of $200,000 (“First Drawdown”) on October 3, 2011. In exchange for the First Drawdown, the Company issued 500,000 shares of common stock at a purchase price of $0.40 per share and Warrants to purchase 500,000 shares of common stock at an exercise price of 120% of the purchase price, or $0.48 per share. The Warrants expire five years from the date of the investment. | |
On October 12, 2011, the Company received an additional $200,000 drawdown (“Second Drawdown”). In exchange for the Second Drawdown, the Company issued 500,000 shares of common stock at a purchase price of $0.40 per share and Warrants to purchase 500,000 shares of common stock at an exercise price of 120% of the purchase price, or $0.48 per share, pursuant to the Financing Agreement. The Warrants expire five years from the date of the investment. | |
In connection with the Financing Agreement, on October 3, 2011, the Company also entered into a Stock Cancellation Agreement (the “Cancellation Agreement”) with Joel Felix, pursuant to which the Company and Mr. Felix agreed to cancel 85,000,000 shares of common stock held by Mr. Felix as consideration for the Investor’s willingness to enter into and as a condition of the Financing Agreement. | |
On October 17, 2011, the Company canceled and retired 150,000 shares of Common Stock from an unrelated third party. | |
On November 23, 2011, the Company issued 100,000 shares of its common stock to unrelated investors at $0.50 per share for a total of $50,000. | |
On February 3, 2012, the Company received an additional $50,000 drawdown (“Third Drawdown”). In exchange for the Third Drawdown, the Company issued 125,000 shares of common stock at a purchase price of $0.40 per share and Warrants to purchase 125,000 shares of common stock at an exercise price of 120% of the purchase price, or $0.48 per share, pursuant to the Financing Agreement. The Warrants expire five years from the date of the investment. | |
On March 12, 2012, the Company issued 12,500,000 shares of its common stock pursuant to a Purchase Agreement with Pepper Canister Nominees Limited to acquire all of the issued and outstanding shares of Reservoir Resources Limited, which through its wholly-owned subsidiary, owns an oil and gas exploration and development license in the United Kingdom. See Note 4. | |
On March 20, 2012, the Company received an additional $1,000,000 drawdown (“Fourth Drawdown”). In exchange for the Fourth Drawdown, the Company issued 1,282,052 shares of common stock at a purchase price of $0.78 per share and Warrants to purchase 1,282,052 shares of common stock at an exercise price of 120% of the purchase price, or $0.94 per share, pursuant to the Financing Agreement. The Warrants expire five years from the date of the investment. | |
On March 22, 2012, a stockholder and officer of the Company forgave $7,614 of accrued interest due to him in relation to his advances to the Company and contributed the same amount to capital. | |
On March 30, 2012, the Company received an additional $120,000 drawdown (“Fifth Drawdown”). In exchange for the Fifth Drawdown, the Company issued 162,163 shares of common stock at a purchase price of $0.74 per share and Warrants to purchase 162,163 shares of common stock at an exercise price of 120% of the purchase price, or $0.89 per share, pursuant to the Financing Agreement. The Warrants expire five years from the date of the investment. | |
On June 15, 2012, the Company issued 476,191 common shares valued at $200,000 as partial consideration for the White-tail Prospect. See Note 4. | |
On September 19, 2012, the Company issued 75,000 common shares valued at $25,000 to a consultant for services performed. | |
On September 19, 2012, the Company issued 93,750 common shares valued at $28,125 to a board member as consideration for his services. | |
On October 31, 2012, the Company received an additional $30,000 drawdown (“Sixth Drawdown”). In exchange for the Sixth Drawdown, the Company issued 75,000 shares of common stock at a purchase price of $0.40 per share and Warrants to purchase 75,000 shares of common stock at an exercise price of 120% of the purchase price, or $0.48 per share, pursuant to the Financing Agreement. The Warrants expire five years from the date of the investment. | |
On November 29, 2012, the Company issued 300,000 common shares valued at $51,000 to a consultant for services performed. | |
On December 20, 2012, the Company issued 35,192 common shares valued at $4,223 pursuant to an agreement whereby the third party would be issued additional shares if the company issued additional shares for less than $0.30 per share. | |
WARRANTS
WARRANTS | 12 Months Ended | ||||||||
Jun. 30, 2013 | |||||||||
Warrants [Abstract] | |||||||||
Warrants [Text Block] | 8. WARRANTS | ||||||||
Warrant Activity | |||||||||
As described in Note 7, the Company issued a convertible note with detachable warrants. A summary of warrant activity for the period from June 30, 2011 through June 30, 2013 is presented below: | |||||||||
Weighted | Weighted | ||||||||
Average | Average | ||||||||
Number of | Exercise | Remaining | |||||||
Warrants | Price | Contract Term | |||||||
Outstanding June 30, 2011 | - | $ | - | - | |||||
Issued | 2,569,215 | $ | 1.46 | 3.54 years | |||||
Exercised | - | - | - | ||||||
Outstanding June 30, 2012 | 2,569,215 | $ | 1.46 | 3.54 years | |||||
Issued | 75,000 | $ | 0.66 | 4.34 years | |||||
Exercisable, June 30, 2013 | 2,644,215 | $ | 1.44 | 3.56 years | |||||
Shares Reserved for Future Issuance | |||||||||
The Company has reserved shares for future issuance upon conversion of warrants as follows: | |||||||||
Warrants | 2,644,215 | ||||||||
Reserved shares at June 30, 2013 | 2,644,215 | ||||||||
PROVISION_FOR_INCOME_TAXES
PROVISION FOR INCOME TAXES | 12 Months Ended | |||||
Jun. 30, 2013 | ||||||
Income Tax Disclosure [Abstract] | ||||||
Income Tax Disclosure [Text Block] | 9. PROVISION FOR INCOME TAXES | |||||
Deferred income taxes are reported using the liability method. Deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. | ||||||
As of June 30, 2013, the Company had federal net operating loss carryforwards of ($2,050,000), which can be used to offset future federal income tax. The federal and state net operating loss carryforwards expire at various dates through 2033. Deferred tax assets resulting from the net operating losses are reduced by a valuation allowance, when, in the opinion of management, utilization is not reasonably assured. | ||||||
A summary of the Company’s deferred tax assets as of June 30, 2013 are as follows: | ||||||
30-Jun-13 | ||||||
Federal net operating loss (@ 34%) | $ | 696,571 | ||||
Less: valuation allowance | (696,571 | ) | ||||
Net deferred tax asset | $ | - | ||||
During the year ended June 30, 2013, the Company’s valuation allowance increased by approximately $99,714. | ||||||
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Jun. 30, 2013 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | 10. RELATED PARTY TRANSACTIONS |
From the Company’s inception (March 10, 2010) through June 30, 2013, the Company utilized office space of an officer and stockholder at no charge. The Company treated the usage of the office space as additional paid-in capital and charged the estimated fair value rent of $300 per month to operations. For the year ended June 30, 2013 and 2012 rent expense was $3,600 and $3,600, respectively. | |
In connection with the Financing Agreement, on October 3, 2011, the Company also entered into the Cancellation Agreement with Joel Felix, pursuant to which the Company and Mr. Felix agreed to cancel 85,000,000 shares of common stock held by Mr. Felix as consideration for the Investor’s willingness to enter into and as a condition of the Financing Agreement. | |
On March 31, 2010, the Company issued a promissory note to a stockholder and officer of the Company in exchange for a loan of $30,000 with interest that accrued at the rate of 10% per annum. On March 22, 2012, the Company repaid the loan and the stockholder and officer of the Company forgave the accrued interest due to him on this promissory note and contributed the same amount to capital. | |
On December 2, 2011, the Company issued a promissory note to a stockholder and officer of the Company in the amount of $109,962. The promissory note, which was due on June 2, 2012, including interest at the annual rate of 5% was repaid on March 22, 2012. On this date, the stockholder and officer of the Company forgave the accrued interest due to him on this promissory note and contributed the same amount to capital. | |
On December 23, 2011, a stockholder and officer of the Company provided an advance to fund operations. The advance was unsecured, non-interest bearing and due on demand. On March 22, 2012 the Company repaid the amount due of $13,488. | |
SUPPLEMENTAL_OIL_AND_GAS_RESER
SUPPLEMENTAL OIL AND GAS RESERVE INFORMATION (Unaudited) | 12 Months Ended | ||||||||||
Jun. 30, 2013 | |||||||||||
Proved Oil and Gas Reserve Quantities Disclosure [Text Block] (Deprecated 2012-01-31) [Abstract] | |||||||||||
Proved Oil and Gas Reserve Quantities Disclosure [Text Block] (Deprecated 2012-01-31) | 11. SUPPLEMENTAL OIL AND GAS RESERVE INFORMATION (Unaudited) | ||||||||||
Company Reserve Estimates. The Company's proved reserve information as of June 30, 2013 was estimated by NSAI, independent petroleum engineers. In accordance with SEC guidelines, NSAI’s estimates of future net revenues from our properties, and the PV-10 and standardized measure thereof, were determined to be economically producible under existing economic conditions, which requires the use of the 12-month average price for each product, calculated as the unweighted arithmetic average of the first-day-of-the-month price for the period July 1, 2012 through June 30, 2013, except where such guidelines permit alternate treatment, including the use of fixed and determinable contractual price escalations. | |||||||||||
The technical persons at NSAI are responsible for preparing the reserves estimates presented herein and meets the requirements regarding qualifications, independence, objectivity, and confidentiality set forth in the Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information promulgated by the Society of Petroleum Engineers. Joel Felix, our officer and director, acted as the liaison with the technical persons at NSAI. | |||||||||||
Reserve Technologies. Proved oil and gas reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations, prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time. If deterministic methods are used, reasonable certainty means a high degree of confidence that the quantities will be recovered. If probabilistic methods are used, there should be at least a 90% probability that the quantities actually recovered will equal or exceed the estimate. To achieve reasonable certainty, NSAI employed technologies that have been demonstrated to yield results with consistency and repeatability. The technologies and economic data used in the estimation of our proved reserves include, but are not limited to, well logs, geologic maps and available down well and production data, seismic data, well test data. | |||||||||||
Oil and Gas Reserve Information. The following reserve quantities and future net cash flow information for our proved reserves located in the State of Michigan in the United States have been estimated as of June 30, 2013. The determination of oil and gas reserves is based on estimates, which are highly complex and interpretive. The estimates are subject to continuing change as additional information becomes available. | |||||||||||
The information required by Items 1204 to 1208 of Regulation S-K are provided as follows: | |||||||||||
Reserve Category | Oil (BBLS) | Natural Gas (MCF) | Present Worth at 10% | ||||||||
Proved | |||||||||||
Developed: | |||||||||||
United States - Michigan | 52,398 | - | $ | 405,700 | |||||||
Undeveloped: | |||||||||||
United States - Michigan | - | - | $ | - | |||||||
Total Proved – June 30, 2012 | 52,398 | - | $ | 405,700 | |||||||
Reserved Quantity | Oil (BBLS) | ||||||||||
Balance June 30, 2011 | 38,003 | ||||||||||
Purchases | - | ||||||||||
Production | (1,170 | ) | |||||||||
Balance, June 30, 2012 | 36,833 | ||||||||||
Purchases | - | ||||||||||
Extensions, discoveries and other additions | 19,070 | ||||||||||
Production | (3,505 | ) | |||||||||
Balance, June 30, 2013 | 52,398 | ||||||||||
The standardized measure of discounted future net cash flows is provided using the 12-month unweighted arithmetic average and were held constant throughout the life of the properties. The oil price used as of June 30, 2013 was $87.52 per bbl of oil. Future production costs are based on year-end costs and include severance and ad valorem taxes. Each property that is leased by us is also charged with field-level overhead in the reserve calculation. The present value of future cash inflows is based on a 10% discount rate. | |||||||||||
Standardized Measure of Future Net Cash Flows: | |||||||||||
June 30, 2013 | |||||||||||
Future cash flows | $ | 1,219,300 | |||||||||
Future production and operating costs | (591,100 | ) | |||||||||
Future development costs | (10,900 | ) | |||||||||
Future income taxes | - | ||||||||||
Future net cash flows before discount | 617,300 | ||||||||||
10% discount for estimated timing of cash flows | (211,600 | ) | |||||||||
Standardized measure of discounted future net cash flows | $ | 405,700 | |||||||||
Changes in the Standard Measure of Discounted Cash Flows: | |||||||||||
30-Jun-13 | |||||||||||
Standardized measure of discounted future net cash flows, beginning of period | $ | 1,131,050 | |||||||||
Purchases of reserves in place | - | ||||||||||
Extension and discoveries, net of future production and development costs | - | ||||||||||
Sales of oil and gas produced, net of production costs | (209,700 | ) | |||||||||
Revisions of previous quantity estimates | (448,100 | ) | |||||||||
Net change in prices and production costs | (67,550 | ) | |||||||||
Net change in income taxes | - | ||||||||||
Changes in timing and other | - | ||||||||||
Standardized measure of discounted future net cash flows, end of period | $ | 405,700 | |||||||||
Production. For the year ended June 30, 2013, we only had oil production from our interest in the Brown 2-12 well located in Ingham County, Michigan. The Company produced approximately 3,505 barrels on a net basis. | |||||||||||
Drilling Activity. During the year ended June 30, 2013, we had no further drilling activity. One of the wells in the Dansville Prospect, the Brown 2-12, has been drilled and was put into production in the prior year. We also own a working interest in a three well developmental drilling project in Pottawatomie County, Oklahoma, known as the Magnolia Prospect. However, this prospect has been fully impaired for in the prior year due to lack of adequate production. | |||||||||||
Delivery Commitments. We are not obligated to provide a fixed and determinable quantity of oil or gas in the near future under existing contracts or agreements in Michigan. | |||||||||||
Gross and Net Productive Wells for the year ended June 30, 2013: | |||||||||||
Oil | |||||||||||
Gross | Net | ||||||||||
United States - | |||||||||||
Michigan | 1 | 0.44 | |||||||||
1 | 0.44 | ||||||||||
Gross and Net Developed Acreage for year ended June 30, 2013: | |||||||||||
Oil | |||||||||||
Gross | Net | ||||||||||
United States - | |||||||||||
Michigan | 160 | 42 | |||||||||
160 | 42 | ||||||||||
Gross and Net Undeveloped Acreage for year ended June 30, 2013: | |||||||||||
Oil | |||||||||||
Gross | Net | ||||||||||
United States - | |||||||||||
Michigan | 1,183 | 308 | |||||||||
1,183 | 308 | ||||||||||
Accounting_Policies_by_Policy_
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Jun. 30, 2013 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Nature of Operations and Basis of Presentation |
Nature of Operations | |
American Energy Development Corp. (the "Company") is currently an exploration stage company under the provisions of Accounting Standards Codification (ASC) No. 915, Development Stage Entities, and was incorporated under the laws of the State of Nevada on March 10, 2010. Since inception, the Company has produced almost no revenues and will continue to report as an exploration stage company until significant revenues are produced. | |
The Company’s principal activity is the exploration and development of oil and gas properties. | |
On July 12, 2011, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Nevada Secretary of State to change its name from “LJM Energy Corp.” to “American Energy Development Corp.” (the “Name Change”). The effective date of the Name Change with the Nevada Secretary of State is July 14, 2011. | |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 reported periods. Actual results could materially differ from those estimates. | |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents |
For purposes of the balance sheet and statement of cash flows, the Company considers all highly liquid debt instruments purchased with maturity of three months or less to be cash equivalents. | |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments |
The Company is required to estimate the fair value of all financial instruments included on its balance sheet under ASC 825, Financial Instruments. The carrying value of cash, accounts payable and accrued expenses approximate their fair value due to the short period to maturity of these instruments. | |
Oil and Gas Properties Policy [Policy Text Block] | Oil and Gas Properties |
The Company follows the full cost method of accounting for crude oil and natural gas properties. Under this method, all direct costs and certain indirect costs associated with acquisition of properties and successful as well as unsuccessful exploration and development activities are capitalized. Depreciation, depletion, and amortization of capitalized crude oil and natural gas properties and estimated future development costs, excluding unproved properties, are based on the unit-of-production method based on proved reserves. | |
The cost of investments in unproved properties and major development projects are excluded from capitalized costs to be amortized until it is determined whether or not proved reserves can be assigned to the properties. Until such a determination is made, the properties are assessed annually to ascertain whether impairment has occurred. The costs of drilling exploratory dry holes are included in the amortization base immediately upon determination that the well is dry. | |
For each cost center, capitalized costs are subject to an annual ceiling test, in which the costs shall not exceed the cost center ceiling. The cost center ceiling is equal to i) the present value of estimated future net revenues computed by applying current prices of oil and gas reserves (with consideration of price changes only to the extent provided by contractual arrangements) to estimated future production of proved oil and gas reserves as of the date of the latest balance sheet presented, less estimated future expenditures (based on current costs) to be incurred in developing and producing the proved reserves computed using a discount factor of ten percent and assuming continuation of existing economic conditions; plus ii) the cost of properties not being amortized; plus iii) the lower of cost or estimated fair value of unproven properties included in the costs being amortized; less iv) income tax effects related to differences between the book and tax basis of the properties. If unamortized costs capitalized within a cost center, less related deferred income taxes, exceed the cost center ceiling, the excess is charged to expense and separately disclosed during the period in which the excess occurs. | |
Asset Retirement Obligations, Policy [Policy Text Block] | Asset Retirement Obligation |
The Company accounts for its future asset retirement obligations by recording the fair value of the liability, if any, during the period in which it was incurred. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. The increase in carrying value of a property associated with the capitalization of an asset retirement cost is included in proved oil and gas properties within the Company’s balance sheets. The Company depletes the amount added to proved oil and gas property costs using the units-of-production method and the straight-line basis over the life of the assets. | |
The Company’s asset retirement obligation consists of costs related to the plugging of wells, removal of facilities and equipment and site restoration on its oil and gas properties and gathering assets. The asset retirement liability, if any, will be allocated to operating expense using a systematic and rational method. As of June 302013 and 2012, the Company reviewed plug and abandonment costs of its producing Brown 2-12 well and deemed the amount to be immaterial. | |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition |
Working interest, royalty and net profit interests are to be recognized as revenue when oil and gas are sold. The Company records the sale of its interests in prospects generally as a reduction to the cost pool without gain or loss recognition unless such a sale would significantly alter the relationship between capitalized costs and the proved reserves attributable to a cost center. A significant alteration would typically involve a sale of 25% or more of the proved reserves related to a single full cost pool. All terms of the sale are to be finalized and price readily determinable. | |
Stockholders' Equity, Policy [Policy Text Block] | Value of Stock Issued for Services |
The Company periodically issues shares of its common stock in exchange for, or in settlement of, services. The Company’s management values the shares issued in such transactions at either the then market price of the Company’s common stock after taking into consideration factors such as volume of shares issued or trading restrictions, or the value of the services rendered, whichever is more readily determinable. | |
Reclassification, Policy [Policy Text Block] | Reclassifications |
Certain amounts in the 2012 financial statements have been reclassified for comparative purposes to conform to the current year presentation. | |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentrations of Credit Risk |
The Company collects its receivables on its working interests in oil and gas properties from the well operators. As such, the Company generally has relatively few customers. These receivables are unsecured and the Company performs ongoing credit evaluations of the well operators’ financial condition whenever necessary. At June 30, 2013 and 2012, the Company had one customer that accounted for 100% of its oil and gas sales. Bad debt expense is recognized on an account-by-account review after all means of collection have been exhausted and recovery is not probable. | |
There was no bad debt expense for the years ended June 30, 2013 and 2012. | |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements |
There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's consolidated financial position, results of operations or cash flows. |
INVESTMENTS_IN_OIL_AND_GAS_PRO1
INVESTMENTS IN OIL AND GAS PROPERTIES (Tables) | 12 Months Ended | |||||
Jun. 30, 2013 | ||||||
Investments Schedule [Abstract] | ||||||
Schedule of Purchase Price Allocation [Table Text Block] | The allocation of the purchase price of the assets acquired and liabilities assumed based on their fair values was as follows: | |||||
Cash | $ | 250 | ||||
Oil and gas property - License | 42,400 | |||||
Oil and gas property - Unproved | 12,470,135 | |||||
Total assets acquired | 12,512,785 | |||||
Liabilities Assumed | (12,785 | ) | ||||
Total | $ | 12,500,000 |
WARRANTS_Tables
WARRANTS (Tables) | 12 Months Ended | 15 Months Ended | |||||||||||
Jun. 30, 2013 | Mar. 31, 2013 | ||||||||||||
Warrants [Abstract] | |||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | A summary of warrant activity for the period from June 30, 2011 through June 30, 2013 is presented below: | ||||||||||||
Weighted | Weighted | ||||||||||||
Average | Average | ||||||||||||
Number of | Exercise | Remaining | |||||||||||
Warrants | Price | Contract Term | |||||||||||
Outstanding June 30, 2011 | - | $ | - | - | |||||||||
Issued | 2,569,215 | $ | 1.46 | 3.54 years | |||||||||
Exercised | - | - | - | ||||||||||
Outstanding June 30, 2012 | 2,569,215 | $ | 1.46 | 3.54 years | |||||||||
Issued | 75,000 | $ | 0.66 | 4.34 years | |||||||||
Exercisable, June 30, 2013 | 2,644,215 | $ | 1.44 | 3.56 years | |||||||||
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] | The Company has reserved shares for future issuance upon conversion of warrants as follows: | ||||||||||||
Warrants | 2,644,215 | ||||||||||||
Reserved shares at June 30, 2013 | 2,644,215 |
PROVISION_FOR_INCOME_TAXES_Tab
PROVISION FOR INCOME TAXES (Tables) | 12 Months Ended | |||||
Jun. 30, 2013 | ||||||
Income Tax Disclosure [Abstract] | ||||||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | A summary of the Company’s deferred tax assets as of June 30, 2013 are as follows: | |||||
30-Jun-13 | ||||||
Federal net operating loss (@ 34%) | $ | 696,571 | ||||
Less: valuation allowance | (696,571 | ) | ||||
Net deferred tax asset | $ | - |
SUPPLEMENTAL_OIL_AND_GAS_RESER1
SUPPLEMENTAL OIL AND GAS RESERVE INFORMATION (Unaudited) (Tables) | 12 Months Ended | ||||||||||
Jun. 30, 2013 | |||||||||||
Proved Oil and Gas Reserve Quantities Disclosure [Text Block] (Deprecated 2012-01-31) [Abstract] | |||||||||||
Oil and Gas Exploration and Production Industries Disclosures [Text Block] | The information required by Items 1204 to 1208 of Regulation S-K are provided as follows: | ||||||||||
Reserve Category | Oil (BBLS) | Natural Gas (MCF) | Present Worth at 10% | ||||||||
Proved | |||||||||||
Developed: | |||||||||||
United States - Michigan | 52,398 | - | $ | 405,700 | |||||||
Undeveloped: | |||||||||||
United States - Michigan | - | - | $ | - | |||||||
Total Proved – June 30, 2012 | 52,398 | - | $ | 405,700 | |||||||
Schedule of Oil and Gas In Process Activities [Table Text Block] | Reserve Category in Oil (BBLS) | ||||||||||
Reserved Quantity | Oil (BBLS) | ||||||||||
Balance June 30, 2011 | 38,003 | ||||||||||
Purchases | - | ||||||||||
Production | (1,170 | ) | |||||||||
Balance, June 30, 2012 | 36,833 | ||||||||||
Purchases | - | ||||||||||
Extensions, discoveries and other additions | 19,070 | ||||||||||
Production | (3,505 | ) | |||||||||
Balance, June 30, 2013 | 52,398 | ||||||||||
Standardized Measure of Discounted Future Cash Flows Relating to Proved Reserves Disclosure [Table Text Block] | Standardized Measure of Future Net Cash Flows: | ||||||||||
June 30, 2013 | |||||||||||
Future cash flows | $ | 1,219,300 | |||||||||
Future production and operating costs | (591,100 | ) | |||||||||
Future development costs | (10,900 | ) | |||||||||
Future income taxes | - | ||||||||||
Future net cash flows before discount | 617,300 | ||||||||||
10% discount for estimated timing of cash flows | (211,600 | ) | |||||||||
Standardized measure of discounted future net cash flows | $ | 405,700 | |||||||||
Schedule of Changes in Standardized Measure of Discounted Future Net Cash Flows [Table Text Block] | Changes in the Standard Measure of Discounted Cash Flows: | ||||||||||
30-Jun-13 | |||||||||||
Standardized measure of discounted future net cash flows, beginning of period | $ | 1,131,050 | |||||||||
Purchases of reserves in place | - | ||||||||||
Extension and discoveries, net of future production and development costs | - | ||||||||||
Sales of oil and gas produced, net of production costs | (209,700 | ) | |||||||||
Revisions of previous quantity estimates | (448,100 | ) | |||||||||
Net change in prices and production costs | (67,550 | ) | |||||||||
Net change in income taxes | - | ||||||||||
Changes in timing and other | - | ||||||||||
Standardized measure of discounted future net cash flows, end of period | $ | 405,700 |
NATURE_OF_OPERATIONS_AND_SUMMA1
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | Jun. 30, 2013 |
Accounting Policies [Abstract] | |
WorkingInterestDansvilleProspect | 43.75% |
WorkingInterestOptionProspects | 50.00% |
WorkingInterestMagnoliaProspects | 1.40% |
ConcentrationRiskCustomersOustandingReceivables | 100.00% |
GOING_CONCERN_Details
GOING CONCERN (Details) (USD $) | 40 Months Ended |
Jun. 30, 2013 | |
Going Concern [Abstract] | |
OperatingLossNet | $15,260,275 |
DIRECTOR_AGREEMENT_Details
DIRECTOR AGREEMENT (Details) (USD $) | Dec. 19, 2011 |
Director [Abstract] | |
Deferred Compensation Cash-based Arrangements, Liability, Current | $12,000 |
Deferred Compensation Equity | $100,000 |
INVESTMENTS_IN_OIL_AND_GAS_PRO2
INVESTMENTS IN OIL AND GAS PROPERTIES (Details) (USD $) | 1 Months Ended | 12 Months Ended | 16 Months Ended | |||||||
Dec. 31, 2012 | Oct. 31, 2012 | Jun. 30, 2012 | Apr. 30, 2012 | Mar. 31, 2012 | Jun. 30, 2013 | Jun. 30, 2012 | Jun. 30, 2013 | Jun. 14, 2012 | Sep. 13, 2011 | |
Investments Schedule [Abstract] | ||||||||||
PurchasePriceDansvilleProspect (in Shares) | 12,000,000 | |||||||||
CostIncurredDevelopmentandSeismicData | $1,085,000 | |||||||||
Costs Incurred, Acquisition of Oil and Gas Properties | 1,152,000 | 226,000 | -1,168,596 | -1,424,474 | ||||||
Proceeds from Other Operating Activities | 100,000 | |||||||||
OverridingRoyaltyInterest | 2.50% | |||||||||
RealizableInterestNet | 26.00% | |||||||||
ImpairmentChangeBasedOnFutureValueOfProvedReserves | 720,000 | 1,145,000 | ||||||||
CommonStockSharesReservoirResources (in Shares) | 12,500,000 | |||||||||
CommonStockValueReservoirResources | 12,500,000 | |||||||||
PurchasePricePerShare (in Dollars per share) | $1 | |||||||||
Impaired Assets to be Disposed of by Method Other than Sale, Amount of Impairment Loss | 12,512,535 | |||||||||
AcquisitionOfWorkingInterest | 43.75% | 43.75% | ||||||||
NetRevenueInterestRate | 35.00% | 35.00% | ||||||||
Purchase Price, White-tail Prospect | 487,500 | |||||||||
Reimbursement Revenue | 50,000 | 87,500 | ||||||||
Stock Issued During Period, Shares, Other (in Shares) | 476,191 | |||||||||
Stock Issued During Period, Value, Other | 200,000 | |||||||||
PurchasePriceOspreyProspect | 80,000 | 291,723 | ||||||||
Cost of Reimbursable Expense (in Dollars) | $40,000 | $900 |
INVESTMENTS_IN_OIL_AND_GAS_PRO3
INVESTMENTS IN OIL AND GAS PROPERTIES (Details) - The allocation of the purchase price of the assets acquired and liabilities assumed (USD $) | 3 Months Ended | ||
Mar. 31, 2012 | Jun. 30, 2013 | Jun. 30, 2012 | |
The allocation of the purchase price of the assets acquired and liabilities assumed [Abstract] | |||
Cash | $250 | ||
Oil and gas property - License | 42,400 | ||
Oil and gas property - Unproved | 12,470,135 | ||
Total assets acquired | 12,512,785 | ||
Liabilities Assumed | -12,785 | ||
Total | $12,500,000 | $428,392 | $14,105,600 |
ADVISOR_AGREEMENT_Details
ADVISOR AGREEMENT (Details) (USD $) | 1 Months Ended | 12 Months Ended |
Oct. 31, 2012 | Jun. 30, 2013 | |
Advisory Agreement [Abstract] | ||
Cost of Reimbursable Expense (in Dollars) | $40,000 | $900 |
Common Stock, Shares, Advisor Agreement | 90,000 |
LOANS_FROM_STOCKHOLDER_Details
LOANS FROM STOCKHOLDER (Details) (USD $) | Dec. 23, 2011 | Dec. 02, 2011 | Mar. 31, 2010 |
Debt Disclosure [Abstract] | |||
Notes and Loans Payable | $13,488 | $109,962 | $30,000 |
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | 10.00% |
COMMON_STOCK_Details
COMMON STOCK (Details) (USD $) | Dec. 20, 2012 | Nov. 29, 2012 | Oct. 31, 2012 | Sep. 19, 2012 | Jun. 15, 2012 | Mar. 30, 2012 | Mar. 22, 2012 | Mar. 20, 2012 | Mar. 12, 2012 | Feb. 03, 2012 | Nov. 23, 2011 | Oct. 17, 2011 | Oct. 12, 2011 | Oct. 03, 2011 | Sep. 20, 2011 | Jul. 12, 2011 | Jun. 30, 2011 | Jun. 14, 2011 |
Stockholders' Equity Note [Abstract] | ||||||||||||||||||
Common Stock, Additional Series, Shares, Issued (Deprecated 2009-01-31) | 35,192 | 12,500,000 | 100,000 | 90,000 | 69,167,100 | 12,000,000 | ||||||||||||
Common Stock, Additional Series, Par or Stated Value Per Share (Deprecated 2009-01-31) (in Dollars per share) | $0.48 | $0.94 | $0.48 | $0.48 | $0.48 | $0.00 | ||||||||||||
CommonStockSharesIssuedEnding | 171,167,100 | 230,557 | ||||||||||||||||
CommonStockAuthorizedBeginning | 100,000,000 | |||||||||||||||||
CommonStockAuthorizedEnding | 3,000,000,000 | |||||||||||||||||
CommonStockSharesIssuedBeginning | 5,705,570 | |||||||||||||||||
Common Stock, Value, Outstanding (in Dollars) | $7,800,000 | |||||||||||||||||
Drawdown (in Dollars) | 30,000 | 120,000 | 1,000,000 | 50,000 | 200,000 | 200,000 | ||||||||||||
Conversion of Stock, Shares Issued (Deprecated 2011-01-31) | 75,000 | 162,163 | 125,000 | 500,000 | 500,000 | |||||||||||||
Common Stock, Additional Series, No Par Value (Deprecated 2009-01-31) (in Dollars per share) | $0.30 | $0.40 | $0.74 | $0.78 | $0.40 | $0.50 | $0.40 | $0.40 | ||||||||||
CommonStockSharesIssuedConsultantServices | 300,000 | 75,000 | 476,191 | 0.89 | 1,282,052 | 500,000 | ||||||||||||
CommonStockCancelledShares | 85,000,000 | |||||||||||||||||
StockCancelledAndRetiredShares | 150,000 | |||||||||||||||||
Common Stock, Additional Series, Value (Deprecated 2009-01-31) (in Dollars) | 4,223 | 50,000 | ||||||||||||||||
CommonStockPurchasedWarrants | 75,000 | 162,163 | 1,282,052 | 125,000 | ||||||||||||||
DebtInstrumentForgiveness (in Dollars) | 7,614 | |||||||||||||||||
CommonStockValueWhiteTailProspect (in Dollars) | 200,000 | |||||||||||||||||
CommonStockValueConsultantServices (in Dollars) | 51,000 | 25,000 | ||||||||||||||||
CommonStockSharesIssuedBoardServices | 93,750 | |||||||||||||||||
CommonStockValueBoardMemberServices (in Dollars) | $28,125 |
WARRANTS_Details_Summary_of_wa
WARRANTS (Details) - Summary of warrant activity (USD $) | 12 Months Ended | ||
Jun. 30, 2013 | Jun. 30, 2012 | Jun. 30, 2011 | |
Summary of warrant activity [Abstract] | |||
Number of Warrants, Outstanding | 2,569,215 | ||
Weighted Average Exercise Price, Outstanding (in Dollars per share) | $1.46 | ||
Weighted Average Remaining Contract Term, Outstanding | 3.54 years | - | |
Number of Warrants, Issued | 75,000 | 2,569,215 | |
Weighted Average Exercise Price, Issued (in Dollars per share) | $0.66 | $1.46 | |
Weighted Average Remaining Contract Term, Issued | 4.34 years | 3.54 years | |
Exercisable, June 30, 2013 | 2,644,215 | ||
Exercisable, June 30, 2013 (in Dollars per share) | $1.44 | ||
Exercisable, June 30, 2013 | 3.56 years |
WARRANTS_Details_The_Company_h
WARRANTS (Details) - The Company has reserved shares for future issuance upon conversion of warrants as follows: | Jun. 30, 2013 |
The Company has reserved shares for future issuance upon conversion of warrants as follows: [Abstract] | |
Warrants | 2,644,215 |
Reserved shares at June 30, 2013 | 2,644,215 |
PROVISION_FOR_INCOME_TAXES_Det
PROVISION FOR INCOME TAXES (Details) (USD $) | 11 Months Ended | |
Jun. 03, 2013 | Jun. 30, 2013 | |
Income Tax Disclosure [Abstract] | ||
Deferred Tax Assets, Operating Loss Carryforwards, Domestic | $2,050,000 | |
Valuation Allowance, Deferred Tax Asset, Change in Amount | $99,714 |
PROVISION_FOR_INCOME_TAXES_Det1
PROVISION FOR INCOME TAXES (Details) - Summary of deferred tax assets (USD $) | Jun. 30, 2013 |
Summary of deferred tax assets [Abstract] | |
Federal net operating loss (@ 34%) | $696,571 |
Less: valuation allowance | -696,571 |
Net deferred tax asset | $0 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details) (USD $) | 12 Months Ended | 40 Months Ended | ||||
Jun. 30, 2012 | Jun. 30, 2011 | Jun. 30, 2013 | Dec. 23, 2011 | Dec. 02, 2011 | Mar. 31, 2010 | |
Related Party Transactions [Abstract] | ||||||
MonthlyFairValueRent | $300 | |||||
Operating Leases, Rent Expense | 3,600 | 3,600 | ||||
Weighted Average Number of Shares, Common Stock Subject to Repurchase or Cancellation (in Shares) | 85,000,000 | |||||
Other Loans Payable | $13,488 | $109,962 | $30,000 | |||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | 10.00% |
SUPPLEMENTAL_OIL_AND_GAS_RESER2
SUPPLEMENTAL OIL AND GAS RESERVE INFORMATION (Unaudited) (Details) | 12 Months Ended |
Jun. 30, 2013 | |
Proved Oil and Gas Reserve Quantities Disclosure [Text Block] (Deprecated 2012-01-31) [Abstract] | |
Oil Price, per bbl of oil (in Dollars per Item) | 87.52 |
Fair Value Inputs, Discount Rate | 10.00% |
SUPPLEMENTAL_OIL_AND_GAS_RESER3
SUPPLEMENTAL OIL AND GAS RESERVE INFORMATION (Unaudited) (Details) - The information required by Items 1204 to 1208 of Regulation S-K are provided as follows: (USD $) | 12 Months Ended |
Jun. 30, 2013 | |
Developed: | |
United States - Michigan | $52,398 |
United States - Michigan | 405,700 |
Total Proved b June 30, 2012 | 52,398 |
Total Proved b June 30, 2012 | $405,700 |
SUPPLEMENTAL_OIL_AND_GAS_RESER4
SUPPLEMENTAL OIL AND GAS RESERVE INFORMATION (Unaudited) (Details) - Reserve Category in Oil (BBLS) | 12 Months Ended |
Jun. 30, 2013 | |
Reserve Category in Oil (BBLS) [Abstract] | |
Balance | 38,003 |
Extensions, discoveries and other additions | 19,070 |
Production | -1,170 |
SUPPLEMENTAL_OIL_AND_GAS_RESER5
SUPPLEMENTAL OIL AND GAS RESERVE INFORMATION (Unaudited) (Details) - Standardized Measure of Future Net Cash Flows: (USD $) | 12 Months Ended |
Jun. 30, 2013 | |
Standardized Measure of Future Net Cash Flows: [Abstract] | |
Future cash flows | $1,219,300 |
Future production and operating costs | -591,100 |
Future development costs | -10,900 |
Future net cash flows before discount | 617,300 |
10% discount for estimated timing of cash flows | -211,600 |
Standardized measure of discounted future net cash flows | $405,700 |
SUPPLEMENTAL_OIL_AND_GAS_RESER6
SUPPLEMENTAL OIL AND GAS RESERVE INFORMATION (Unaudited) (Details) - Changes in the Standard Measure of Discounted Cash Flows: (USD $) | 12 Months Ended |
Jun. 30, 2013 | |
Changes in the Standard Measure of Discounted Cash Flows: [Abstract] | |
Standardized measure of discounted future net cash flows, beginning of period | $1,131,050 |
Sales of oil and gas produced, net of production costs | -209,700 |
Revisions of previous quantity estimates | -448,100 |
Net change in prices and production costs | -67,550 |
Standardized measure of discounted future net cash flows, end of period | $405,700 |