Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Jun. 30, 2014 | Aug. 14, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'WESTCOTT PRODUCTS CORP | ' |
Entity Central Index Key | '0000845819 | ' |
Document Type | 'S-1 | ' |
Document Period End Date | 30-Jun-14 | ' |
Amendment Flag | 'true | ' |
Current Fiscal Year End Date | '--09-30 | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' |
Is Entity a Voluntary Filer? | 'No | ' |
Is Entity's Reporting Status Current? | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 12,500,000 |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2014 | ' |
Amendment Description | 'The financials are being amended to combine the unaudited financials of Westcott Products with the audited financials of Dala Petroleum Corp. | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Including Dala Petroleum 5-21-14) (USD $) | Jun. 30, 2014 | 21-May-14 |
Current Assets | ' | ' |
Cash and cash equivalents | $1,531,052 | $0 |
Total current assets | 1,531,052 | 0 |
Oil and natural gas properties, at cost, using the full cost method of accounting | 1,898,947 | 1,898,947 |
TOTAL ASSETS | 3,429,999 | 1,898,947 |
Current Liabilities | ' | ' |
Accounts payable | 16,482 | 27,311 |
Due to related parties | 4,288 | 48,625 |
Total current liabilities | 20,770 | 75,936 |
Derivative liabilities | 817,807 | 0 |
Total liabilities | 838,577 | 75,936 |
Commitments and contingencies | ' | ' |
Series A preferred convertible stock | 1,313,956 | ' |
Stockholders' Equity | ' | ' |
Common Stock | 12,500 | 1,000 |
Additional paid-in capital | 1,604,728 | 1,897,947 |
Accumulated deficit | -339,762 | -75,936 |
Total stockholders' equity | 1,277,466 | 1,823,010 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $3,429,999 | $1,898,947 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Including Dala Petroleum 5-21-14) (Parenthetical) (USD $) | Jun. 30, 2014 | 21-May-14 |
Statement of Financial Position [Abstract] | ' | ' |
Series A preferred convertible stock, par value per share in dollars | $0.01 | ' |
Series A preferred convertible stock, shares authorized | 50,000,000 | ' |
Series A preferred convertible stock, shares issued | 2,025 | ' |
Series A preferred convertible stock, shares outstanding | 2,025 | ' |
Series A preferred convertible stock, dividend rate | 6.00% | ' |
Common stock, par value in dollars | $0.00 | $0.00 |
Common stock, shares authorized | 50,000,000 | 10,000,000 |
Common stock, shares issued | 12,500,000 | 1,000,000 |
Common stock, shares outstanding | 12,500,000 | 1,000,000 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Including Dala Petroleum 5-21-14) (USD $) | 3 Months Ended | 4 Months Ended | 6 Months Ended |
Jun. 30, 2014 | 21-May-14 | Jun. 30, 2014 | |
Income Statement [Abstract] | ' | ' | ' |
Revenues | $0 | $0 | $0 |
Operating expenses: | ' | ' | ' |
General and administrative | 260,151 | 75,936 | 282,806 |
Impairment of oil and natural gas properties | 43,938 | 0 | 43,938 |
Total costs and expenses | 304,089 | 75,936 | 326,744 |
Net loss from operations | -304,089 | -75,936 | -326,744 |
Net loss | -304,089 | -75,936 | -326,744 |
Dividends on preferred stock | 13,018 | 0 | 13,018 |
Net loss attributable to common stock | ($317,107) | ($75,936) | ($339,762) |
Basic and diluted loss per share | ($0.06) | ($0.21) | ($0.12) |
Weighted average number of shares outstanding, basic and diluted | 5,302,198 | 362,903 | 2,942,073 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statement of Equity (Including Dala Petroleum) (USD $) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning Balance at Jan. 16, 2014 | $0 | $0 | $0 | $0 |
Beginning Balance - shares at Jan. 16, 2014 | 0 | ' | ' | ' |
Contributed assets in exchange for common stock, value | 1,000 | 1,897,947 | 0 | 1,897,947 |
Contributed assets in exchange for common stock, shares | 1,000,000 | ' | ' | ' |
Dividends on preferred stock | ' | ' | ' | 0 |
Net loss | ' | ' | -75,936 | -75,936 |
Ending Balance at May. 21, 2014 | 1,000 | 1,897,947 | -75,936 | 1,823,010 |
Ending Balance - shares at May. 21, 2014 | 1,000,000 | ' | ' | ' |
Beginning Balance at Jan. 16, 2014 | 0 | 0 | 0 | 0 |
Beginning Balance - shares at Jan. 16, 2014 | 0 | ' | ' | ' |
Contributed assets in exchange for common stock, value | 10,000 | 1,888,947 | ' | 1,898,947 |
Contributed assets in exchange for common stock, shares | 10,000,000 | ' | ' | ' |
Recapitalization from Reverse Merger, value | 2,500 | -153,544 | ' | -151,044 |
Recapitalization from Reverse Merger, shares | 2,500,000 | ' | ' | ' |
Derivatives related to preferred stock and warrants | ' | -106,763 | ' | -106,763 |
Offering costs related to issuance of preferred stock | ' | -35,000 | ' | -35,000 |
Stock-based compensation | ' | 11,088 | ' | 11,088 |
Dividends on preferred stock | ' | ' | -13,018 | -13,018 |
Net loss | ' | ' | -326,744 | -326,744 |
Ending Balance at Jun. 30, 2014 | $12,500 | $1,604,728 | ($339,762) | $1,277,466 |
Ending Balance - shares at Jun. 30, 2014 | 12,500,000 | ' | ' | ' |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (Including Dala Petroleum 5-21-14) (USD $) | 4 Months Ended | 6 Months Ended |
21-May-14 | Jun. 30, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ' | ' |
Net loss | ($75,936) | ($326,744) |
Adjustments to reconcile net loss to net cash from operating activities: | ' | ' |
Impairment of oil and natural gas properties | 0 | 43,938 |
Stock-based compensation | 0 | 11,088 |
Accounts payable | 27,311 | 16,482 |
Due to related parties | 48,625 | 4,288 |
NET CASH USED IN OPERATING ACTIVITIES | 0 | -250,948 |
CASH FLOWS FROM INVESTING ACTIVITIES | ' | ' |
Payment of net liabilites from Westcott in Reverse Merger | 0 | -151,044 |
Cash paid for oil and natural gas properties | 0 | -43,938 |
CASH USED IN INVESTING ACTIVITIES | 0 | -194,982 |
CASH FLOWS FROM FINANCING ACTIVITIES | ' | ' |
Proceeds from issuance of convertible preferred stock, net of offering costs | 0 | 1,990,000 |
Payment of dividends on preferred stock | 0 | 13,018 |
CASH PROVIDED BY FINANCING ACTIVITIES | 0 | 1,976,982 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 0 | 1,531,052 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 0 | 0 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 0 | 1,531,052 |
SUPPLEMENTAL CASH FLOW INFORMATION | ' | ' |
Interest paid | 0 | 0 |
Income taxes paid | 0 | 0 |
NONCASH INVESTING AND FINANCING ACTIVITIES | ' | ' |
Issuance of common stock for oil and natural gas properties | 1,897,947 | 1,898,947 |
Derivative liabilities related to preferred stock and warrants | $0 | $817,807 |
Organization
Organization | 6 Months Ended |
Jun. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Organization | ' |
NOTE 1 – ORGANIZATION | |
Westcott Products Corporation (the “Company” or “Westcott”) was incorporated as “Light Tech, Inc.” under the laws of the State of Nevada on May 24, 1984. A subsidiary in the name “Westcott Products Corporation” was organized by us under the laws of the State of Delaware on June 24, 1986, for the purpose of changing our name and domicile to the State of Delaware. On June 27, 1986, we merged with the Delaware subsidiary, with the survivor being Westcott Products Corporation, a Delaware corporation. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 4 Months Ended |
21-May-14 | |
Accounting Policies [Abstract] | ' |
Summary of Significant Accounting Policies | ' |
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | |
Dala Petroleum Corp. ("Dala" or the “Company”) was established on January 17, 2014 (Date of Inception). The Company is in the exploration stage and has yet to begin operations. Commencing on the Date of Inception, for the accompanying financial statements, the Company’s sponsors paid expenses, entered into agreements, and began organizing the entity on behalf of the Company. Accordingly, the Balance Sheet and related Statements of Operations, Stockholders’ Equity and Cash Flows reflect activity prior to the Company’s date of incorporation in the state of Nevada as a C-Corporation on March 20, 2014. | |
The Company has not commenced any significant operations and, in accordance with ASC Topic 915, the Company is considered an exploration stage company. | |
The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America applicable to exploration stage enterprises, and are expressed in U.S. dollars. | |
Nature of Operations | |
The Company is focused on the acquisition and development of oil and natural gas resources in the United States. The Company has not found oil and natural gas resources in potentially commercially exploitable quantities and is engaged in both determining the most advantageous development program and in exploring certain lands in an effort to discover hydrocarbons. The Company has been in the exploration stage since its formation and has not realized revenues from its planned principal operations. | |
Use of Estimates | |
The timely preparation of financial statements 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 revenue and expenses during the reporting period. Actual results could differ significantly from those estimates. | |
Fair value of financial instruments | |
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The Company uses a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following: | |
Level 1 – Unadjusted quoted prices in active markets that are accessible at measurement date for identical assets or liabilities. | |
Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities and less observable from objective sources. | |
The Company has no assets that are measured at fair value. | |
Loss per share | |
The Company follows ASC Topic 260 to account for the loss per share. Basic loss per common share calculations are determined by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted loss per common share calculations are determined by dividing net loss by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation. | |
As the Company has incurred losses for the period ended May 21, 2014, the potentially dilutive shares are anti-dilutive and are thus not added into the loss per share calculations. | |
Oil and natural gas properties | |
The Company follows the full cost method of accounting for oil and natural gas operations whereby all costs related to the exploration and development of oil and natural gas properties are initially capitalized into a single cost center (“full cost pool”). Such costs include land acquisition costs, a portion of employee salaries related to property development, geological and geophysical expenses, carrying charges on non-producing properties, costs of drilling directly related to acquisition, and exploration activities. Internal salaries are capitalized based on employee time allocated to the acquisition of leaseholds and development of oil and natural gas properties. The Company did not capitalize interest for the period ended May 21, 2014. | |
Proceeds from property sales will generally be credited to the full cost pool, with no gain or loss recognized, unless such a sale would significantly alter the relationship between capitalized costs and the proved reserves attributable to these costs. No gain or loss was recognized on any sales during the period. | |
The Company assesses all items classified as unproved property on a quarterly basis for possible impairment or reduction in value. The assessment includes consideration of the following factors, among others: intent to drill, remaining lease term, geological and geophysical evaluations, drilling results and activity, the assignment of proved reserves, and the economic viability of development if proved reserves are assigned. During any period in which these factors indicate an impairment, the cumulative drilling costs incurred to date for such property and all or a portion of the associated leasehold costs are transferred to the full cost pool and are then subject to depletion and amortization. | |
Capitalized costs associated with impaired properties and properties having proved reserves, estimated future development costs, and asset retirement costs under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 410-20-25 are depleted and amortized on the unit-of-production method based on the estimated gross proved reserves. The costs of unproved properties are withheld from the depletion base until such time as they are developed, impaired, or abandoned. | |
Under the full cost method of accounting, capitalized oil and natural gas property costs less accumulated depletion, net of deferred income taxes, may not exceed a ceiling amount equal to the present value, discounted at 10%, of estimated future net revenues from proved oil and natural gas reserves plus the cost of unproved properties not subject to amortization (without regard to estimates of fair value), or estimated fair value, if lower, of unproved properties that are subject to amortization. Should capitalized costs exceed this ceiling, which is tested on a quarterly basis, an impairment is recognized. The present value of estimated future net revenues is computed by applying prices based on a 12-month unweighted average of the oil and natural gas prices in effect on the first day of each month, less estimated future expenditures to be incurred in developing and producing the proved reserves (assuming the continuation of existing economic conditions), less any applicable future taxes. | |
Revenue recognition | |
The Company recognizes oil and natural gas revenues from our interests in producing wells when production is delivered to, and title has transferred to, the purchaser and to the extent the selling price is reasonably determinable. | |
The Company uses the sales method of accounting for balancing of natural gas production and would recognize a liability if the existing proven reserves were not adequate to cover the current imbalance situation. | |
Asset retirement obligation | |
ARO reflects the estimated present value of the amount of dismantlement, removal, site reclamation and similar activities associated with the Company's oil and natural gas properties. Inherent in the fair value calculation of the ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlement and changes in the legal, regulatory, environmental and political environments. | |
Income Taxes | |
The Company follows ASC Topic 740 for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change. | |
Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. The net operating loss carryforward for the period ended May 21, 2014 is $75,936. | |
The Company applies a more-likely-than-not recognition threshold for all tax uncertainties. ASC Topic 740 only allows the recognition of those tax benefits that have a greater than fifty percent likelihood of being sustained upon examination by the taxing authorities. As of May 21, 2014, the Company reviewed its tax positions and determined there were no outstanding, or retroactive tax positions with less than a 50% likelihood of being sustained upon examination by the taxing authorities, therefore this standard has not had a material effect on the Company. | |
Recent Pronouncements | |
The Company has evaluated the recent accounting pronouncements through May 2014 and believes that none of them will have a material effect on the company’s financial statements. |
Going_Concern
Going Concern | 4 Months Ended |
21-May-14 | |
Going Concern | ' |
Going Concern | ' |
NOTE 2 – GOING CONCERN | |
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. As noted above, the Company is in the exploration stage and, accordingly, has not yet generated revenues from operations. Since its inception, the Company has been engaged substantially in financing activities and developing its business plan and incurring startup costs and expenses. As a result, the Company incurred accumulated net losses from Inception (January 17, 2014) through the period ended May 21, 2014 of $75,936. These factors, among others, raise substantial doubt about its ability to continue as a going concern. | |
The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues. Failure to obtain additional financing would have a material adverse effect on our business operations. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty. |
Merger
Merger | 6 Months Ended |
Jun. 30, 2014 | |
Business Combinations [Abstract] | ' |
Merger | ' |
NOTE 2 – MERGER | |
On June 2, 2014, the Company, its newly formed and wholly-owned subsidiary, Dala Acquisition Corp., a Nevada corporation (“Merger Subsidiary”), and Dala Petroleum Corp., a Nevada corporation (“Dala”), executed and delivered an Agreement and Plan of Merger (the “Merger Agreement”), whereby Merger Subsidiary merged with and into Dala, and Dala was the surviving company under the merger and became a wholly-owned subsidiary of Westcott (the “Merger”) on the closing of the Merger. | |
Effective June 2, 2014, the respective Boards of Directors of Westcott and Dala, along with Westcott, as the sole stockholder of Merger Subsidiary, and Dala’s sole stockholder Chisholm Partners II, LLC, a Louisiana limited liability company (“Chisholm II”) owning 100% of the outstanding voting securities of Dala approved the Merger by written consent, and the Articles of Merger were filed with the Secretary of State of the State of Nevada on such date, which was the effective date of the Merger. Accordingly, Westcott issued 10,000,000 shares of its common stock in exchange for all of the outstanding shares of common stock of Dala, which was distributed to Dala Petroleum’s sole shareholder and was then distributed on a pro rata basis to its members. | |
Immediately after the Merger, there were 12,500,000 outstanding shares of Westcott common stock, with pre-Merger Westcott stockholders owning 2,500,000 of these shares or approximately 20% of the outstanding voting securities of Westcott; and the members of Dala’s sole stockholder owning approximately 10,000,000 of these shares or approximately 80% of these outstanding voting securities of Westcott. | |
Several conditions precedent as set forth in the Merger Agreement were completed prior to the Merger. One critical condition precedent set forth in the Merger Agreement was that Westcott would raise no less than $2,000,000 (the minimum offering) from persons who are “accredited investors” in consideration of the issuance (or the conversion) of a minimum of 2,000 shares up to a maximum of 2,500 shares of its Series A 6% Convertible Preferred Stock at the offering price of $1,000 per unit. | |
On June 3, 2014, the Company sold 2,025 units in the offering. Each unit consisted of one share of Series A 6% Convertible Preferred Stock that is convertible at any time at the option of the Holder into common stock at the conversion price of $0.70 per common share based on the total dollar amount invested and 1,429 warrants to purchase common shares of the Company at an exercise price of $1.35 with a life of three years as of the “Effective Date, ” defined as the earliest date of the following to occur: (a) the initial registration statement required by the Offering Documents has been declared effective by the United States Securities and Exchange Commission (the “SEC”), (b) all of the underlying shares have been sold pursuant to SEC Rule 144 or may be sold pursuant to SEC Rule 144 without the requirement for the Company to be in compliance with the current public information required under SEC Rule 144 and without volume or manner-of-sale restrictions or (c) following the one year anniversary of June 3, 2014. | |
Dala possesses rights to engage in oil and natural gas exploration and development on approximately 300 leases in north central Kansas, with total acreage of approximately 80,000 acres (the “Property”). Dala is operating as an early-stage oil exploration company focused on the Property, which has oil potential at depths of less than 6,000 feet. With the Merger, the Company now has these rights. | |
Prior to the Merger, Westcott was considered a shell company, as defined in SEC Rule 12b-2. Therefore, for financial reporting purposes, the Merger is being accounted for as a reverse-merger and recapitalization of Dala. |
Basis_of_Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Basis of Presentation | ' |
NOTE 3 – BASIS OF PRESENTATION | |
The accompanying financial statements have been prepared without audit, pursuant to the rules and regulations of the SEC, in accordance with accounting principles generally accepted in the United States of America. The interim financial statements reflect all adjustments, consisting of normal recurring adjustments which, in the opinion of management, are necessary to present a fair statement of the results for the period. | |
As discussed above in Note 2, the Company merged with Dala Petroleum Corp., a Nevada corporation (“Dala”) on June 2, 2014 (the “Merger”). Dala is focused on the acquisition and development of oil and natural gas resources in the United States. Prior to the Merger, Westcott was considered a shell company, as defined in SEC Rule 12b-2. For financial reporting purposes, the Merger represents a “reverse merger” rather than a business combination. Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements are those of Dala immediately following the consummation of the reverse merger. | |
As Dala’s date of Inception was January 17, 2014 (“Inception”), the Condensed Consolidated Statement of Operations, the Condensed Consolidated Statement of Equity and the Condensed Consolidated Statement of Cash Flows include the activity for Dala since that date and the activity of Westcott since June 2, 2014. Comparative financial statements are not presented, as Dala was not in existence in the prior year. All share and per-share amounts in these financial statements have been recast to reflect the continuing entity common stock. | |
Use of Estimates | |
The timely preparation of financial statements 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 revenue and expenses during the reporting period. Actual results could differ significantly from those estimates. | |
Fair Value of Financial Instruments | |
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The Company uses a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following: | |
Level 1 – Unadjusted quoted prices in active markets that are accessible at measurement date for identical assets or liabilities. | |
Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities and less observable from objective sources. | |
Oil and Natural Gas Properties | |
The Company follows the full cost method of accounting for oil and natural gas operations whereby all costs related to the exploration and development of oil and natural gas properties are initially capitalized into a single cost center (“full cost pool”). Such costs include land acquisition costs, a portion of employee salaries related to property development, geological and geophysical expenses, carrying charges on non-producing properties, costs of drilling directly related to acquisition, and exploration activities. Internal salaries are capitalized based on employee time allocated to the acquisition of leaseholds and development of oil and natural gas properties. The Company did not capitalize interest for the period ended June 30, 2014. | |
Proceeds from property sales will generally be credited to the full cost pool, with no gain or loss recognized, unless such a sale would significantly alter the relationship between capitalized costs and the proved reserves attributable to these costs. There were no sales or gains or losses during the period presented. | |
The Company assesses all items classified as unproved property on a quarterly basis for possible impairment or reduction in value. The assessment includes consideration of the following factors, among others: intent to drill, remaining lease term, geological and geophysical evaluations, drilling results and activity, the assignment of proved reserves, and the economic viability of development if proved reserves are assigned. During any period in which these factors indicate an impairment, the cumulative drilling costs incurred to date for such property and all or a portion of the associated leasehold costs are transferred to the full cost pool and are then subject to depletion and amortization. The costs of drilling exploratory dry holes are included in the amortization base immediately upon determination that the well is dry. | |
Capitalized costs associated with impaired properties and properties having proved reserves, estimated future development costs, and asset retirement costs under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 410-20-25 are depleted and amortized on the unit-of-production method based on the estimated gross proved reserves. The costs of unproved properties are withheld from the depletion base until such time as they are developed, impaired, or abandoned. | |
Under the full cost method of accounting, capitalized oil and natural gas property costs less accumulated depletion, net of deferred income taxes, may not exceed a ceiling amount equal to the present value, discounted at 10%, of estimated future net revenues from proved oil and natural gas reserves plus the cost of unproved properties not subject to amortization (without regard to estimates of fair value), or estimated fair value, if lower, of unproved properties that are subject to amortization. Should capitalized costs exceed this ceiling, which is tested on a quarterly basis, an impairment is recognized. The present value of estimated future net revenues is computed by applying prices based on a 12-month unweighted average of the oil and natural gas prices in effect on the first day of each month, less estimated future expenditures to be incurred in developing and producing the proved reserves (assuming the continuation of existing economic conditions), less any applicable future taxes. | |
During the three months ended June 30, 2014, the Company incurred $43,938 in oil and natural gas expenditures, which was one dry hole. This cost was impaired as of June 30, 2014 and is included within operating expenses in the statement of operations. | |
As of June 30, 2014, the Company's oil and natural gas properties of $1,898,947 were all classified as unproved. | |
Revenue Recognition | |
The Company recognizes oil and natural gas revenues from our interests in producing wells when production is delivered to, and title has transferred to, the purchaser and to the extent the selling price is reasonably determinable. | |
The Company uses the sales method of accounting for balancing of natural gas production and would recognize a liability if the existing proven reserves were not adequate to cover the current imbalance situation. | |
Asset Retirement Obligation | |
Asset retirement obligation (“ARO”) reflects the estimated present value of the amount of dismantlement, removal, site reclamation and similar activities associated with the Company's oil and natural gas properties. Inherent in the fair value calculation of the ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlement and changes in the legal, regulatory, environmental and political environments. As of June 30, 2014, the Company had $0 ARO liability. | |
Stock-based Compensation | |
The Company records stock based compensation in accordance with the guidance in ASC 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This requires that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award. | |
The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with ASC 718-10 and the conclusions reached by the ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by ASC 505-50. | |
Income Taxes | |
The Company follows ASC Topic 740 for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change. | |
Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. | |
The Company applies a more-likely-than-not recognition threshold for all tax uncertainties. ASC Topic 740 only allows the recognition of those tax benefits that have a greater than fifty percent likelihood of being sustained upon examination by the taxing authorities. As of June 30, 2014, the Company reviewed its tax positions and determined there were no outstanding, or retroactive tax positions with less than a 50% likelihood of being sustained upon examination by the taxing authorities, therefore this standard has not had a material effect on the Company. | |
Loss per Share | |
The Company follows ASC Topic 260 to account for the loss per share. Basic loss per common share calculations are determined by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted loss per common share calculations are determined by dividing net loss by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation. As the Company has incurred losses for the period ended June 30, 2014, the potentially dilutive shares totaling 6,386,582 are anti-dilutive and are thus not added into the loss per share calculations. |
Oil_and_Natural_Gas_Properties
Oil and Natural Gas Properties | 4 Months Ended |
21-May-14 | |
Oil and Gas Property [Abstract] | ' |
Oil and Natural Gas Properties | ' |
NOTE 3 – OIL AND NATURAL GAS PROPERTIES | |
As of May 21, 2014 the Company had $1,898,947 in capitalized costs for unproved oil and natural gas properties. | |
Project Description | |
The oil and natural gas assets were transferred from a related party to the Company in exchange for 1,000,000 shares of common stock on May 21, 2014. As the leases were transferred to the Company by significant shareholders of the Company, the leases were recorded based on the historical cost basis of the contributing shareholders. The Company has a substantial land position with 80,000 acres over a shallow, conventional oil play in north central Kansas. It is located in a four county area and is geographically defined by the boundaries of the productive North American Rift System. The Company will begin an eight well drilling program with two permitted wells at 12.5% working interests each and six additional wells at 25% working interests each. |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2014 | |
Accounting Changes and Error Corrections [Abstract] | ' |
Recent Accounting Pronouncements | ' |
NOTE 4 – RECENT ACCOUNTING PRONOUNCEMENTS | |
In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (“ASU No. 2014-09), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in GAAP when it becomes effective. The new standard is effective for annual reporting periods beginning after December 15, 2016. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. | |
In June 2014, the FASB issued Accounting Standards Update No. 2014-10 (“ASU No. 2014-10”), which eliminated the definition of a Development Stage Entity and the related reporting requirements. ASU No. 2014-10 is effective for annual reporting periods beginning after December 15, 2014, with early adoption allowed. The Company chose to adopt ASU No. 2014-10 early, effective in its financial statements for the year ended September 30, 2014. | |
The company has evaluated all other recent accounting pronouncements and believes that none of them will have a significant effect on the company’s financial statement. |
Related_Party_Transactions
Related Party Transactions | 4 Months Ended | 6 Months Ended |
21-May-14 | Jun. 30, 2014 | |
Related Party Transactions [Abstract] | ' | ' |
Related Party Transactions | ' | ' |
NOTE 5 – TRANSACTIONS WITH RELATED PARTIES | NOTE 5 – RELATED PARTY TRANSACTIONS | |
Accounts payable to related parties for reimbursement of expenses and settlement of current liabilities is $48,625 as of May 21, 2014. Those parties include Chisholm Partners II, LLC. and E. Will Gray, the Company’s CEO and Director. | On June 2, 2014, the Company issued 10,000,000 shares of its common stock to Chisholm II, Dala’s sole stockholder prior to the Merger, in exchange for oil and natural gas assets. As the leases were transferred to the Company by the sole shareholder of the Company, the leases were recorded based on the historical cost basis of the contributing shareholder of $1,898,947. | |
The $1,898,947 of oil and natural gas assets were transferred at cost from a related party to the Company in exchange for 10,000,000 shares of common stock. | The Company has a service agreement with Chisholm II to use its existing technical exploration team for general and administrative-type services on behalf of the Company. The Company is obligated to pay Chisholm II $25,000 per month plus expenses for these services. For the period from Inception to June 30, 2014, the Company paid $65,539 for its services. | |
In June 2014, the Company entered into an Option Participation Agreement with Chisholm II, whereby Chisholm II granted the Company the option, at the Company’s own election, to participate for up to twenty-five percent (25%) of Chisholm II’s share of each drilling operation in search for oil or gas in the State of Kansas undertaken by Chisholm II. | ||
The Company had general and administrative expenses paid on its behalf by Chisholm II in the amount of $25,178 during the period from Inception to June 30, 2014, which the Company had reimbursed by June 30, 2014. The Company also had general and administrative expenses paid on its behalf by an officer of the Company in the amount of $12,501. The balance due to the officer is $4,288 as of June 30, 2014. |
Preferred_Convertible_Stock_an
Preferred Convertible Stock and Warrants | 6 Months Ended |
Jun. 30, 2014 | |
Preferred Convertible Stock And Warrants | ' |
Preferred Convertible Stock and Warrants | ' |
NOTE 6 – PREFERRED CONVERTIBLE STOCK AND WARRANTS | |
As discussed above, during the period from Inception through June 30, 2014, the Company sold 2,025 units of Series A 6% Convertible Preferred Stock and related warrants at the price of $1,000 per unit. Proceeds received totaled $1,990,000 (net of offering costs of $35,000). Each unit consisted of one share of Series A 6% Convertible Preferred Stock that is convertible at any time at the option of the holder into common stock at the conversion price of $0.70 per common share based on the total dollar amount invested (subject to adjustment) and 1,429 warrants to purchase common shares of the Company at an exercise price of $1.35 for three years of the “Effective Date, ” defined as the earliest date of the following to occur: (a) the initial registration statement required by the Offering Documents has been declared effective by the United States Securities and Exchange Commission (the “SEC”), (b) all of the underlying shares have been sold pursuant to SEC Rule 144 or may be sold pursuant to SEC Rule 144 without the requirement for the Company to be in compliance with the current public information required under SEC Rule 144 and without volume or manner-of-sale restrictions or (c) following the one year anniversary of June 3, 2014. A total of 2,893,725 warrants were issued. The 6% per annum dividends are cumulative and payable quarterly in cash or, at the Company’s option, in shares of the Company’s common stock. | |
As the Series A 6% Convertible Preferred Stock is contingently redeemable at a fixed price and such redemption would not be solely within the control of the Company, the preferred stock is classified outside of stockholders’ equity, as “temporary equity” between liabilities and stockholders’ equity on the Company’s condensed consolidated balance sheet. |
Shareholders_Equity
Shareholder's Equity | 4 Months Ended | 6 Months Ended | ||||||
21-May-14 | Jun. 30, 2014 | |||||||
Equity [Abstract] | ' | ' | ||||||
Shareholder's Equity | ' | ' | ||||||
NOTE 4 – SHAREHOLDERS’ EQUITY | NOTE 7 – SHAREHOLDERS’ EQUITY | |||||||
The Company is authorized to issue 10,000,000 shares of its $0.001 par value common stock. | Common Stock | |||||||
On June 2, 2014, the Company issued 10,000,000 shares of its common stock to Chisholm II in exchange for oil and natural gas assets recorded at $1,898,947. | ||||||||
As discussed above, the Company completed a reverse merger with Dala, with Dala being the acquirer for financial reporting purposes. At the date of the Merger, Westcott had 2,500,000 shares of common stock outstanding, which are now outstanding for the merged Company. The total amount of shares issued and outstanding post-Merger, as of June 30, 2014 was 12,500,000 shares of common stock. | ||||||||
Stock-Based Compensation | ||||||||
On June 2, 2014, the Company granted options to acquire common shares to its Chief Executive Officer and two directors, totaling 600,000 options. The options have an exercise price of $0.70 per share for terms of six years. Of the total stock options, 400,000 vest equally over the next four years and 200,000 vest equally over the next two years. The total fair value of these options at the date of grant was estimated to be $400,087, and was determined using the Black-Scholes option pricing model with an expected lives of 4.25 (four-year vesting) and 3.75 years (two-year vesting), a risk-free interest rate of 1.92%, a dividend yield of 0% and expected volatility of 195%. The expected terms were determined using the simplified method. During the period from Inception to June 30, 2014, the Company recorded $11,088 of stock-based compensation expense. | ||||||||
The following is a summary of the status of all of the Company’s stock options as of June 30, 2014 and changes during the period ended on that date: | ||||||||
Number | Weighted- | Weighted- | ||||||
of Options | Average | Average | ||||||
Exercise Price | Remaining | |||||||
Contractual Life | ||||||||
(Years) | ||||||||
Outstanding at January 17, 2014 | - | - | - | |||||
Granted | 600,000 | $ | 0.7 | 5.93 | ||||
Exercised | - | - | - | |||||
Cancelled | - | - | - | |||||
Outstanding at June 30, 2014 | 600,000 | $ | 0.7 | 5.93 | ||||
Exercisable at June 30, 2014 | - | - | - | |||||
As of June 30, 2014, the intrinsic value of outstanding stock options was $0. | ||||||||
Income_Taxes
Income Taxes | 4 Months Ended | ||
21-May-14 | |||
Income Tax Disclosure [Abstract] | ' | ||
Income Taxes | ' | ||
NOTE 7 – INCOME TAXES | |||
The Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on the differences between financial reporting basis and the tax basis of the assets and liabilities and are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse. | |||
The provision for income taxes consists of the following as of May 21, 2014: | |||
21-May-14 | |||
Current Taxes | |||
Federal | - | ||
State | - | ||
Deferred Taxes | |||
Federal | - | ||
State | - | ||
Total Provision | - | ||
The total deferred tax asset is calculated by multiplying a 38.62% federal and state statutory tax rate by the cumulative Net Operating Loss (“NOL”) of $75,936. This Net Operating Loss will begin to expire in 2034 for federal jurisdictions and 2024 for state jurisdictions. The total valuation allowance is equal to the total deferred tax asset. Accordingly, deferred tax assets total approximately $29,327 as of May 21, 2014. | |||
The tax effects of significant items comprising the Company's net deferred taxes as of May 21, 2014 were as follows: | |||
21-May-14 | |||
NOL Deferred Tax Asset | $ | 29,327 | |
Valuation allowance | -29,327 | ||
$ | - | ||
As it is the first year of operations, the valuation allowance increased by the full amount of $29,327. | |||
The income tax provision differs from the amount of income tax determined by applying the federal and state statutory tax rate of 38.62% to pretax income from continuing operations for the period ended May 21, 2014 due to the following: | |||
21-May-14 | |||
Income tax benefit at U. S. federal statutory rates: | $ | -25,818 | |
Expected state taxes, net of federal benefit | -3,509 | ||
Change in valuation allowance | 29,327 | ||
$ | - | ||
The Company has no tax positions at May 21, 2014 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. | |||
The Company recognizes interest accrued relative to unrecognized tax benefits in interest and penalties accrued relative to unrecognized tax benefits in income tax expense. During the period from January 17, 2014 (date of inception) through May 21, 2014 the Company recognized no income tax related interest and penalties. The Company had no accruals for income tax related interest and penalties at May 21, 2014. | |||
The tax year 2014 remains open to examination for federal income tax purposes and by other major taxing jurisdictions to which we are subject. |
Derivatives
Derivatives | 6 Months Ended |
Jun. 30, 2014 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' |
Derivatives | ' |
NOTE 8 – DERIVATIVES | |
The Series A 6% Convertible Preferred Stock issued by the Company have a full-ratchet down-round provision on the exercise price, in which the investors’ conversion price is adjusted down to the share price of future financings. Therefore, following ASC 815-40, the warrants and the conversion feature of the preferred stock are not considered indexed to our own stock, and as such, the fair value of the embedded derivative liabilities are reflected on the balance sheet and all future changes in the fair value of these warrants and the conversion feature of the preferred stock will be recognized currently in earnings in our consolidated statement of operations under the caption “Loss on derivative valuation” until such time as the warrants are exercised or expire and until such time as the preferred stock is converted. The fair value of the conversion features of the preferred stock and the warrants was $661,896. The fair value of the full-ratchet down-round provision of the preferred stock and warrants was $155,911. The total derivative valuation as of June 30, 2014 was $817,807. These amounts were determined using a multi-nominal lattice model with the following assumptions as described below. | |
Warrants: | |
• Three year term | |
• Risk-free rate of 0.79% during the three year term | |
• Stock price volatility of 152.7% | |
• Assumption of future stock offerings by the Company of zero in the first six months of the term and 100% in the next twelve months, with zero probability of being a down round | |
Conversion Feature on Preferred Stock: | |
• Estimated conversion of all preferred shares within 14 months | |
• Risk-free rate of 0.37% based on the assumed two years outstanding | |
• Stock price volatility of 170.7% | |
• Assumption of future stock offerings by the Company of zero in the first six months of the term and 100% in the next twelve months, with zero probability of being a down round | |
Commitments_and_Contingencies
Commitments and Contingencies | 4 Months Ended | 6 Months Ended |
21-May-14 | Jun. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' | ' |
Commitments and Contingencies | ' | ' |
NOTE 6 – COMMITMENTS AND CONTINGENCIES | NOTE 9 – COMMITMENTS AND CONTINGENCIES | |
From time to time, the Company may become a party to litigation matters involving claims against the Company. Management believes that there are no current matters that would have a material effect on the Company’s financial position or results of operations. | The Company, as a lessee of oil and gas properties, is subject to various federal, state and local laws and regulations relating to discharge of materials into, and protection of, the environment. These laws and regulations may, among other things, impose liability on the lessee under an oil and gas lease for the cost of pollution clean-up resulting from operations and subject the lessee to liability for pollution damages. We believe our operations are in substantial compliance with existing requirements of governmental bodies. |
Other_Matters
Other Matters | 4 Months Ended |
21-May-14 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Other Matters | ' |
NOTE 8 – OTHER MATTERS | |
On January 8, 2014, the Company entered into a non-binding Letter of Intent (the “LOI”) with Westcott Products Corporation (“Westcott”). The LOI is subject to various conditions, including certain funding requirements. The parties continue to work towards a conclusion of the conditions of the LOI to complete the acquisition; however, no assurance can be given that the various conditions of the LOI will be satisfied or that this acquisition will be completed. |
Subsequent_Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
NOTE 10 – SUBSEQUENT EVENTS | |
In July 2014, the Company filed a Form S-1 with the SEC to register 6,988,574 shares of its common stock, consisting of 2,892,858 shares of common stock issuable upon the conversion of the Series A 6% Convertible Preferred Stock, 2,892,858 shares of common stock issuable upon the exercise of warrants, 867,858 shares of common stock reserved for the payment in stock of all dividends of the Series A 6% Convertible Preferred Stock for five years and 335,000 shares of common stock currently held by certain shareholders. | |
In June 2014, the Board of Directors of the Company, with the consent of a majority of the shareholders, approved the change of the Company name to Dala Petroleum Corp. The Information Statement was mailed to all shareholders in July 2014. The name change will become effective in August 29, 2014. | |
In July 2014, the Company participated in the drilling of an additional oil and gas well, which resulted in a dry hole. The Company incurred $44,969 in costs towards the well. |
Accounting_Policies_Policies
Accounting Policies (Policies) | 4 Months Ended | 6 Months Ended |
21-May-14 | Jun. 30, 2014 | |
Accounting Policies [Abstract] | ' | ' |
Basis of Presentation | ' | ' |
Basis of Presentation | BASIS OF PRESENTATION | |
Dala Petroleum Corp. ("Dala" or the “Company”) was established on January 17, 2014 (Date of Inception). The Company is in the exploration stage and has yet to begin operations. Commencing on the Date of Inception, for the accompanying financial statements, the Company’s sponsors paid expenses, entered into agreements, and began organizing the entity on behalf of the Company. Accordingly, the Balance Sheet and related Statements of Operations, Stockholders’ Equity and Cash Flows reflect activity prior to the Company’s date of incorporation in the state of Nevada as a C-Corporation on March 20, 2014. | The accompanying financial statements have been prepared without audit, pursuant to the rules and regulations of the SEC, in accordance with accounting principles generally accepted in the United States of America. The interim financial statements reflect all adjustments, consisting of normal recurring adjustments which, in the opinion of management, are necessary to present a fair statement of the results for the period. | |
The Company has not commenced any significant operations and, in accordance with ASC Topic 915, the Company is considered an exploration stage company. | As discussed above in Note 2, the Company merged with Dala Petroleum Corp., a Nevada corporation (“Dala”) on June 2, 2014 (the “Merger”). Dala is focused on the acquisition and development of oil and natural gas resources in the United States. Prior to the Merger, Westcott was considered a shell company, as defined in SEC Rule 12b-2. For financial reporting purposes, the Merger represents a “reverse merger” rather than a business combination. Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements are those of Dala immediately following the consummation of the reverse merger. | |
The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America applicable to exploration stage enterprises, and are expressed in U.S. dollars. | As Dala’s date of Inception was January 17, 2014 (“Inception”), the Condensed Consolidated Statement of Operations, the Condensed Consolidated Statement of Equity and the Condensed Consolidated Statement of Cash Flows include the activity for Dala since that date and the activity of Westcott since June 2, 2014. Comparative financial statements are not presented, as Dala was not in existence in the prior year. All share and per-share amounts in these financial statements have been recast to reflect the continuing entity common stock. | |
Nature of Operations | ||
The Company is focused on the acquisition and development of oil and natural gas resources in the United States. The Company has not found oil and natural gas resources in potentially commercially exploitable quantities and is engaged in both determining the most advantageous development program and in exploring certain lands in an effort to discover hydrocarbons. The Company has been in the exploration stage since its formation and has not realized revenues from its planned principal operations. | ||
Use of Estimates | ' | ' |
Use of Estimates | Use of Estimates | |
The timely preparation of financial statements 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 revenue and expenses during the reporting period. Actual results could differ significantly from those estimates. | The timely preparation of financial statements 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 revenue and expenses during the reporting period. Actual results could differ significantly from those estimates. | |
Fair value of financial instruments | ' | ' |
Fair value of financial instruments | Fair Value of Financial Instruments | |
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The Company uses a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following: | Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The Company uses a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following: | |
Level 1 – Unadjusted quoted prices in active markets that are accessible at measurement date for identical assets or liabilities. | Level 1 – Unadjusted quoted prices in active markets that are accessible at measurement date for identical assets or liabilities. | |
Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities and less observable from objective sources. | Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities and less observable from objective sources. | |
The Company has no assets that are measured at fair value. | ||
Loss per share | ' | ' |
Loss per share | Loss per Share | |
The Company follows ASC Topic 260 to account for the loss per share. Basic loss per common share calculations are determined by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted loss per common share calculations are determined by dividing net loss by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation. | The Company follows ASC Topic 260 to account for the loss per share. Basic loss per common share calculations are determined by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted loss per common share calculations are determined by dividing net loss by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation. | |
As the Company has incurred losses for the period ended May 21, 2014, the potentially dilutive shares are anti-dilutive and are thus not added into the loss per share calculations. | ||
Oil and natural gas properties | ' | ' |
Oil and natural gas properties | Oil and Natural Gas Properties | |
The Company follows the full cost method of accounting for oil and natural gas operations whereby all costs related to the exploration and development of oil and natural gas properties are initially capitalized into a single cost center (“full cost pool”). Such costs include land acquisition costs, a portion of employee salaries related to property development, geological and geophysical expenses, carrying charges on non-producing properties, costs of drilling directly related to acquisition, and exploration activities. Internal salaries are capitalized based on employee time allocated to the acquisition of leaseholds and development of oil and natural gas properties. The Company did not capitalize interest for the period ended May 21, 2014. | The Company follows the full cost method of accounting for oil and natural gas operations whereby all costs related to the exploration and development of oil and natural gas properties are initially capitalized into a single cost center (“full cost pool”). Such costs include land acquisition costs, a portion of employee salaries related to property development, geological and geophysical expenses, carrying charges on non-producing properties, costs of drilling directly related to acquisition, and exploration activities. Internal salaries are capitalized based on employee time allocated to the acquisition of leaseholds and development of oil and natural gas properties. The Company did not capitalize interest for the period ended June 30, 2014. | |
Proceeds from property sales will generally be credited to the full cost pool, with no gain or loss recognized, unless such a sale would significantly alter the relationship between capitalized costs and the proved reserves attributable to these costs. No gain or loss was recognized on any sales during the period. | Proceeds from property sales will generally be credited to the full cost pool, with no gain or loss recognized, unless such a sale would significantly alter the relationship between capitalized costs and the proved reserves attributable to these costs. There were no sales or gains or losses during the period presented. | |
The Company assesses all items classified as unproved property on a quarterly basis for possible impairment or reduction in value. The assessment includes consideration of the following factors, among others: intent to drill, remaining lease term, geological and geophysical evaluations, drilling results and activity, the assignment of proved reserves, and the economic viability of development if proved reserves are assigned. During any period in which these factors indicate an impairment, the cumulative drilling costs incurred to date for such property and all or a portion of the associated leasehold costs are transferred to the full cost pool and are then subject to depletion and amortization. | The Company assesses all items classified as unproved property on a quarterly basis for possible impairment or reduction in value. The assessment includes consideration of the following factors, among others: intent to drill, remaining lease term, geological and geophysical evaluations, drilling results and activity, the assignment of proved reserves, and the economic viability of development if proved reserves are assigned. During any period in which these factors indicate an impairment, the cumulative drilling costs incurred to date for such property and all or a portion of the associated leasehold costs are transferred to the full cost pool and are then subject to depletion and amortization. The costs of drilling exploratory dry holes are included in the amortization base immediately upon determination that the well is dry. | |
Capitalized costs associated with impaired properties and properties having proved reserves, estimated future development costs, and asset retirement costs under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 410-20-25 are depleted and amortized on the unit-of-production method based on the estimated gross proved reserves. The costs of unproved properties are withheld from the depletion base until such time as they are developed, impaired, or abandoned. | Capitalized costs associated with impaired properties and properties having proved reserves, estimated future development costs, and asset retirement costs under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 410-20-25 are depleted and amortized on the unit-of-production method based on the estimated gross proved reserves. The costs of unproved properties are withheld from the depletion base until such time as they are developed, impaired, or abandoned. | |
Under the full cost method of accounting, capitalized oil and natural gas property costs less accumulated depletion, net of deferred income taxes, may not exceed a ceiling amount equal to the present value, discounted at 10%, of estimated future net revenues from proved oil and natural gas reserves plus the cost of unproved properties not subject to amortization (without regard to estimates of fair value), or estimated fair value, if lower, of unproved properties that are subject to amortization. Should capitalized costs exceed this ceiling, which is tested on a quarterly basis, an impairment is recognized. The present value of estimated future net revenues is computed by applying prices based on a 12-month unweighted average of the oil and natural gas prices in effect on the first day of each month, less estimated future expenditures to be incurred in developing and producing the proved reserves (assuming the continuation of existing economic conditions), less any applicable future taxes. | Under the full cost method of accounting, capitalized oil and natural gas property costs less accumulated depletion, net of deferred income taxes, may not exceed a ceiling amount equal to the present value, discounted at 10%, of estimated future net revenues from proved oil and natural gas reserves plus the cost of unproved properties not subject to amortization (without regard to estimates of fair value), or estimated fair value, if lower, of unproved properties that are subject to amortization. Should capitalized costs exceed this ceiling, which is tested on a quarterly basis, an impairment is recognized. The present value of estimated future net revenues is computed by applying prices based on a 12-month unweighted average of the oil and natural gas prices in effect on the first day of each month, less estimated future expenditures to be incurred in developing and producing the proved reserves (assuming the continuation of existing economic conditions), less any applicable future taxes. | |
Revenue recognition | ' | ' |
Revenue recognition | Revenue Recognition | |
The Company recognizes oil and natural gas revenues from our interests in producing wells when production is delivered to, and title has transferred to, the purchaser and to the extent the selling price is reasonably determinable. | The Company recognizes oil and natural gas revenues from our interests in producing wells when production is delivered to, and title has transferred to, the purchaser and to the extent the selling price is reasonably determinable. | |
The Company uses the sales method of accounting for balancing of natural gas production and would recognize a liability if the existing proven reserves were not adequate to cover the current imbalance situation. | The Company uses the sales method of accounting for balancing of natural gas production and would recognize a liability if the existing proven reserves were not adequate to cover the current imbalance situation. | |
Asset retirement obligation | ' | ' |
Asset retirement obligation | Asset Retirement Obligation | |
ARO reflects the estimated present value of the amount of dismantlement, removal, site reclamation and similar activities associated with the Company's oil and natural gas properties. Inherent in the fair value calculation of the ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlement and changes in the legal, regulatory, environmental and political environments. | Asset retirement obligation (“ARO”) reflects the estimated present value of the amount of dismantlement, removal, site reclamation and similar activities associated with the Company's oil and natural gas properties. Inherent in the fair value calculation of the ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlement and changes in the legal, regulatory, environmental and political environments. | |
Stock-based Compensation | ' | ' |
Stock-based Compensation | ||
The Company records stock based compensation in accordance with the guidance in ASC 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This requires that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award. | ||
The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with ASC 718-10 and the conclusions reached by the ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by ASC 505-50. | ||
Income Taxes | ' | ' |
Income Taxes | Income Taxes | |
The Company follows ASC Topic 740 for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change. | The Company follows ASC Topic 740 for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change. | |
Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. The net operating loss carryforward for the period ended May 21, 2014 is $75,936. | Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. | |
The Company applies a more-likely-than-not recognition threshold for all tax uncertainties. ASC Topic 740 only allows the recognition of those tax benefits that have a greater than fifty percent likelihood of being sustained upon examination by the taxing authorities. As of May 21, 2014, the Company reviewed its tax positions and determined there were no outstanding, or retroactive tax positions with less than a 50% likelihood of being sustained upon examination by the taxing authorities, therefore this standard has not had a material effect on the Company. | The Company applies a more-likely-than-not recognition threshold for all tax uncertainties. ASC Topic 740 only allows the recognition of those tax benefits that have a greater than fifty percent likelihood of being sustained upon examination by the taxing authorities. As of June 30, 2014, the Company reviewed its tax positions and determined there were no outstanding, or retroactive tax positions with less than a 50% likelihood of being sustained upon examination by the taxing authorities, therefore this standard has not had a material effect on the Company. | |
Recent Pronouncements | ' | ' |
Recent Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS | |
The Company has evaluated the recent accounting pronouncements through May 2014 and believes that none of them will have a material effect on the company’s financial statements. | In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (“ASU No. 2014-09”), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in GAAP when it becomes effective. The new standard is effective for annual reporting periods beginning after December 15, 2016. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. | |
In June 2014, the FASB issued Accounting Standards Update No. 2014-10 (“ASU No. 2014-10”), which eliminated the definition of a Development Stage Entity and the related reporting requirements. ASU No. 2014-10 is effective for annual reporting periods beginning after December 15, 2014, with early adoption allowed. The Company chose to adopt ASU No. 2014-10 early, effective in its financial statements for the year ended September 30, 2014. | ||
The company has evaluated all other recent accounting pronouncements and believes that none of them will have a significant effect on the company’s financial statement. |
Shareholders_Equity_Tables
Shareholder's Equity (Tables) | 6 Months Ended | ||||||
Jun. 30, 2014 | |||||||
Equity [Abstract] | ' | ||||||
Schedule of Stock Option Activity | ' | ||||||
Number | Weighted- | Weighted- | |||||
of Options | Average | Average | |||||
Exercise Price | Remaining | ||||||
Contractual Life | |||||||
(Years) | |||||||
Outstanding at January 17, 2014 | - | - | - | ||||
Granted | 600,000 | $ | 0.7 | 5.93 | |||
Exercised | - | - | - | ||||
Cancelled | - | - | - | ||||
Outstanding at June 30, 2014 | 600,000 | $ | 0.7 | 5.93 | |||
Exercisable at June 30, 2014 | - | - | - |
Income_Taxes_Tables
Income Taxes (Tables) | 4 Months Ended | ||
21-May-14 | |||
Income Tax Disclosure [Abstract] | ' | ||
Schedule of Components of Income Tax Expense Benefits | ' | ||
21-May-14 | |||
Current Taxes | |||
Federal | - | ||
State | - | ||
Deferred Taxes | |||
Federal | - | ||
State | - | ||
Total Provision | - | ||
Schedule of Deferred Tax Assets and Liabilities | ' | ||
21-May-14 | |||
NOL Deferred Tax Asset | $ | 29,327 | |
Valuation allowance | -29,327 | ||
$ | - | ||
Schedule of Effective Income Tax Rate Reconciliation | ' | ||
21-May-14 | |||
Income tax benefit at U. S. federal statutory rates: | $ | -25,818 | |
Expected state taxes, net of federal benefit | -3,509 | ||
Change in valuation allowance | 29,327 | ||
$ | - |
Going_Concern_Details_Narrativ
Going Concern (Details Narrative) (USD $) | 21-May-14 |
Going Concern | ' |
Accumulated net losses | $75,936 |
Merger_Details_Narrative
Merger (Details Narrative) | 6 Months Ended | |
Jun. 30, 2014 | 21-May-14 | |
Integer | acre | |
acre | ||
Business Combinations [Abstract] | ' | ' |
Business acquisition, name of acquired entity | 'Dala Petroleum Corp. | ' |
Business acquisition, effective date of acquisition | 2-Jun-14 | ' |
Business acquisition, percentage of voting interest | 100.00% | ' |
Business acquisition, shares issued | 10,000,000 | ' |
Common stock, shares outstanding | 12,500,000 | 1,000,000 |
Series A preferred convertible stock, dividend rate | 6.00% | ' |
Business acquisition, pre-merger, equity interest in acquiree, description | 'There were 12,500,000 outstanding shares of Westcott common stock, with pre-Merger Westcott stockholders owning 2,500,000 of these shares or approximately 20% of the outstanding voting securities of Westcott; and the members of Dala's sole stockholder owning approximately 10,000,000 of these shares or approximately 80% of these outstanding voting securities of Westcott. | ' |
Business acquisition, contingent consideration arrangement, description | 'Several conditions precedent as set forth in the Merger Agreement were completed prior to the Merger. One critical condition precedent set forth in the Merger Agreement was that Westcott would raise no less than $2,000,000 (the minimum offering) from persons who are "accredited investors" in consideration of the issuance (or the conversion) of a minimum of 2,000 shares up to a maximum of 2,500 shares of its Series A 6% Convertible Preferred Stock at the offering price of $1,000 per unit. | ' |
Series A preferred convertible stock, units issued | 2,025 | ' |
Series A convertible preferred stock, conversion terms | 'Each unit consisted of one share of Series A 6% Convertible Preferred Stock that is convertible at any time at the option of the Holder into common stock at the conversion price of $0.70 per common share based on the total dollar amount invested and 1,429 warrants to purchase common shares of the Company at an exercise price of $1.35 with a life of three years as of the "Effective Date," defined as the earliest date of the following to occur: (a) the initial registration statement required by the Offering Documents has been declared effective by the United States Securities and Exchange Commission (the "SEC"), (b) all of the underlying shares have been sold pursuant to SEC Rule 144 or may be sold pursuant to SEC Rule 144 without the requirement for the Company to be in compliance with the current public information required under SEC Rule 144 and without volume or manner-of-sale restrictions or (c) following the one year anniversary of June 3, 2014. | ' |
Oil and gas leases, acreage | 80,000 | 80,000 |
Number of oil leases | 300 | ' |
Basis_of_Presentation_Details_
Basis of Presentation (Details Narrative) (USD $) | 4 Months Ended | 6 Months Ended |
21-May-14 | Jun. 30, 2014 | |
Oil and Gas Properties | ' | ' |
Oil and gas properties, unproved | $1,898,947 | $1,898,947 |
Expenditures for oil and gas properties | 0 | -43,938 |
Asset Retirement Obligations | ' | ' |
Asset retirement obligation | ' | $0 |
Earnings Per Share | ' | ' |
Potentially dilutive shares | ' | 6,386,582 |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Details Narrative) (USD $) | 21-May-14 |
Accounting Policies [Abstract] | ' |
Net operating loss carryforward | $75,936 |
Oil_and_Natural_Gas_Properties1
Oil and Natural Gas Properties (Details Narrative) (USD $) | 4 Months Ended | |
21-May-14 | Jun. 30, 2014 | |
Integer | acre | |
acre | ||
Oil and Gas Property [Abstract] | ' | ' |
Capitalized costs, unproved oil and natural gas properties | $1,898,947 | ' |
Shares issued for transfer of oil and natural gas assets | 10,000,000 | ' |
Oil and gas property, lease acreage | 80,000 | 80,000 |
Number of oil and gas wells capable of production | 8 | ' |
Working interest, description | 'The Company will begin an 8 well drilling program with 2 permitted wells at 12.5% working interest each and six additional wells at 25% working intrerests each. | ' |
Related_Party_Transactions_Det
Related Party Transactions (Details Narrative) (USD $) | 4 Months Ended | 6 Months Ended |
21-May-14 | Jun. 30, 2014 | |
Related Party Transactions [Abstract] | ' | ' |
Accounts payable, related parties | $48,625 | $4,288 |
Contribution of unproved oil and natural gas properties | ' | 1,898,947 |
Exploration and development obligation, description | ' | 'The Company has a service agreement with Chisholm II to use its existing technical exploration team to further explore and develop the oil and gas Property. The Company is obligated to pay Chisholm II $25,000 per month plus expenses for these services. |
Exploration and development expenses | ' | 65,539 |
Related party transaction, amounts of transactions | ' | 25,178 |
Repayment of related party transactions | ' | 25,178 |
Related party transaction, selling, general and administrative expenses | ' | $12,501 |
Shares issued for transfer of oil and natural gas assets | 10,000,000 | ' |
Preferred_Convertible_Stock_an1
Preferred Convertible Stock and Warrants (Details Narrative) (USD $) | 4 Months Ended | 6 Months Ended |
21-May-14 | Jun. 30, 2014 | |
Preferred Convertible Stock And Warrants | ' | ' |
Proceeds from issuance of convertible preferred stock, net of offering costs | $0 | $1,990,000 |
Warrants issued | ' | 2,893,725 |
Shareholders_Equity_Schedule_o
Shareholder's Equity - Schedule of Stock Option Activity (Details) (USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Share-Based Compensation Arrangement By Share-Based Payment Award Options Outstanding [Roll Forward] | ' |
Number of Options Outstanding, beginning of period | 0 |
Number of Options, Granted | 600,000 |
Number of Options Outstanding, end of period | 600,000 |
Share-Based Compensation Arrangement by Share-Based Payment Award Options Outstanding Weighted Average Exercise Price | ' |
Weighted Average Exercise Price Outstanding, beginning of period | $0 |
Weighted Average Exercise Price, Grants | $0.70 |
Weighted Average Exercise Price Outstanding, end of period | $0.70 |
Share-Based Compensation Arrangement by Share-Based Payment Award Options Additional Disclosures | ' |
Weighted Average Remaining Contractual Life (In Years) Grants | '6 years |
Weighted Average Remaining Contractual Life (In Years) Outstanding | '6 years |
Shareholders_Equity_Details_Na
Shareholder's Equity (Details Narrative) (USD $) | 4 Months Ended | 6 Months Ended |
21-May-14 | Jun. 30, 2014 | |
Equity [Abstract] | ' | ' |
Stock options, vesting terms | ' | 'Of the total stock options, 400,000 vest equally over the next four years and 200,000 vest equally over the next two years. |
Fair value of options, date of grant | ' | $400,087 |
Fair value assumptions, expected lives | ' | '4.25 (four-year vesting) and 3.75 years (two-year vesting) |
Fair value assumptions, risk-free interet rate | ' | 1.92% |
Fair value assumptions, dividend yield | ' | 0.00% |
Fair value assumptions, expected volatility | ' | 195.00% |
Stock-based compensation expense | 0 | 11,088 |
Intrinsic value of outstanding options | ' | $0 |
Common Stock, shares authorized | 10,000,000 | 50,000,000 |
Common Stock, par value per share | $0.00 | $0.00 |
Income_Taxes_Components_of_Inc
Income Taxes - Components of Income Tax Expense Benefits (Details) (USD $) | 4 Months Ended |
21-May-14 | |
Current Taxes | ' |
Federal | $0 |
State | 0 |
Deferred Taxes | ' |
Federal | 0 |
State | 0 |
Total Provision | $0 |
Income_Taxes_Schedule_of_Defer
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) (USD $) | 21-May-14 |
Income Tax Disclosure [Abstract] | ' |
NOL Deferred Tax Asset | $29,327 |
Valuation allowance | -29,327 |
Deferred Tax Assets, Net of Valuation Allowance | $0 |
Income_Taxes_Schedule_of_Effec
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) (USD $) | 4 Months Ended |
21-May-14 | |
Income Tax Disclosure [Abstract] | ' |
Income tax benefit at US federal statutory rates | $25,818 |
Expected state taxes, net of federal benefit | 3,509 |
Change in valuation allowance | $29,327 |
Income_Taxes_Details_Narrative
Income Taxes (Details Narrative) | 4 Months Ended |
21-May-14 | |
Income Tax Disclosure [Abstract] | ' |
Federal and state statutory tax rate | 38.62% |
Derivatives_Details_Narrative
Derivatives (Details Narrative) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | 21-May-14 | |
Derivative [Line Items] | ' | ' |
Fair value of preferred and warrants issued | $661,896 | ' |
Fair value of the full-rachet down-round provision of the preferred stock and warrants | 155,911 | ' |
Derivative liabilities | $817,807 | $0 |
Fair value, expected lives | '4.25 (four-year vesting) and 3.75 years (two-year vesting) | ' |
Fair value, risk-free rate | 1.92% | ' |
Fair value, stock price volatility | 195.00% | ' |
Warrant | ' | ' |
Derivative [Line Items] | ' | ' |
Fair value, expected lives | '3 year term | ' |
Fair value, risk-free rate | 0.79% | ' |
Fair value, stock price volatility | 152.70% | ' |
Conversion Feature of Preferred Stock | ' | ' |
Derivative [Line Items] | ' | ' |
Fair value, expected lives | 'Within 14 months | ' |
Fair value, risk-free rate | 0.37% | ' |
Fair value, stock price volatility | 170.70% | ' |
Subsequent_Events_Details_Narr
Subsequent Events (Details Narrative) (Subsequent Event, USD $) | 1 Months Ended |
Jul. 31, 2014 | |
Oil And Gas Activities | ' |
Subsequent Event [Line Items] | ' |
Costs incurred, exploration costs | $44,969 |
Common Stock Registered | ' |
Subsequent Event [Line Items] | ' |
Registration of common stock | 'In July 2014, the Company filed a Form S-1 with the SEC to register 6,988,574 shares of its common stock, consisting of 2,892,858 shares of common stock issuable upon the conversion of the Series A 6% Convertible Preferred Stock, 2,892,858 shares of common stock issuable upon the exercise of warrants, 867,858 shares of common stock reserved for the payment in stock of all dividends of the Series A 6% Convertible Preferred Stock for five years and 335,000 shares of common stock currently held by certain shareholders. |