Commitments And Contingencies

12 Months Ended

Dec. 31, 2014

Commitments And Contingencies [Abstract]

Commitments And Contingencies

9. Commitments and Contingencies

The Company is a party to lawsuits in the ordinary course of its business. The Company does not believe that it is probable that the outcome of any individual action will have a material adverse effect, or that it is likely that adverse outcomes of individually insignificant actions will be significant enough, in number or magnitude, to have in the aggregate a material adverse effect on its financial statements.

On December 15, 2013, the Company entered into a 38 month lease (2 months free) for office space in Greenwood Village Colorado. The payment on this lease is approximately $2,700 per month and expired February 28, 2017. On May 14, 2014, the lease was amended to include additional leased space at the Greenwood Village Colorado office. The amendment extended the lease to expire on May 31, 2017. The monthly lease payments were amended as follows: $3,965.06 per month for the period June 2014 through May 2015; $4,090.94 per month for the period June 2015 through May 2016; $4,216.81 per month for the period June 2016 through May 2017. Future non-cancellable commitments related to this lease total approximately $48,000 due in 2015, $50,000 due in 2016, and $21,000 due in 2017.

Office rent expense for each of the three years ended December 31, 2014, 2013, and 2012 was $73,000, $92,000, and $80,000, respectively.

The Company as designated operator of the Hoactzin properties was administratively issued an Incident of Non-Compliance by BSEE during the quarter ended September 30, 2012 concerning one of Hoactzins operated properties. This action calls for payment of a civil penalty of $386,000 for failure to provide, upon request, documentation to the BSEE evidencing that certain safety inspections and tests had been conducted in 2011. In the 4^th quarter of 2012, the Company filed an administrative appeal with the Interior Board of Land Appeals (IBLA) of this action in order to attempt to significantly reduce the civil penalty. This appeal required a fully collateralized appeal bond to postpone the payment obligation until the appeal was determined. The Company posted and collateralized this bond with RLI Insurance Company. If the bond was not posted, the appeal would have been administratively denied and the order to the Company as operator to pay the $386,000 penalty would have become final. On June 23, 2014, the IBLA affirmed the civil penalty without reduction. On September 22, 2014, the Company sought judicial review of the June 23, 2014 agency action in the federal district court in the Eastern District of Louisiana at New Orleans. While the civil penalty could ultimately be reduced in the judicial review process, as a result of the determination by the IBLA, the Company recorded a liability of $386,000 in the Companys Consolidated Balance Sheets under Accrued and other current liabilities and an expense in its Consolidated Statements of Operations under Production costs and taxes for the year ended December 31, 2014.