CALIFORNIA | | 94-0787340 |
(State of other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
2008 21st. Street. P.O. Box 832, Bakersfield, California | | 93302 |
(Address of principal executive offices) | | (Zip Code) |
Registrant's telephone number: | (661) 325-1000 |
Large accelerated filer ¨ | | Accelerated Filer ¨ |
Non-accelerated filer ¨ | | Smaller reporting company x |
(Class) | | (Outstanding at August 14, 2013) |
Common Stock Without Par Value | | 4,688,085 |
| | | Page |
| | | |
PART I | |||
| | | |
Item 1. | Financial Statements | | |
| | | |
| Balance Sheets - June 30, 2013 (Unaudited) | | |
| and December 31, 2012 | | 3 |
| | | |
| Statement of Operations - | | |
| Three months ended June 30, 2013 and 2012 (Unaudited) | | 5 |
| Six months ended June 30, 2013 and 2012 (Unaudited) | | 6 |
| | | |
| Statements of Cash Flows - | | |
| Six months ended June 30, 2013 and 2012 (Unaudited) | | 7 |
| | | |
| Notes to Financial Statements (Unaudited) | | 9 |
| | | |
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | | 15 |
| | | |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | | 18 |
| | | |
Item 4. | Controls and Procedures | | 18 |
| | | |
PART II | |||
| | | |
Item 1. | Legal Proceedings | | 19 |
| | | |
Item 1A. | Risk Factors | | 19 |
| | | |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | | 19 |
| | | |
Item 3. | Defaults Upon Senior Securities | | 19 |
| | | |
Item 4. | Mine Safety Disclosures | | 19 |
| | | |
Item 5. | Other Information | | 19 |
| | | |
Item 6. | Exhibits | | 19 |
| | June 30, | | December 31, | | ||
| | 2013 | | 2012 | | ||
| | (Unaudited) | | | | ||
| | | | | | | |
CURRENT ASSETS: | | | | | | | |
Cash and cash equivalents | | $ | 4,152,665 | | $ | 3,834,097 | |
Short-term investments | | | 2,138,406 | | | 2,135,709 | |
Trade accounts receivable (net of reserve for doubtful accounts of $4,000 in 2013 and 2012) | | | 467,160 | | | 375,090 | |
Income taxes receivable | | | 41,400 | | | 73,069 | |
Crude oil inventory | | | 83,582 | | | 82,180 | |
Prepaid expenses and other assets | | | 117,566 | | | 257,370 | |
Deferred Income taxes | | | 264,400 | | | 264,400 | |
| | | | | | | |
TOTAL CURRENT ASSETS | | | 7,265,179 | | | 7,021,915 | |
| | | | | | | |
PROPERTY AND EQUIPMENT, at cost: | | | | | | | |
| | | | | | | |
Oil and gas properties and equipment (successful efforts method) | | | 20,063,740 | | | 20,007,453 | |
Capitalized asset retirement costs | | | 425,978 | | | 425,978 | |
Drilling and operating equipment | | | 2,058,744 | | | 1,966,750 | |
Land, buildings and improvements | | | 1,098,918 | | | 1,098,918 | |
Automotive, office and other property and equipment | | | 1,202,544 | | | 1,202,544 | |
| | | 24,849,924 | | | 24,701,643 | |
Less - accumulated depletion, depreciation, amortization and valuation allowances | | | (21,215,120) | | | (20,953,324) | |
| | | | | | | |
TOTAL PROPERTY AND EQUIPMENT | | | 3,634,804 | | | 3,748,319 | |
| | | | | | | |
INVESTMENTS AND OTHER ASSETS | | | | | | | |
Long-term investments | | | 1,116,493 | | | 1,101,526 | |
Deferred income taxes | | | 522,500 | | | 621,800 | |
Deposits | | | 250,000 | | | 250,000 | |
Other assets | | | 17,380 | | | 17,380 | |
| | | | | | | |
TOTAL INVESTMENTS OTHER ASSETS | | | 1,906,373 | | | 1,990,706 | |
| | | | | | | |
TOTAL ASSETS | | $ | 12,806,356 | | $ | 12,760,940 | |
| | June 30, | | December 31, | | ||
| | 2013 | | 2012 | | ||
| | (Unaudited) | | | | ||
CURRENT LIABILITIES: | | | | | | | |
Accounts payable | | $ | 177,346 | | $ | 226,759 | |
Accrued professional fees | | | 84,604 | | | 120,000 | |
Accrued taxes, other than income taxes | | | 0 | | | 70,407 | |
Accrued payroll and related costs | | | 57,446 | | | 58,954 | |
Accrued royalties payable | | | 226,500 | | | 204,509 | |
Accrued insurance | | | 13,197 | | | 94,116 | |
| | | | | | | |
TOTAL CURRENT LIABILITIES | | | 559,093 | | | 774,745 | |
| | | | | | | |
LIABILITY FOR ASSET RETIREMENT OBLIGATIONS | | | 1,346,172 | | | 1,327,861 | |
| | | | | | | |
TOTAL LIABILITES | | | 1,905,265 | | | 2,102,606 | |
| | | | | | | |
COMMITMENTS AND CONTINGENCIES (Note 3) | | | | | | | |
| | | | | | | |
SHAREHOLDERS' EQUITY: | | | | | | | |
Preferred stock, no par value Authorized - 10,000,000 shares Issued and outstanding none | | | 0 | | | 0 | |
Common stock, no par value Authorized - 50,000,000 shares Issued and outstanding - 4,688,085 shares | | | 1,682,971 | | | 1,682,971 | |
Retained earnings | | | 9,218,120 | | | 8,975,363 | |
| | | | | | | |
TOTAL SHAREHOLDERS’ EQUITY | | | 10,901,091 | | | 10,658,334 | |
| | | | | | | |
TOTAL LIABILITES AND SHAREHOLDERS’ EQUITY | | $ | 12,806,356 | | $ | 12,760,940 | |
| | Three months ended June 30, | |||||
| | 2013 | | 2012 | | ||
REVENUES: | | | | | | | |
Oil and gas sales | | $ | 1,154,409 | | $ | 1,340,314 | |
| | | | | | | |
COSTS AND EXPENSES: | | | | | | | |
Operating expenses | | | 500,043 | | | 459,798 | |
General and administrative | | | 234,862 | | | 228,878 | |
Taxes, other than income and payroll taxes | | | 37,158 | | | 36,960 | |
Provision for depletion, depreciation, and amortization | | | 148,817 | | | 186,738 | |
Accretion expense | | | 7,932 | | | 5,730 | |
Other costs and expenses | | | 52,973 | | | 54,669 | |
| | | 981,785 | | | 972,773 | |
| | | | | | | |
OPERATING INCOME | | | 172,624 | | | 367,541 | |
| | | | | | | |
OTHER INCOME (EXPENSE): | | | | | | | |
Interest income | | | 10,004 | | | 10,170 | |
Other income | | | 0 | | | 250 | |
Interest expense | | | 0 | | | (290) | |
| | | 10,004 | | | 10,130 | |
| | | | | | | |
INCOME BEFORE INCOME TAX PROVISION | | | 182,628 | | | 377,671 | |
Income tax provision | | | | | | | |
Current | | | 9,357 | | | 34,600 | |
Deferred | | | 43,200 | | | 54,500 | |
| | | 52,557 | | | 89,100 | |
| | | | | | | |
NET INCOME | | $ | 130,071 | | $ | 288,571 | |
| | | | | | | |
BASIC INCOME PER COMMON SHARE | | $ | 0.03 | | $ | 0.06 | |
| | | | | | | |
DILUTED INCOME PER COMMON SHARE | | $ | 0.03 | | $ | 0.06 | |
| | | | | | | |
Weighted average number of common shares outstanding | | | 4,688,085 | | | 4,683,853 | |
| | | | | | | |
Diluted average number of common shares outstanding | | | 4,688,085 | | | 4,686,827 | |
| | Six months ended June 30, | |||||
| | 2013 | | 2012 | | ||
REVENUES: | | | | | | | |
Oil and gas sales | | $ | 2,162,212 | | $ | 2,709,372 | |
| | | | | | | |
COSTS AND EXPENSES: | | | | | | | |
Operating expenses | | | 934,481 | | | 889,739 | |
General and administrative | | | 457,003 | | | 439,894 | |
Taxes, other than income and payroll taxes | | | 67,555 | | | 84,381 | |
Provision for depletion, depreciation, and amortization | | | 261,796 | | | 367,894 | |
Accretion expense | | | 18,311 | | | 18,817 | |
Other costs and expenses | | | 86,198 | | | 84,474 | |
| | | 1,825,344 | | | 1,885,199 | |
| | | | | | | |
OPERATING INCOME | | | 336,868 | | | 824,173 | |
| | | | | | | |
OTHER INCOME (EXPENSE): | | | | | | | |
Interest income | | | 20,315 | | | 20,860 | |
Other income | | | 0 | | | 250 | |
Interest expense | | | 0 | | | (716) | |
| | | 20,315 | | | 20,394 | |
| | | | | | | |
INCOME BEFORE INCOME TAX PROVISION | | | 357,183 | | | 844,567 | |
Income tax provision | | | | | | | |
Current | | | 15,126 | | | 83,000 | |
Deferred | | | 99,300 | | | 100,900 | |
| | | 114,426 | | | 183,900 | |
| | | | | | | |
NET INCOME | | $ | 242,757 | | $ | 660,667 | |
| | | | | | | |
BASIC INCOME PER COMMON SHARE | | $ | 0.05 | | $ | 0.14 | |
| | | | | | | |
DILUTED INCOME PER COMMON SHARE | | $ | 0.05 | | $ | 0.14 | |
| | | | | | | |
Weighted average number of common shares outstanding | | | 4,688,085 | | | 4,683,853 | |
| | | | | | | |
Diluted average number of common shares outstanding | | | 4,688,085 | | | 4,686,929 | |
| | Six months ended June 30, | | ||||
| | 2013 | | 2012 | | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | |
Net income | | $ | 242,757 | | $ | 660,667 | |
| | | | | | | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | |
| | | | | | | |
Provision for depletion, depreciation, and amortization | | | 261,796 | | | 367,894 | |
Accretion expense | | | 18,311 | | | 18,817 | |
Deferred income taxes | | | 99,300 | | | 100,900 | |
Asset retirement obligations | | | 0 | | | 8,096 | |
| | | | | | | |
Changes in operating assets and liabilities: | | | | | | | |
(Increase) decrease in trade accounts and income taxes receivable | | | (60,401) | | | 190,815 | |
(Increase) decrease in crude oil inventories | | | (1,402) | | | 1,988 | |
Decrease in prepaid expenses | | | 139,804 | | | 142,494 | |
(Decrease) in accounts payable and accrued liabilities | | | (215,652) | | | (212,532) | |
| | | | | | | |
Net cash provided by operating activities | | | 484,513 | | | 1,279,139 | |
| | Six months ended June 30, | | ||||
| | 2013 | | 2012 | | ||
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | |
| | | | | | | |
Capital expenditures | | $ | (148,281) | | $ | (777,916) | |
(Increase) in short-term investments | | | (2,697) | | | (4,264) | |
(Increase) in long-term investments | | | (14,967) | | | (14,327) | |
| | | | | | | |
Net cash used in investing activities | | | (165,945) | | | (796,507) | |
| | | | | | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | |
| | | | | | | |
Principal payments on long-term debt | | | 0 | | | (32,285) | |
| | | | | | | |
Net cash used in financing activities | | | 0 | | | (32,285) | |
| | | | | | | |
Net increase in cash and cash equivalents | | | 318,568 | | | 450,347 | |
| | | | | | | |
Cash and cash equivalents at beginning of period | | | 3,834,097 | | | 2,762,676 | |
| | | | | | | |
Cash and cash equivalents at end of period | | $ | 4,152,665 | | $ | 3,213,023 | |
| | | | | | | |
SUPPLEMENTAL CASH FLOW INFORMATION: | | | | | | | |
| | | | | | | |
Cash paid during the six months for interest | | $ | 0 | | $ | 716 | |
| | | | | | | |
Cash paid during the six months for income taxes | | $ | 800 | | $ | 85,500 | |
| | Federal | | State | | Total | | |||
Current tax provision | | $ | 12,726 | | $ | 2,400 | | $ | 15,126 | |
Deferred tax provision | | | 77,200 | | | 22,100 | | | 99,300 | |
| | | | | | | | | | |
| | $ | 89,926 | | $ | 24,500 | | $ | 114,426 | |
| | Federal | | State | | Total | | |||
Current tax provision | | $ | 71,000 | | $ | 12,000 | | $ | 83,000 | |
Deferred tax provision | | | 78,500 | | | 22,400 | | | 100,900 | |
| | | | | | | | | | |
| | $ | 149,500 | | $ | 34,400 | | $ | 183,900 | |
| | Federal | | State | | Total | | |||
Current tax provision | | $ | 7,957 | | $ | 1,400 | | $ | 9,357 | |
Deferred tax provision | | | 33,500 | | | 9,700 | | | 43,200 | |
| | | | | | | | | | |
| | $ | 41,457 | | $ | 11,100 | | $ | 52,557 | |
| | Federal | | State | | Total | | |||
Current tax provision | | $ | 29,500 | | $ | 5,100 | | $ | 34,600 | |
Deferred tax provision | | | 42,350 | | | 12,150 | | | 54,500 | |
| | | | | | | | | | |
| | $ | 71,850 | | $ | 17,250 | | $ | 89,100 | |
(Unaudited) | | Number of Options | | Weighted-Average Exercise Price | | ||
| | | | | | | |
Outstanding, December 31, 2012 | | | 10,000 | | $ | 5.40 | |
Granted | | | 0 | | | 0 | |
Exercised | | | 0 | | | 0 | |
Cancelled | | | 0 | | | 0 | |
Outstanding, June 30, 2013 | | | 10,000 | | $ | 5.40 | |
Grant Date | | | June 2, 2011 | |
Strike Price | | $ | 5.40 | |
Expiration Date | | | June 1, 2016 | |
Options Remaining | | | 10,000 | |
Proceeds if Exercised | | $ | 54,000 | |
Call Feature | | | None | |
Balance at December 31, 2012 | | $ | 1,327,861 | |
Incurred during the period | | | 0 | |
Additions for new wells | | | 0 | |
Accretion expense | | | 18,311 | |
Balance at June 30, 2013 | | $ | 1,346,172 | |
* | Pursuant to Rule 406T of Regulation S-T, the information in Exhibit 101 (a) is “furnished” and is not deemed to be “filed” or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, (b) is deemed not to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and (c) is not otherwise subject to liability under those sections. |
| PYRAMID OIL COMPANY | |
| (registrant) | |
| | |
Dated: August 14, 2013 | JOHN H. ALEXANDER | |
| John H. Alexander | |
| President | |
| | |
Dated: August 14, 2013 | LEE G. CHRISTIANSON | |
| Lee G. Christianson | |
| Chief Financial Officer | |
| By: | JOHN H. ALEXANDER |
| | John H. Alexander |
| | President and |
| | Chief Executive Officer |
| By: | LEE G. CHRISTIANSON |
| | Lee G. Christianson |
| | Chief Financial Officer |
| JOHN H. ALEXANDER | |
| John H. Alexander | |
| Chief Executive Officer | |
| LEE G. CHRISTIANSON | |
| Lee G. Christianson | |
| Chief Financial Officer | |
Income Tax Provision (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | Income tax provision for the six months ended June 30, 2013 was calculated as follows:
Income tax provision for the six months June 30, 2012 was calculated as follows:
Income tax provision for the three months ended June 30, 2013 was calculated as follows:
Income tax provision for the three months ended June 30, 2012 was calculated as follows:
|
STATEMENTS OF OPERATIONS (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
REVENUES: | ||||
Oil and gas sales | $ 1,154,409 | $ 1,340,314 | $ 2,162,212 | $ 2,709,372 |
COSTS AND EXPENSES: | ||||
Operating expenses | 500,043 | 459,798 | 934,481 | 889,739 |
General and administrative | 234,862 | 228,878 | 457,003 | 439,894 |
Taxes, other than income and payroll taxes | 37,158 | 36,960 | 67,555 | 84,381 |
Provision for depletion, depreciation, and amortization | 148,817 | 186,738 | 261,796 | 367,894 |
Accretion expense | 7,932 | 5,730 | 18,311 | 18,817 |
Other costs and expenses | 52,973 | 54,669 | 86,198 | 84,474 |
Operating Expenses | 981,785 | 972,773 | 1,825,344 | 1,885,199 |
OPERATING INCOME | 172,624 | 367,541 | 336,868 | 824,173 |
OTHER INCOME (EXPENSE): | ||||
Interest income | 10,004 | 10,170 | 20,315 | 20,860 |
Other income | 0 | 250 | 0 | 250 |
Interest expense | 0 | (290) | 0 | (716) |
Nonoperating Income (Expense) | 10,004 | 10,130 | 20,315 | 20,394 |
INCOME BEFORE INCOME TAX PROVISION | 182,628 | 377,671 | 357,183 | 844,567 |
Income tax provision | ||||
Current | 9,357 | 34,600 | 15,126 | 83,000 |
Deferred | 43,200 | 54,500 | 99,300 | 100,900 |
Income Tax Expense (Benefit) | 52,557 | 89,100 | 114,426 | 183,900 |
NET INCOME | $ 130,071 | $ 288,571 | $ 242,757 | $ 660,667 |
BASIC INCOME PER COMMON SHARE (in dollars per share) | $ 0.03 | $ 0.06 | $ 0.05 | $ 0.14 |
DILUTED INCOME PER COMMON SHARE (in dollars per share) | $ 0.03 | $ 0.06 | $ 0.05 | $ 0.14 |
Weighted average number of common shares outstanding (in shares) | 4,688,085 | 4,683,853 | 4,688,085 | 4,683,853 |
Diluted average number of common shares outstanding (in shares) | 4,688,085 | 4,686,827 | 4,688,085 | 4,686,929 |
Incentive and Retention Plan
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | 5. Incentive and Retention Plan On January 9, 2007, the Company's Board of Directors adopted an Incentive and Retention Plan pursuant to which the Company's officers and other employees selected by the Company's Compensation Committee are entitled to receive payments if they are employed by the Company as of the date of a 'Corporate Transaction,' as defined in the Incentive and Retention Plan. A 'Corporate Transaction' includes certain mergers involving the Company, sales of Company assets, and other changes in the control of the Company, as specified in the Incentive and Retention Plan. In general, the amount that is payable to each plan participant will equal the number of plan units that have been granted to him or her, multiplied by the increase in the value of the Company between January 9, 2007 and the date of a Corporate Transaction. There has been no Corporate Transaction since the adoption of the Incentive and Retention Plan. |
Related-Party Transaction (Details Textual) (USD $)
|
6 Months Ended | |
---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Mr Alexander [Member]
|
||
Minority Interest Ownership Percentage By Parent | 33.00% | |
Oil and Gas Properties [Member]
|
||
Royalty Expense | $ 81,000 | $ 137,000 |
Stock Based Compensation (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
|
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Stock Based Compensation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | The following table summarizes the option activity for the six months ended June 30, 2013:
|
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Schedule Of Options Issued and Outstanding [Table Text Block] | The following summarizes the options issued, outstanding and exercisable as of June 30, 2013:
|
Stock Based Compensation (Details Textual) (USD $)
|
Jun. 30, 2013
|
---|---|
Unamortized Stock Based Compensation | $ 0 |
Stock Based Compensation (Details 1) (USD $)
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Grant Date | Jun. 02, 2011 |
Strike Price (in dollars per share) | $ 5.40 |
Expiration Date | Jun. 01, 2016 |
Options Remaining | 10,000 |
Proceeds if Exercised | 54,000 |
Call Feature | None |
Stock Based Compensation (Details) (USD $)
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Number of Options, Outstanding, December 31, 2012 | 10,000 |
Number of Options, Granted | 0 |
Number of Options, Exercised | 0 |
Number of Options, Cancelled | 0 |
Number of Options, Outstanding, June 30, 2013 | 10,000 |
Weighted-Average Exercise Price, Outstanding, December 31, 2012 | $ 5.40 |
Weighted-Average Exercise Price, Granted | $ 0 |
Weighted-Average Exercise Price, Exercised | $ 0 |
Weighted-Average Exercise Price, Cancelled | $ 0 |
Weighted-Average Exercise Price, Outstanding, June 30, 2013 | $ 5.40 |
Summary of Significant Accounting Policies
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
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Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | 1. Summary of Significant Accounting Policies The financial statements include the accounts of Pyramid Oil Company (the “Company”). Such financial statements included herein have been prepared by the Company, without an audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. A summary of the Company's significant accounting policies is contained in its December 31, 2012 Form 10-K. The financial data presented herein should be read in conjunction with the Company's December 31, 2012 financial statements and notes thereto, contained in the Company's Form 10-K. In the opinion of the Company, the unaudited financial statements, contained herein, include all adjustments necessary to present fairly the Company's financial position as of June 30, 2013 and the results of its operations and its cash flows for the three and six month periods ended June 30, 2013 and 2012. The results of operations for any interim period are not necessarily indicative of the results to be expected for a full year. Income Taxes - When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company files income tax returns in the U.S. federal jurisdiction, California, Texas and New York states. With few exceptions, the Company is no longer subject to U.S. federal tax examination for the years before 2009. State jurisdictions that remain subject to examination range from 2009 to 2012. The Company does not believe there will be any material changes in its unrecognized tax positions over the next 12 months. The Company policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. As of the date of adoption of FASB ASC 740, the Company did not have any accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense recognized during the quarter. Interest associated with unrecognized tax benefits are classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of operations. Income (Loss) per Share - Basic income (loss) per common share is computed by dividing the net income (loss) applicable to common stock by the weighted average number of shares of common stock outstanding during the period. Diluted income (loss) is computed by dividing the net income available to common stockholders by the weighted average number of common shares outstanding for the period plus the weighted average number of dilutive common stock equivalents outstanding for the period. For periods with a net loss, the dilutive common stock equivalents are excluded from the diluted income (loss) calculation. Valuation Allowances - The Company records valuation allowances for its oil and gas properties when the undiscounted future net cash flows are less than the net capitalized costs for the property. No valuation allowances were recorded during the first six months of 2013 or 2012. Reclassifications - Certain reclassifications have been made to prior period financial statements to conform to the current year presentation. |
Commitments and Contingencies
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6 Months Ended |
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Jun. 30, 2013
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Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | 3. Commitments and Contingencies In February 2002, the Company entered into an employment agreement with John H. Alexander pursuant to which Mr. Alexander agreed to serve as the Company's Vice President. On June 3, 2004, Mr. Alexander was appointed as the Company's President and Chief Executive Officer. The employment agreement was for an initial term of six years, which term automatically renews annually if written notice is not tendered. The agreement was automatically renewed on June 3, 2013. Pursuant to the employment agreement, the Company may terminate Mr. Alexander's employment with or without cause at any time before its term expires upon providing written notice. In the event the Company terminates Mr. Alexander's employment without cause, Mr. Alexander would be entitled to receive a severance amount equal to his annual base salary and benefits for the balance of the term of his employment agreement. In the event of termination by reason of Mr. Alexander's death or permanent disability, his legal representative will be entitled to receive his annual salary and benefits for the remaining term of his employment agreement. In the event of, or termination following, a change in control of the Company, as defined in the agreement, Mr. Alexander would be entitled to receive his annual salary and benefits for the remainder of the term of his agreement. In the event that Mr. Alexander is terminated the Company would incur approximately $930,000 in costs. The Company has been notified by the United States Environmental Protection Agency (EPA) of a final settlement offer to settle its potential liability as a generator of waste containing hazardous substances that was disposed of at a waste disposal site in Santa Barbara County. The Company has responded to the EPA by indicating that the waste contained petroleum products that fall within the exception to the definition of hazardous substances for petroleum-related substances of the pertinent EPA regulations. Management has concluded that under both Federal and State regulations no reasonable basis exists for any valid claim against the Company. As such, the likelihood of any settlement is deemed remote. There has been not further communication form the EPA on this matter since September 25, 2009. |
Related-Party Transaction
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6 Months Ended |
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Jun. 30, 2013
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Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | 6. Related-party Transaction Effective January 1, 1990, John H. Alexander, an officer and director of the Company participated with a group of investors that acquired the mineral and fee interest on one of the Company's oil and gas leases (Santa Fe Energy lease) in the Carneros Creek field after the Company declined to participate. The thirty-three percent interest owned by Mr. Alexander represents a minority interest in the investor group. Royalties on oil and gas production from this property paid to the investor group approximated $81,000 during the six months ended June 30, 2013 and $137,000 during the six months ended June 30, 2012. |
Income Tax Provision
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Jun. 30, 2013
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Text Block] | 4. Income Tax Provision The Company recognized an income tax provision of $114,426 for the six months ended June 30, 2013 compared to an income tax provision of $183,900 for the same period in 2012. Income tax provision for the six months ended June 30, 2013 was calculated as follows:
Income tax provision for the six months June 30, 2012 was calculated as follows:
Income tax provision for the three months ended June 30, 2013 was calculated as follows:
Income tax provision for the three months ended June 30, 2012 was calculated as follows:
Deferred income taxes are recognized using the asset and liability method by applying income tax rates to cumulative temporary differences based on when and how they are expected to affect the tax returns. Deferred tax assets and liabilities are adjusted for income tax rate changes. Deferred income tax assets have been offset by a valuation allowance of $1,719,000 as of June 30, 2013 and December 31, 2012. Management reviews deferred income taxes regularly throughout the year, and accordingly makes any necessary adjustments to properly reflect the valuation allowance based upon current financial trends and projected results. |
Fair Value (Details Textual) (USD $)
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6 Months Ended |
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Jun. 30, 2013
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Accretion Expense | $ 18,311 |