Investment in Oil and Gas Working Interest - Related Party

9 Months Ended

Mar. 31, 2014

Notes to Financial Statements

Note 6 - Investment in Oil and Gas Working Interest - Related Party

The Company owns an interest in two oil and gas leases located in Southeast Texas. The Company is exploring various opportunities to realize value from these interests, including potential farmout or sale. The Company intends to adopt the full cost method of accounting for oil and gas properties in the event that the Company develops their interests in these leases. As of March 31, 2014, the Company does not have any proved reserves as defined under FASB ASC 932-235-50 (formerly SFAS No. 69) and has not incurred any costs associated with the development of these oil and gas properties and had not received any oil and gas revenue from these leases.

The Company also holds an 18% gross royalty interest in the Yasin Concession in Pakistan. As of March 31, 2014 and June 30, 2013, the Company has earned $3,010,846 and $2,067,533, respectively, of oil and gas royalties on which they had received payments of $30,390, resulting in oil and gas receivables of $2,980,456 and 2,037,143 as of March 31, 2014 and June 30, 2013, respectively. At March 31, 2014, the Company recorded an allowance against the receivable of $2,980,456 (see Note 7).The concession was acquired in 2003 through the sale of a wholly owned subsidiary of the Company. Revenues to be derived from this interest are overriding in nature and there are no future financial obligations or commitments required of the Company to secure this royalty interest.