10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the quarterly period ended September 30, 2012; or

[_] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the transition period from _____________ to _____________.

Commission File Number 0-18956

American Natural Energy Corporation
(Exact name of small business issuer as specified in its charter)

Oklahoma	73-1605215
(State or other jurisdiction of	(I.R.S employer
incorporation of organization)	identification no.)
One Warren Place, 6100 South Yale, Suite 2010, Tulsa, Oklahoma	74136
(Address of principal executive offices)	(zip code)

(918) 481-1440
(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X]        No [_]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [_]       No [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer [_]	Accelerated filer [_]
Non-accelerated filer [_]	Smaller Reporting Company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [_]        No [X]

APPLICABLE ONLY TO CORPORATE ISSUERS:

As of November 14, 2012, 26,405,085 shares of the Registrant's Common Stock, $0.001 par value, were outstanding.

1

AMERICAN NATURAL ENERGY CORPORATION

QUARTERLY REPORT ON FORM 10-Q

INDEX

PART I – FINANCIAL INFORMATION
		Page
Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets – September 30, 2012 and December 31, 2011	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss Three Months and Nine Months Ended September 30, 2012 and September 30, 2011	4
	Condensed Consolidated Statements of Cash Flows Nine Months Ended September 30, 2012 and September 30, 2011	5
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 4.	Controls and Procedures	23
PART II – OTHER INFORMATION
Item 6.	Exhibits	24

2

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements
AMERICAN NATURAL ENERGY CORPORATION
Condensed Consolidated Balance Sheets (Unaudited)

	September 30, 2012		December 31, 2011
	$		$
ASSETS
Current assets:
Cash and cash equivalents	336,666		-
Restricted cash	497,000		-
Accounts receivable – joint interest billing	91,929		22,104
Accounts receivable – oil and gas sales	131,200		31,963
Prepaid expenses and other	104,730		84,141
Oil inventory	29,458		26,484
Deferred financing costs	104,282		-
Total current assets	1,295,265		164,692
Proved oil and natural gas properties, full cost method of accounting, net of accumulated depletion, depreciation, amortization and impairment of $21,768,281 and $21,542,440	18,197,387		15,932,509
Unproved oil and natural gas properties	675,201		571,796
Equipment and other fixed assets, net of accumulated depreciation of $1,149,718 and $1,131,053	28,513		47,178
Other deferred costs	-		105,000
Total assets	20,196,366		16,821,175
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities	3,665,303		2,276,534
Revenue payable	3,521,711		3,460,249
Accounts payable – related parties	-		49,936
Accrued interest	56,655		58,510
Insurance note payable	58,485		48,163
Notes payable – related parties net of discounts of $19,455 and $0 respectively	888,678		685,911
Note payable, net of discounts of $134,595 and $0 respectively (Note 4)	1,527,893		952,527
Taxes due on dissolution of subsidiary	40,252		45,252
Total current liabilities	9,758,977		7,577,082
Debenture payable, net of discounts of $834,420 and $0 respectively	1,165,580		-
Asset retirement obligation	2,344,790		2,208,867
Total liabilities	13,269,347		9,785,949
Commitments and contingencies
Stockholders' equity :
Common stock (Note 6) Authorized – 250,000,000 shares with par value of $0.001 – 26,405,085 and 13,431,954 shares issued and outstanding respectively	26,405		13,432
Additional paid-in capital	25,445,964		23,451,773
Accumulated deficit, since January 1, 2002 (in conjunction with the quasi- Reorganization stated capital was reduced by an accumulated deficit of $2,015,495)	(22,794,669	)	(20,228,381	)
Accumulated other comprehensive income	4,249,319		3,798,402
Total stockholders' equity	6,927,019		7,035,226
Total liabilities and stockholders' equity	20,196,366		16,821,175

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

AMERICAN NATURAL ENERGY CORPORATION

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

For the three-month and nine-month periods ended September 30, 2012 and 2011

	Three months ended September 30,				Nine months ended September 30,
	2012		2011		2012		2011
	$		$		$		$
Revenues:
Oil and gas sales	504,029		595,185		1,509,027		1,886,765
Operations income	11,923		11,922		38,122		37,964
	515,952		607,107		1,547,149		1,924,729
Expenses:
Lease operating expense	280,962		238,179		791,598		608,993
Production taxes	29,371		21,134		86,373		57,313
General and administrative	421,987		365,561		1,580,242		1,192,388
Foreign exchange (gain) loss	546,098		(696,929	)	484,438		(395,900	)
Interest and financing costs	368,507		59,428		847,319		174,743
Depletion, depreciation and amortization – oil and gas properties	81,839		95,949		225,841		293,878
Accretion of asset retirement obligation	46,588		42,866		135,923		141,316
Depreciation and amortization – other assets	4,881		6,897		18,665		20,696
Total expenses	1,780,233		133,085		4,170,399		2,093,427
Other income
Gain on settlement of debt	56,962		-		56,962		-
Net income (loss)	(1,207,319	)	474,022		(2,566,288	)	(168,698	)
Other comprehensive income– net of tax:
Foreign exchange translation	512,577		(696,929	)	450,917		(395,900	)
Other comprehensive income ( loss)	512,577		(696,929	)	450,917		(395,900	)
Comprehensive loss	(694,742	)	(222,907	)	(2,115,371	)	(564,598	)
Basic and diluted loss per share	(0.05	)	(0.04	)	(0.12	)	(0.01	)
Weighted average number of shares outstanding
Basic	25,949,599		13,431,954		21,033,945		13,431,954
Diluted	25,949,599		13,431,954		21,033,945		13,431,954

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

AMERICAN NATURAL ENERGY CORPORATION

Condensed Consolidated Statements of Cash Flows (Unaudited)

For the nine-month periods ended September 30, 2012 and 2011

	Nine months ended September 30,
	2012		2011
	$		$
Cash flows from operating activities:
Net loss	(2,566,288	)	(168,698	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation, depletion and amortization	244,506		314,574
Accretion of asset retirement obligation	135,923		141,316
Foreign exchange (gain) loss	484,438		(395,900	)
Noncash compensation expense	397,787		274,787
Amortization of deferred financing costs	287,040		-
Amortization of debt discount	285,403		-
Gain on settlement of debt	(56,962	)	-
Changes in components of working capital:
Accounts receivable	(169,062	)	(77,004	)
Oil inventory	(3,070	)	(5,705	)
Prepaid expenses and other current assets	(20,589	)	(13,138	)
Accounts payable, accrued liabilities and interest	(152,254	)	88,289
Net cash provided by (used in) operating activities	(1,133,128	)	158,521
Cash flows from investing activities:
Purchase and development of oil and gas properties	(1,183,008	)	(131,872	)
Net cash used in investing activities	(1,183,008	)	(131,872	)
Cash flows from financing activities:
Payment of notes payable	(1,326,047	)	(371,448	)
Payment of notes payable-related party	(27,778	)	(181,062	)
Proceeds from issuance of notes payable	1,451,627		125,869
Proceeds from issuance of notes payable- related party	2,250,000		500,000
Shares issued for private placement	420,000		-
Payment of deferred financing costs	(115,000	)	(85,000	)
Net cash provided by (used in) financing activities	2,652,802		(11,641	)
Increase in cash and cash equivalents	336,666		15,008
Cash beginning of period	-		8,658
Cash end of period	336,666		23,666

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

AMERICAN NATURAL ENERGY CORPORATION

Condensed Consolidated Statements of Cash Flows (Unaudited) (continued)

For the nine-month periods ended September 30, 2012 and 2011

	Nine months ended September 30,
	2012	2011
	$	$
Supplemental disclosures:
Interest paid, net of capitalized interest	267,907	129,398
Taxes paid	5,000	20,000
Non cash investing and financing activities:
Debt issued for restricted cash	497,000	-
Purchase of working interest through issuance of a note payable (Note 4)	-	226,847
Purchase of oil and gas properties in accounts payable	1,450,635
Deferred financing cost due to warrants issued	68,046	-
Debt discount due to liquidation rights transferred	39,619	-
Deferred financing cost due to common shares issued	110,776	-
Debt discount due to common shares issued	129,240	-
Debt discount on fees related to TCA debt	100,000	-
Related party debt discount due to conversion option and warrants issued	881,314	-

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6

American Natural Energy Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)

September 30, 2012 and 2011

1	Significant accounting policies
	The accounting policies and methods followed in preparing these unaudited condensed consolidated financial statements are those used by American Natural Energy Corporation (the “Company”) as described in Note 1 of the notes to consolidated financial statements included in the Annual Report on Form 10-K. The unaudited condensed consolidated financial statements for the nine-month periods ended September 30, 2012 and 2011 have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission and do not conform in all respects to the disclosure and information that is required for annual consolidated financial statements. The year-end condensed consolidated balance sheet data was derived from audited consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. These interim condensed consolidated financial statements should be read in conjunction with the most recent annual consolidated financial statements of the Company.
	In the opinion of management, all adjustments, all of which are of a normal recurring nature, considered necessary for fair statement have been included in these interim condensed consolidated financial statements. Operating results for the nine-month period ended September 30, 2012 are not indicative of the results that may be expected for the full year ending December 31, 2012.
	Reclassification of Prior Period Statements
	Certain reclassifications of prior period consolidated financial statements balances have been made to conform to current reporting practices.
	Stock-based compensation
	As discussed below in Note 7, the Company has a stock-based compensation plan, and effective January 1, 2006, accounts for stock options granted to employees under this plan in accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 718, Share-Based Payment ("ASC 718"). Under the provisions of ASC 718, share-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the grantee’s requisite service period (generally the vesting period of the equity grant).
2	Earnings (loss) per share
	Basic earnings (loss) per share is computed by dividing net income or loss (the numerator) by the weighted average number of shares outstanding during the period (the denominator). The diluted earnings (loss) per share is determined using the treasury method of shares outstanding as of September 30, 2012. This includes the net of new shares potentially created by unexercised in-the- money options. The method assumes that the proceeds that a company receives from in-the-money options exercised are used to repurchase common shares in the market. The Company had 2,505,000 vested and unexercised employee stock options and 20,813,391 vested and unexercised warrants outstanding as of September 30, 2012, with the outstanding employee stock options and warrants excluded from the calculation of diluted earnings per share as they were anti-dilutive.

7

American Natural Energy Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)

September 30, 2012 and 2011

3	Going Concern, Liquidity and Capital Resources
	The Company currently has a severe shortage of working capital and funds to pay its liabilities. The Company has no current borrowing capacity with any lender. The Company incurred a net loss of $2,566,288 for the nine months ended September 30, 2012. The Company has a working capital deficit of $8,463,712 and an accumulated deficit of $22,794,669 at September 30, 2012 which leads to substantial doubt concerning the ability of the Company to meet its obligations as they come due. The Company also has a need for substantial funds to develop its oil and gas properties and repay borrowings as well as to meet its other current liabilities.
	The accompanying consolidated financial statements have been prepared on a going concern basis which contemplates continuity of operations, realization of assets and liquidation of liabilities in the ordinary course of business. As a result of the losses incurred and current negative working capital, there is no assurance that the carrying amounts of assets will be realized or that liabilities will be liquidated or settled for the amounts recorded. The ability of the Company to continue as a going concern is dependent upon adequate sources of capital and the Company’s ability to sustain positive results of operations and cash flows sufficient to continue to explore for and develop its oil and gas reserves and pay its obligations.
	Management’s strategy has been to obtain additional financing or industry partners. It is management’s intention to raise additional debt or equity financing to fund its operations and capital expenditures or to enter into another transaction in order to maximize shareholder value. Failure to obtain additional financing can be expected to adversely affect the Company’s ability to pay its obligations, further the development of its properties, grow revenues, oil and gas reserves and achieve and maintain a significant level of revenues, cash flows, and profitability. There can be no assurance that the Company will obtain this additional financing at the time required, at rates that are favorable to the Company, or at all. Further, any additional equity financing that is obtained may result in material dilution to the current holders of common stock.
4	Notes Payable
	Notes payable and long-term debt as of September 30, 2012 and December 31, 2011 consisted of the following:

8

American Natural Energy Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)

September 30, 2012 and 2011

	September 30, 2012		December 31, 2011
	$		$
Note payable – Citizens Bank of Oklahoma	255,921		422,465
Note payable – TCA Global Credit Master Fund	1,000,000		-
Discount on TCA Global Credit Master Fund note	(134,595	)	-
Note payable – Dune Energy (Note 5)	-		157,017
Note payable – Leede Financial	406,567		373,045
Total third-party notes payable and long-term debt	1,527,893		952,527
Debenture payable – Palo Verde (Note 5)	2,000,000		-
Discount on Palo Verde debt	(834,420	)	-
Note payable – TPC Energy	414,183		164,183
Discount on TPC Energy Note	(19,455	)	-
Note payable – Mike Paulk	472,222		500,000
Note payable - Other	21,728		21,728
Total related party notes payable and long-term debt	2,054,258		685,911
Total notes payable and long-term debt	3,582,151		1,638,438
Less: Current portion	(2,416,571	)	(1,638,438	)
Total notes payable and long-term debt, net of current portion	1,165,580		-

On September 10, 2009, the Company entered into a $500,000 unsecured short-term note with interest at the rate of 6% per annum with Citizens Bank of Oklahoma. On January 31, 2012, the loan was modified with a new interest rate of 12% and a maturity date of July 31, 2012. On July 31, 2012, the loan was further modified to extend the maturity date to September 30, 2013 All accrued interest is payable monthly. Proceeds of $475,500 from the note were paid to the Company and the remaining proceeds of $24,500 were used to pay off a prior note with Citizens Bank of Oklahoma. Net payments of $166,543 were made during the nine months ended September 30, 2012. The Company evaluated the application of ASC 470-50 and ASC 470-60 and concluded that the revised terms constituted a debt modification, rather than a debt extinguishment or a troubled debt restructuring.

On March 31, 2011, with an effective date of January 1, 2011, the Company purchased the working interests from TPC Energy for $300,000 through the issuance of a note payable in the same amount. Principal payments of $12,500 and interest at the rate of 10% per annum are due monthly. During the effective date through the closing date of March 31, 2011, revenues of $95,662 were recorded as a purchase price adjustment that lowered the note payable balance to $204,338 and during the year ended December 31, 2011, cash payments totaling $40,155 were also applied to the note which left a remaining balance due of $164,183. During the first quarter of 2012 TPC Energy advanced an additional $250,000 to the Company with repayment of the loan due one year from the date of advancement and with interest payable monthly. In addition to the additional $250,000, the Company assigned 50% of its interest in its share of the Liquidation Agents account distributions to TPC Energy for the life of the note. The rights were valued at $39,619 and were recorded as a discount on the note, which is being amortized over the life of the note using the effective interest method. The TPC note is included in Notes Payable – Related Parties on the balance sheet as of September 30, 2012.

9

American Natural Energy Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)

September 30, 2012 and 2011

On February 17, 2011, the Company entered into a $500,000 note payable with Mike Paulk and Steven Ensz, directors of the Company, with an annual interest rate of 10%. The note, initially due February 15, 2012 has been renewed and extended until February 15, 2013. The Company evaluated the application of ASC 470-50 and ASC 470-60 and concluded that the revised terms constituted a debt modification rather than a debt extinguishment or a troubled debt restructuring. Payments totaling $27,778 have been made as of September 30, 2012.

The Company entered into a financing agreement with TCA Global Credit Master Fund, LP during the first quarter of 2012. Proceeds of the financing are to be used for the drilling and completion of wells included in the Company’s inventory of Proved Undeveloped reserves (“PUD”). The Company has a commitment for a total amount of $3 million, before fees and expenses, through the issuance of a series of $1 million debentures. The debenture is secured by a first priority, perfected security interest and mortgage in oil and gas leases and properties. At no time shall the investor funds exceed 65% of the drilling and completion cost of the PUD’s with the balance provided by the Company’s generated funds.

In January 2012, the first tranche TCA debt of $1 million was issued. The debt is due on December 29, 2012 and is payable monthly with a mandatory redemption fee equal to 10% and interest of 5%. Fees paid in cash and common stocks to TCA Global Credit Master Fund, LP of $195,440 were recorded as a debt discount. As of September 30, 2012 the first tranche TCA debt was paid in full and debt discount was fully amortized.

In connection with the issuance of first tranche TCA debt, the Company paid cash fees and issued shares and warrants to other third parties valued at $273,833. These cash fees, common shares and warrants were recorded as deferred financing costs, which were fully amortized as of September 30, 2012.

In August 2012, the second tranche TCA debt of $1 million was issued. The debt is due on August 31, 2013 and is payable monthly with a mandatory redemption fee equal to 10% and interest of 5%. Out of $1 million debt proceed, $333,333 was used to pay off the remaining principal balance of the first tranche TCA debt, $497,000 was kept in escrow account to pay off two legal settlements, and net proceeds of $111,167 was received by the Company. Fees paid and to be paid in cash totaling $157,500 to TCA Global Credit Master Fund, LP were recorded as a debt discount. As of September 30, 2012, $22,905 of debt discount has been amortized.

10

American Natural Energy Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)

September 30, 2012 and 2011

	In connection with the issuance of second tranche TCA debenture, the Company paid cash fees and issued shares and warrants to other third parties valued at $117,489. These cash fees, common shares and warrants were recorded as deferred financing costs, of which $17,313 have been amortized as of September 30, 2012.
	In December, 2009, the Company entered into a $373,045 unsecured short-term note with Leede Financial with an interest of 12% per annum. The note is payable in Canadian dollars. The maturity date of the note has been extended to December 31, 2012. The Company evaluated the application of ASC 470-50 and ASC470-60 and concluded the revised term constituted a debt modification. As a result of the change in the exchange rates, the debt amount (in US dollars) increased to $406,567 as of September 30, 2012 and the increase of $33,521 was recognized as loss on foreign exchange translation on the statements of operations.
5	Convertible Debentures
	On August 4, 2009 the Company re-purchased and retired $7.895 million, plus $2.1 million accrued and unpaid interest, of its 8% Secured Debentures held by Dune Energy, Inc. (including release of collateral rights), acquired Dune’s interest in producing wells and certain leasehold rights in the Bayou Couba field, resumed operations of the Bayou Couba field, and settled outstanding issues between the companies, which net to $2.1 million payable to Dune. In exchange, the Company assigned a portion of certain deep rights held by the Company valued at $93,000 and paid Dune $1 million at the closing and issued a note payable of $300,000 payable in six consecutive quarterly payments of $50,000 each, with the first installment due and payable 90 days after resuming operations of the field. The first installment was timely paid. The note payable to Dune of $157,000 was settled for $105,000 on August 13, 2012 and a gain on settlement of debt of $52,000 was recorded in the third quarter of 2012.
	On August 13, 2012, the Company entered into a Securities Purchase Agreement with Palo Verde Acquisitions, LLC, pursuant to which the Company sold to Palo Verde (1) a $2,000,000 12% unsecured, convertible Debenture due August 13, 2014 (the "Palo Verde Debenture") and (2) warrants to purchase up to 20,000,000 shares of common stock of the Company at an exercise price of US$0.23 per share and expiring on August 13, 2014 (the "Warrants"). The aggregate consideration paid to the Company by Palo Verde for the Palo Verde Debenture and the Warrants was $2,000,000.
	Interest on the outstanding principal amount of the Palo Verde Debenture will accrue at a rate of 12% per annum, and is payable by the Company on a quarterly basis. At the Company's election, interest may be payable by the Company in shares of common stock of the Company in lieu of cash. The entire principal amount of the Palo Verde Debenture is due on August 13, 2014. The Company may not prepay any portion of the principal amount of the Palo Verde Debenture without the prior written consent of Palo Verde.
	At any time prior to the payment of the Palo Verde Debenture in full, Palo Verde may elect, in its sole discretion, to convert all or part of the principal amount of the Palo Verde Debenture into shares of common stock of the Company at a conversion rate of US$0.10 per share of common stock. Notwithstanding the foregoing, Palo Verde may not convert any principal amount of the Palo Verde Debenture into common shares of the Company if, following such conversion, Palo Verde and its affiliates would own more than 19.9% of the number of shares of common stock of the Company then outstanding (the "Beneficial Ownership Limitation"). The same Beneficial Ownership Limitation applies to the exercise by Palo Verde of any Warrants. The Palo Verde Debenture contains customary adjustment provisions for certain corporate events, such as the payment of stock dividends and stock splits. The Palo Verde Debenture also contains customary events of default.

11

American Natural Energy Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)

September 30, 2012 and 2011

	The Company analyzed the convertible debt and the warrants issued for derivative accounting consideration under ASC 815 “Derivatives and Hedging” and determined that derivative accounting is not applicable.
	The Company further analyzed the convertible debt for a beneficial conversion feature under ASC 470-20 on the date of the note and determined that a beneficial conversion feature exists. The intrinsic value of the beneficial conversion feature was determined to be $140,657 and was recorded as debt discount.
	In addition, the relative fair value of the warrants was measured using the Black-Scholes Option Pricing Model (see Note 7). The relative fair value was determined to be $740,657. Total value of the beneficial conversion feature and the relative fair value of warrants is $881,314, which was recorded as debt discount. As of September 30, 2012, $46,894 of debt discount has been amortized.
	Pursuant to the Palo Verde Purchase Agreement, Palo Verde may purchase from the Company an additional $1,000,000 12% convertible debenture and additional warrants to purchase up to 10,000,000 shares of common stock of the Company at an exercise price of US$0.23 per share (such additional debenture and additional warrants, the "Additional Securities") for a total payment of an additional $1,000,000. Prior to the consummation of any such additional purchase and pursuant to the Palo Verde Purchase Agreement, the Company has agreed to hold an annual stockholders meeting in 2012 to, among other things, submit to the stockholders a proposal to permit Palo Verde to convert the Palo Verde Debenture and exercise the Warrants (and to convert and exercise, respectively, any Additional Securities purchased) without the limitation of the Beneficial Ownership Limitation.
6	Common Stock
	In connection with the financing agreement entered into with TCA Global Credit Master Fund, LP during the first quarter of 2012 the Company paid an Equity Incentive Fee of $150,000 worth of 1,764,706 Restricted Shares of ANEC stock. The shares carry a nine (9) month ratchet whereby either party is obligated to refund (by the Investor) or issue (by the Company) shares to equal the initial value. The relative fair value of the shares of $129,240, in addition to cash fees paid to TCA of $66,200, was recorded as a discount on the note and is being amortized over the life of the note using the effective interest method (see Note 4).
	In connection with the closing of the $1 million first tranche in February 2012, the Company issued finder’s fees consisting of the following: 732,235 shares of common stock of the Corporation, 500,000 warrants to purchase the common stock of the Corporation at an exercise price of $0.10 per share with a contractual term of five years and 96,000 warrants to purchase the common stock of the Corporation at an exercise price of $0.25 per share with a contractual term of five years. The fair values of the shares of $60,776 and the warrants of $50,557 were recorded as deferred financing costs and are being amortized over the life of the note using the effective interest method.

12

American Natural Energy Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)

September 30, 2012 and 2011

	In connection with the closing of the $1 million second tranche in August 2012, the Company issued finder’s fees consisting of the following: 476,190 shares of common stock of the Corporation, 217,391 warrants to purchase the common stock of the Corporation at an exercise price of $0.23 per share with a contractual term of two years. The fair values of the shares of $50,000 and the warrants of $17,489 were recorded as deferred financing costs and are being amortized over the life of the note using the effective interest method.
	On February 17, 2012, the Company issued 1.5 million Restricted Shares each to Mike Paulk and Steven Ensz as compensation for personal guarantees provided in connection with various outstanding financings. The fair value of these shares of $249,000 was recorded as stock based compensation expense in the first quarter of 2012.
	On June 8, 2012, the Company completed a private placement of 7 million shares of common stock issued at $0.06 per share for a total of $420,000.
	In connection with the closing of the $2 million Palo Verde Acquisition LLC convertible debt, the Company issued 20 million warrants (see Note 5). The fair value of the beneficiary conversion feature and relative fair value of the warrants totaling $881,314 were recorded as debt discount and an addition to additional paid-in capital.
7	Stock-based compensation, stock options and warrants
	On January 1, 2006, the Company adopted ASC 718 which requires companies to measure the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. The Company has elected to use the modified prospective application method such that ASC 718 applies to new awards, the unvested portion of existing awards and to awards modified, repurchased or canceled after the effective date. The Company has equity incentive plans that provide for the issuance of stock options. These plans are discussed more fully in the Company’s Form 10-K for the year ended December 31, 2011. All options expire five years from the date of grant. Generally, stock options granted to employees and directors vest 25% upon approval of the grant by the TSX Venture Exchange and 12.5% per quarter thereafter. The Company recognizes stock-based compensation expense over the vesting period of the individual grants.
	For the nine months ended September 30, 2012, the Company recognized compensation costs of approximately $149,000 related to stock options issued September 8, 2009 and November 30, 2010. At September 30, 2012, there was no unrecognized compensation costs related to non-vested stock options granted on September 8, 2009 and November 30, 2010.
	At September 30, 2012 there were 2,505,000 options outstanding and exercisable with a weighted average exercise price of $0.41.The weighted average remaining contractual term for these outstanding and exercisable options at September 30, 2012 was 3 years. The exercisable options had no intrinsic value at September 30, 2012.

13

American Natural Energy Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)

September 30, 2012 and 2011

As discussed in Note 6 above, the Company issued 596,000 warrants in February 2012 and 217,391 warrants in September 2012 in connection with the financing agreement entered into with TCA Global Credit Master Fund, LP during the first quarter of 2012. The Company issued 20,000,000 warrants in August 2012 in connection with the debenture agreement entered into with Palo Verde Acquisition, LLC. The fair value of these warrants was estimated on the date of the grant using a Black-Scholes valuation model that uses the following weighted average assumptions:

Warrants Granted in February 2012
Expected term, in years	5.00
Risk-Free interest rate	0.88%
Expected volatility	279.87%
Expected Dividend Rate	None
Warrants Granted in August 2012
Expected term, in years	2.00
Risk-Free interest rate	0.27%
Expected volatility	238.08%
Expected Dividend Rate	None
Warrants Granted in September 2012
Expected term, in years	2.00
Risk-Free interest rate	0.25%
Expected volatility	317.86%
Expected Dividend Rate	None

	The fair value of the warrants issued in February 2012 and September 2012 was determined to be $50,557 and $17,489 respectively, and was recorded as a deferred financing cost and is being amortized over the life of the note using the effective interest method (see Note 4). The relative fair value of the warrants issued in August 2012 was determined to be $140,657 and is recorded as debt discount and is being amortized over the life of the note using the effective interest method (see Note 5).
	At September 30, 2012, there were 20,813,391 warrants outstanding and exercisable with a weighted average exercise price of $0.23. The weighted average remaining contractual term for these warrants at September 30, 2012 was 1.94 years. The warrants had intrinsic value of $2,500 at September 30, 2012.
8	Asset Retirement Obligation
	The Company’s asset retirement obligations relate to plugging and abandonment of oil and gas properties. The components of the change in the Company’s asset retirement obligations for the nine months ended September 30, 2012 is shown below:

14

American Natural Energy Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)

September 30, 2012 and 2011

	For the nine months ended
	September 30, 2012
Asset retirement obligations, January 1, 2012	2,208,867
Additions and revisions	-
Settlement and disposals	-
Accretion expense	135,923
Asset retirement obligation, September 30, 2012	2,344,790

	.
9	Subsequent Event
	On October 9, 2012, the company amended the certain securities purchase agreement with TCA Global Credit Master Fund, LP and purchased back 1,764,706 common shares formerly issued to TCA for an aggregate amount of $150,000.
	On October 31, 2012 the Company sold an additional $1 million debenture to TCA Global Credit Master Fund, LP pursuant to the financing agreement dated December 29, 2011 (Note 4).

15

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

We currently are experiencing a severe shortage of working capital and funds to pay our liabilities. We have no current borrowing capacity with any lender. We incurred a net loss of $2,566,000 for the nine months ended September 30, 2012 and a net loss of $906,000 and $2,062,000 for the years ended December 31, 2011 and 2010. We have a working capital deficiency and an accumulated deficit at September 30, 2012 which leads to substantial doubt concerning our ability to meet our obligations as they come due. We also have a need for substantial funds to develop our oil and gas properties and repay borrowings as well as to meet our other current liabilities.

The accompanying consolidated financial statements in this Report have been prepared on a going concern basis which contemplates continuity of operations, realization of assets and liquidation of liabilities in the ordinary course of business. The independent registered public accounting firm’s report on our consolidated financial statements as of and for the year ended December 31, 2011 includes an explanatory paragraph which states that we have sustained a substantial loss in 2011 and have a working capital deficiency and an accumulated deficit at December 31, 2011 that raise substantial doubt about our ability to continue as a going concern. These matters raise substantial doubt about our ability to continue as a going concern. As a result of our losses incurred and current negative working capital, there is no assurance that the carrying amounts of assets will be realized or that liabilities will be liquidated or settled for the amounts recorded. Our ability to continue as a going concern is dependent upon adequate sources of capital and our ability to sustain positive results of operations and cash flows sufficient to continue to explore for and develop our oil and gas reserves and pay our obligations.

A Comparison of Operating Results For The Three Months Ended September 30, 2012 and September 30, 2011

We recorded a net loss of $1,207,000 during the three months ended September 30, 2012 compared to net income of $474,000 for the three months ended September 30, 2011. During the three months ended September 30, 2012, our revenues were comprised of oil and gas sales totaling $504,000 compared with oil and gas sales of $595,000 during the same period of 2011. Oil and gas prices were consistent and there was a decrease in production for the third quarter of 2012 as compared to the same period of 2011. Our net average daily production for the three month period ended September 30, 2012 decreased by 14% over the same period of the prior year, from 63 net barrels of oil equivalent per day to 54 net barrels of oil equivalent per day. Oil and gas prices decreased by 1% for the three month period ended September 30, 2012 over the same period of the prior year. The weighted average price decreased from $103.26 per barrel of oil equivalent to $102.35 per barrel of oil equivalent. Production from our existing wells is subject to fluctuation based upon which zones of wells are in production.

16

We had expenses of $1,780,000 for the three months ended September 30, 2012 compared to expenses of $133,000 for the three months ended September 30, 2011. Our general and administrative expenses were $422,000 for the three months ended September 30, 2012 compared to $366,000 for the three months ended September 30, 2011. The increase is primarily the result of increased professional fees.

Interest and financing costs increased for the three months ended September 30, 2012 compared to the same period in 2011 at $369,000 and $59,000 respectively. Interest and financing costs were higher in the third quarter of 2012 due to higher debt and the amortization of note discounts and deferred financing costs.

Lease operating expenses of $281,000, production taxes of $29,000 and depletion, depreciation and amortization of $133,000 during the three months ended September 30, 2012 changed from $238,000, $21,000, and $146,000, respectively, during the three months ended September 30, 2011. The expenses were consistent for the third quarter of 2012 compared to the same period of 2011.

During the three months ended September 30, 2012, we had a foreign exchange loss of $546,000, compared to a $697,000 foreign exchange gain for the three months ended September 30, 2011. Our foreign exchange gains and losses arise out of the debt payable to Leede Financial and an inter-company indebtedness we owe to our wholly-owned subsidiary, Gothic, which are payable in Canadian dollars. The foreign exchange loss for the three months ended September 30, 2012 was caused by the weakening of the US dollar against the Canadian dollar.

During the three months ended September 30, 2012, we had a gain on settlement of debt of $57,000. This is primarily due to the settlement of our note payable with Dune Energy. There was not such gain for the same period of 2011.

A Comparison of Operating Results For The Nine Months Ended September 30, 2012 and September 30, 2011

We recorded a net loss of $2,566,000 during the nine months ended September 30, 2012 compared to a net loss of $169,000 for the nine months ended September 30, 2011. During the nine months ended September 30, 2012, our revenues were comprised of oil and gas sales totaling $1,509,000 compared with oil and gas sales of $1,887,000 during the same period of 2011. Oil and gas prices were consistent but production decreased for the first nine months of 2012 as compared to the same period of 2011. Our net average daily production for the nine month period ended September 30, 2012 decreased by 20% over the same period of the prior year, from 66 net barrels of oil equivalent per day to 53 net barrels of oil equivalent per day. Oil and gas prices were consistent for the nine month period ended September 30, 2012 over the same period of the prior year. The weighted average price was $104.57 and $104.99 per barrel of oil equivalent for the nine months ended 2012 and 2011 respectively. Production from our existing wells is subject to fluctuation based upon which zones of wells are in production.

17

We had expenses of $4,170,000 for the nine months ended September 30, 2012 compared to expenses of $2,093,000 for the nine months ended September 30, 2011. Our general and administrative expenses were $1,580,000 for the nine months ended September 30, 2012 compared to $1,192,000 for the nine months ended September 30, 2011. The increase is primarily the result of increased compensation expense related to the issuance of stock and increased professional fees.

Interest and financing costs increased for the nine months ended September 30, 2012 compared to the same period in 2011 at $847,000 and $175,000 respectively. Interest and financing costs were higher in the first three quarters of 2012 due to higher debt and the amortization of note discounts and deferred financing costs.

Lease operating expenses of $792,000, production taxes of $86,000 and depletion, depreciation and amortization of $380,000 during the nine months ended September 30, 2012 changed from $609,000, $57,000, and $456,000, respectively, during the nine months ended September 30, 2011. Lease operating expenses were higher for the nine months ended September 30, 2012 due to repairs and maintenance on the field. Production taxes were higher for the nine months ended September 30, 2012 compared to the same period in 2011 as a result of changes in tax classifications on some producing wells. The decrease in depletion, depreciation and amortization charges were due to decreased production for the nine months ended September 30, 2012.

During the nine months ended September 30, 2012, we had a foreign exchange loss of $484,000, compared to a $396,000 foreign exchange gain for the nine months ended September 30, 2011. Our foreign exchange gains and losses arise out of the debt payable to Leede Financial and an inter-company indebtedness we owe to our wholly-owned subsidiary, Gothic, which are payable in Canadian dollars. The foreign exchange loss for the nine months ended September 30, 2012 was caused by the weakening of the US dollar against the Canadian dollar.

During the nine months ended September 30, 2012, we had a gain on settlement of debt of $57,000. This is primarily due to the settlement of our note payable with Dune Energy. There was not such gain for the same period of 2011.

Liquidity and Capital Resources

General

To date, our production has not been sufficient to fund our operations and drilling program. At September 30, 2012, we do not have any available borrowing capacity and have negative working capital of approximately $8.5 million.

We have substantial need for capital to develop our oil and gas prospects. Since 2001, we have funded our capital expenditures and operating activities through a series of debt and equity capital-raising transactions, drilling participations and through an increase in vendor payables and notes payable. We expect any future capital expenditures for drilling and development to be funded from the sale of drilling participations and equity capital. It is management's plan to raise additional capital through the sale of interests in our drilling activities or other strategic transaction; however, we currently have no firm commitment from any potential investors and such additional capital may not be available to us in the future.

18

A Comparison of Cash Flow For The Nine Months Ended September 30, 2012 and September 30, 2011

Our net cash used in operating activities was $1,133,000 for the nine months ended September 30, 2012 as compared to net cash provided by operating activities of $159,000 for the nine months ended September 30, 2011, a decrease of $1,292,000. The decrease in net cash provided by operating activities for the nine months ended September 30, 2012 was primarily due to an increase in net loss of $2,398,000 offset by an increase in noncash items of $1,443,000. Changes in working capital items had the effect of decreasing cash flows from operating activities by $345,000 during the nine months ended September 30, 2012 mainly due to a decrease in accounts payable and accrued liabilities of $152,000 and offset by an increase in accounts receivable and other current assets of $193,000. Changes in working capital items had the effect of decreasing cash flows from operating activities by $8,000 during the nine months ended September 30, 2011 due to an increase in accounts receivable and other current assets of $96,000 and offset by an increase to accounts payable and other accrued liabilities of $88,000.

We used $1,183,000 of net cash in investing activities during the nine months ended September 30, 2012 compared to net cash used of $132,000 in 2011. The cash used in investing in 2012 and 2011 was for the purchase and development of oil and gas properties.

Our net cash provided by financing activities was $2,653,000 for the nine months ended September 30, 2012 compared to net cash used of $12,000 for the same period in 2011. For the nine months ended September 30, 2012, net cash inflows from financing activities were a result of the issuance of notes, net of fees, of $3,702,000, of which $2,250,000 was to related parties, offset by payments against outstanding notes of $1,354,000, of which $28,000 was to related parties, and payments of deferred financing costs of $115,000. Proceeds of $420,000 were received during the second quarter of 2012 for the issuance of 7,000,000 shares of common stock at $0.06 per share in a private placement. For the nine months ended September 30, 2011, net cash outflows from financing activities were a result of the issuance of notes of $626,000 of which $500,000 was to related parties offset by payments against outstanding notes of $553,000 of which $181,000 was to related parties, and payments of deferred financing costs of $85,000.

We have no other commitments to expend additional funds for drilling activities for the rest of 2012.

19

How We Have Financed Our Activities

On July 29, 2009 we closed the final tranche of a Private Placement of 6.67 million shares of our common stock at $0.30 per share for total proceeds of $2.0 million. In conjunction with this placement, finders’ fees were paid to two firms in Vancouver, BC in the amount of $96,839 and finders’ warrants were issued for the purchase of 538,000 shares of common stock exercisable through July 29, 2010 at $0.50 per share. The net proceeds of the private placement were used to close the Dune Transaction and for working capital purposes.

On August 4, 2009 we re-purchased and retired $7.8 million, plus accrued and unpaid interest, of its 8% Secured Debentures held by Dune (including release of collateral rights), acquired Dune’s interest in producing wells and certain leasehold rights in the Bayou Couba field, resumed operations of the Bayou Couba field and settled outstanding issues between the companies. In exchange, we agreed to assign a portion of certain deep rights held by us and pay Dune a total of $1.3 million dollars with $1 million due at closing and an additional $300,000 due in quarterly payments commencing 90 days after resuming operations of the field. As of March 31, 2010 additional deep rights were assigned to Dune valued at $93,000 and were recorded as a reduction to the note payable. The note payable to Dune of $157,000 was settled for $105,000 on August 13, 2012 and a gain on settlement of debt of $52,000 was recorded in the third quarter of 2012.

We re-purchased our remaining outstanding 8% Secured Debenture debt totaling $2.0 million and an additional $821,000 of accrued interest from various holders with the payment of $256,000 and the issuance of 1.17 million shares of our common stock at a deemed price of $0.30 per share. The issuance of the shares occurred during the third quarter of 2009.

On July 31, 2012 we received final approval from the TSX Venture Exchange for the issuance of 7 million shares of our common stock in a private placement. The shares were issued at $0.06 per share for a total raise of $420,000.

On August 13, 2012, the Company entered into a Securities Purchase Agreement with Palo Verde Acquisitions, LLC, pursuant to which the Company sold to Palo Verde (1) a $2,000,000 12% unsecured Convertible Debenture due August 13, 2014 (the "Palo Verde Debenture") and (2) warrants to purchase up to 20,000,000 shares of common stock of the Company at an exercise price of US$0.23 per share and expiring on August 13, 2014 (the "Warrants"). The aggregate consideration paid to the Company by Palo Verde for the Palo Verde Debenture and the Warrants was $2,000,000.

Interest on the outstanding principal amount of the Palo Verde Debenture will accrue at a rate of 12% per annum, and is payable by the Company on a quarterly basis. At the Company's election, interest may be payable by the Company in shares of common stock of the Company in lieu of cash. The entire principal amount of the Palo Verde Debenture is due on August 13, 2014. The Company may not prepay any portion of the principal amount of the Palo Verde Debenture without the prior written consent of Palo Verde.

At any time prior to the payment of the Palo Verde Debenture in full, Palo Verde may elect, in its sole discretion, to convert all or part of the principal amount of the Palo Verde Debenture into shares of common stock of the Company at a conversion rate of US$0.10 per share of common stock. Notwithstanding the foregoing, Palo Verde may not convert any principal amount of the Palo Verde Debenture into common shares of the Company if, following such conversion, Palo Verde and its affiliates would own more than 19.9% of the number of shares of common stock of the Company then outstanding (the "Beneficial Ownership Limitation"). The same Beneficial Ownership Limitation applies to the exercise by Palo Verde of any Warrants. The Palo Verde Debenture contains customary adjustment provisions for certain corporate events, such as the payment of stock dividends and stock splits. The Palo Verde Debenture also contains customary events of default.

20

Pursuant to the Palo Verde Purchase Agreement, Palo Verde may purchase from the Company an additional $1,000,000 12% convertible debenture and additional warrants to purchase up to 10,000,000 shares of common stock of the Company at an exercise price of US$0.23 per share (such additional debenture and additional warrants, the "Additional Securities") for a total payment of an additional $1,000,000. Prior to the consummation of any such additional purchase and pursuant to the Palo Verde Purchase Agreement, the Company has agreed to hold an annual stockholders meeting in 2012 to, among other things, submit to the stockholders a proposal to permit Palo Verde to convert the Palo Verde Debenture and exercise the Warrants (and to convert and exercise, respectively, any Additional Securities purchased) without the limitation of the Beneficial Ownership Limitation.

Future Capital Requirements and Resources

At September 30, 2012, we do not have any available borrowing capacity under existing credit facilities and our current assets are $1,295,000 compared with current liabilities of $9.8 million. Our current liabilities include accounts payable, revenues payable, notes payable (a portion of which is past due), and other current obligations. We have substantial needs for funds to pay our outstanding payables and debt due during 2012. In addition, we have substantial need for capital to develop our oil and gas prospects. At September 30, 2012, we have no commitments for additional capital to fund drilling activities in 2012.

Since 2001, we have funded our capital expenditures and operating activities through a series of debt and equity capital-raising transactions, drilling participations and, during the last two quarters of 2004 and all of 2005 and 2006, through an increase in vendor payables and notes payable. It is our intention to raise additional capital through the sale of interests in our drilling activities or other strategic transaction; however, we currently have no firm commitment from any potential investors and such additional capital may not be available to us in the future. We expect that any capital expenditures for drilling purposes during 2012 will be funded from the sale of drilling participations and equity capital.

Our business strategy requires us to obtain additional financing and our failure to do so can be expected to adversely affect our ability to grow our revenues, oil and gas reserves and achieve and maintain a significant level of revenues and profitability. There can be no assurance we will obtain this additional funding. Such funding may be obtained through the sale of drilling participations, joint ventures, equity securities or by incurring additional indebtedness. Without such funding, our revenues will continue to be limited and it can be expected that our operations will not be profitable. In addition, any additional equity funding that we obtain may result in material dilution to the current holders of our common stock.

21

Cautionary Statement for Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995

With the exception of historical matters, the matters we discussed below and elsewhere in this Report are “forward-looking statements” as defined under the Securities Exchange Act of 1934, as amended that involve risks and uncertainties. The forward-looking statements appear in various places including under the headings Item 1. Financial Statements and Item 2. Management’s Discussion and Analysis or Plan of Operation. These risks and uncertainties relate to

• our ability to raise capital and fund our oil and gas well drilling and development plans,

• our ability to fund the repayment of our current liabilities, and

• our ability to negotiate and enter into any agreement relating to a merger or sale of all or substantially all our assets.

These risks and uncertainties also relate to our ability to attain and maintain profitability and cash flow and continue as a going concern, our ability to increase our reserves of oil and gas through successful drilling activities and acquisitions, our ability to enhance and maintain production from existing wells and successfully develop additional producing wells, our access to debt and equity capital and the availability of joint venture development arrangements, our ability to remain in compliance with the terms of any agreements pursuant to which we borrow money and to repay the principal and interest when due, our estimates as to our needs for additional capital and the times at which additional capital will be required, our expectations as to our sources for this capital and funds, our ability to successfully implement our business strategy, our ability to maintain compliance with covenants of our loan documents and other agreements pursuant to which we issue securities or borrow funds and to obtain waivers and amendments when and as required, our ability to borrow funds or maintain levels of borrowing availability under our borrowing arrangements, our ability to meet our intended capital expenditures, our statements and estimates about quantities of production of oil and gas as it implies continuing production rates at those levels, proved reserves or borrowing availability based on proved reserves and our future net cash flows and their present value.

Readers are cautioned that the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2011 and other reports filed with the Commission, as well as those described elsewhere in this Report, in some cases have affected, and in the future could affect, our business plans and actual results of operations and could cause our actual consolidated results during 2012 and beyond, to differ materially from those expressed in any forward-looking statements made by or on our behalf.

22

Our common shares have no trading market in the United States, and there can be no assurance as to the liquidity of any markets that may develop for our common shares, the ability of the holders of common shares to sell their common shares in the United States or the price at which holders would be able to sell their common shares. Any future trading prices of the common shares will depend on many factors, including, among others, our operating results and the market for similar securities.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report on Form 10-Q, our Chief Executive Officer and our Chief Financial Officer performed an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act. In designing and evaluating the disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that as of the end of the period covered by this report on Form 10-Q that our disclosure controls and procedures are not effective to provide reasonable assurance that: (i) information required to be disclosed by us in reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure by us; and (ii) information required to be disclosed by us in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. In our evaluation of disclosure controls and procedures as of December 31, 2011, we concluded there were material weaknesses in our internal controls over financial reporting which we viewed as an integral part of our disclosure controls and procedures. The material weaknesses as noted below have not been remediated as of November 14, 2012.

Changes in Internal Control Over Financial Reporting

As of December 31, 2011 we identified material weaknesses in our internal controls over financial reporting. The material weaknesses relate to:

1. Deficiencies in segregation of duties due to:

a.	the CEO and CFO’s active involvement in the preparation of the financial statements resulting in an inability to provide an independent review and quality assurance function; and
b.	a limited number of qualified accounting personnel resulting in management and accounting personnel having wide-spread access to create and post accounting entries into the accounting system and an inability to independently review and approve accounting entries.

23

2. The failure to identify during the year-end financial statement closing process all the journal entries required for certain complex and non-routine transactions. These entries were identified by our independent registered public accounting firm.

In order to mitigate these material weaknesses to the fullest extent possible, all financial reports are reviewed by the CEO and CFO. All unexpected results are investigated. At any time, if it appears that any control can be implemented to continue to mitigate such weaknesses, it is immediately implemented. As soon as our finances allow, we will hire sufficient staff and implement appropriate procedures to address the segregation of duties and improve the closing process.

There were no significant changes in our internal control over financial reporting identified in connection with the evaluation that occurred during the last fiscal quarter that have materially affected or that are reasonably likely to materially affect our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 6. Exhibits

31.1	Certification of President and Chief Executive Officer Pursuant to Rule 13a-14(a)(1)
31.2	Certification of Chief Financial Officer Pursuant to Rule 13a- 14(a)(1)
32.1	Certification of President and Chief Executive Officer Pursuant to Section 1350 (furnished, not filed)(1)
32.2	Certification of Chief Financial Officer Pursuant to Section 1350 (furnished, not filed)(1)

____________________________
⁽¹⁾ Filed or furnished herewith.

24

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

	AMERICAN NATURAL ENERGY CORPORATION
	(Registrant)
Date: November 14, 2012	/S/ Michael K. Paulk
	Michael K. Paulk
	President and Chief Executive Officer
	/S/ Steven P. Ensz
	Steven P. Ensz
	Principal Financial and Accounting Officer

25

EX-31.1

Exhibit 31.1

Chief Executive Officer’s Certification Pursuant to Rule 13a-14(a)

I, Michael K. Paulk, certify that:

1. I have reviewed this quarterly report on Form 10-Q of American Natural Energy Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

4. The small business issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5. The small business issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of the small business issuer’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.

Date: November 14, 2012	/s/ Michael K. Paulk
	Michael K. Paulk
	President

EX-31.2

Exhibit 31.2

Chief Financial Officer’s Certification Pursuant to Rule 13a-14(a)

I, Steven P. Ensz, certify that:

1. I have reviewed this quarterly report on Form 10-Q of American Natural Energy Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

4. The small business issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5. The small business issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of the small business issuer’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.

Date: November 14, 2012	/s/Steven P. Ensz
	Steven P. Ensz
	Vice President, Finance

EX-32.1

Exhibit 32.1

Principal Executive Officer’s Certification Pursuant To
Section 1350
(furnished, but not filed)

In connection with the Quarterly Report of American Natural Energy Corporation (the Company) on Form 10-Q for the period ending September 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Michael K. Paulk, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Michael K. Paulk
Michael K. Paulk
Chief Executive Officer
November 14, 2012

A signed original of this written statement required by Section 906 has been provided to American Natural Energy Corporation and will be retained by American Natural Energy Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

Principal Financial Officer’s Certification Pursuant To
Section 1350
(furnished, but not filed)

In connection with the Quarterly Report of American Natural Energy Corporation (the Company) on Form 10-Q for the period ending September 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Steven P. Ensz, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Steven P. Ensz
Steven P. Ensz
Chief Financial Officer
November 14, 2012

A signed original of this written statement required by Section 906 has been provided to American Natural Energy Corporation and will be retained by American Natural Energy Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Subsequent Event (Narrative) (Details) (USD $)	9 Months Ended
	Sep. 30, 2012
Subsequent Event 1	1,764,706
Subsequent Event 2	$ 150,000
Subsequent Event 3	$ 1,000,000

XML

Notes Payable

9 Months Ended

Sep. 30, 2012

Notes Payable [Text Block]

4	Notes Payable
	Notes payable and long-term debt as of September 30, 2012 and December 31, 2011 consisted of the following:

	September 30, 2012		December 31, 2011
	$		$
Note payable – Citizens Bank of Oklahoma	255,921		422,465
Note payable – TCA Global Credit Master Fund	1,000,000		-
Discount on TCA Global Credit Master Fund note	(134,595	)	-
Note payable – Dune Energy (Note 5)	-		157,017
Note payable – Leede Financial	406,567		373,045
Total third-party notes payable and long-term debt	1,527,893		952,527
Debenture payable – Palo Verde (Note 5)	2,000,000		-
Discount on Palo Verde debt	(834,420	)	-
Note payable – TPC Energy	414,183		164,183
Discount on TPC Energy Note	(19,455	)	-
Note payable – Mike Paulk	472,222		500,000
Note payable - Other	21,728		21,728
Total related party notes payable and long-term debt	2,054,258		685,911
Total notes payable and long-term debt	3,582,151		1,638,438
Less: Current portion	(2,416,571	)	(1,638,438	)
Total notes payable and long-term debt, net of current portion	1,165,580		-

On September 10, 2009, the Company entered into a $500,000 unsecured short-term note with interest at the rate of 6% per annum with Citizens Bank of Oklahoma. On January 31, 2012, the loan was modified with a new interest rate of 12% and a maturity date of July 31, 2012. On July 31, 2012, the loan was further modified to extend the maturity date to September 30, 2013 All accrued interest is payable monthly. Proceeds of $475,500 from the note were paid to the Company and the remaining proceeds of $24,500 were used to pay off a prior note with Citizens Bank of Oklahoma. Net payments of $166,543 were made during the nine months ended September 30, 2012. The Company evaluated the application of ASC 470-50 and ASC 470-60 and concluded that the revised terms constituted a debt modification, rather than a debt extinguishment or a troubled debt restructuring.

On March 31, 2011, with an effective date of January 1, 2011, the Company purchased the working interests from TPC Energy for $300,000 through the issuance of a note payable in the same amount. Principal payments of $12,500 and interest at the rate of 10% per annum are due monthly. During the effective date through the closing date of March 31, 2011, revenues of $95,662 were recorded as a purchase price adjustment that lowered the note payable balance to $204,338 and during the year ended December 31, 2011, cash payments totaling $40,155 were also applied to the note which left a remaining balance due of $164,183. During the first quarter of 2012 TPC Energy advanced an additional $250,000 to the Company with repayment of the loan due one year from the date of advancement and with interest payable monthly. In addition to the additional $250,000, the Company assigned 50% of its interest in its share of the Liquidation Agents account distributions to TPC Energy for the life of the note. The rights were valued at $39,619 and were recorded as a discount on the note, which is being amortized over the life of the note using the effective interest method. The TPC note is included in Notes Payable – Related Parties on the balance sheet as of September 30, 2012.

On February 17, 2011, the Company entered into a $500,000 note payable with Mike Paulk and Steven Ensz, directors of the Company, with an annual interest rate of 10%. The note, initially due February 15, 2012 has been renewed and extended until February 15, 2013. The Company evaluated the application of ASC 470-50 and ASC 470-60 and concluded that the revised terms constituted a debt modification rather than a debt extinguishment or a troubled debt restructuring. Payments totaling $27,778 have been made as of September 30, 2012.

The Company entered into a financing agreement with TCA Global Credit Master Fund, LP during the first quarter of 2012. Proceeds of the financing are to be used for the drilling and completion of wells included in the Company’s inventory of Proved Undeveloped reserves (“PUD”). The Company has a commitment for a total amount of $3 million, before fees and expenses, through the issuance of a series of $1 million debentures. The debenture is secured by a first priority, perfected security interest and mortgage in oil and gas leases and properties. At no time shall the investor funds exceed 65% of the drilling and completion cost of the PUD’s with the balance provided by the Company’s generated funds.

In January 2012, the first tranche TCA debt of $1 million was issued. The debt is due on December 29, 2012 and is payable monthly with a mandatory redemption fee equal to 10% and interest of 5%. Fees paid in cash and common stocks to TCA Global Credit Master Fund, LP of $195,440 were recorded as a debt discount. As of September 30, 2012 the first tranche TCA debt was paid in full and debt discount was fully amortized.

In connection with the issuance of first tranche TCA debt, the Company paid cash fees and issued shares and warrants to other third parties valued at $273,833. These cash fees, common shares and warrants were recorded as deferred financing costs, which were fully amortized as of September 30, 2012.

In August 2012, the second tranche TCA debt of $1 million was issued. The debt is due on August 31, 2013 and is payable monthly with a mandatory redemption fee equal to 10% and interest of 5%. Out of $1 million debt proceed, $333,333 was used to pay off the remaining principal balance of the first tranche TCA debt, $497,000 was kept in escrow account to pay off two legal settlements, and net proceeds of $111,167 was received by the Company. Fees paid and to be paid in cash totaling $157,500 to TCA Global Credit Master Fund, LP were recorded as a debt discount. As of September 30, 2012, $22,905 of debt discount has been amortized.

In connection with the issuance of second tranche TCA debenture, the Company paid cash fees and issued shares and warrants to other third parties valued at $117,489. These cash fees, common shares and warrants were recorded as deferred financing costs, of which $17,313 have been amortized as of September 30, 2012.

In December, 2009, the Company entered into a $373,045 unsecured short-term note with Leede Financial with an interest of 12% per annum. The note is payable in Canadian dollars. The maturity date of the note has been extended to December 31, 2012. The Company evaluated the application of ASC 470-50 and ASC470-60 and concluded the revised term constituted a debt modification. As a result of the change in the exchange rates, the debt amount (in US dollars) increased to $406,567 as of September 30, 2012 and the increase of $33,521 was recognized as loss on foreign exchange translation on the statements of operations.

XML

Schedule of Change in Asset Retirement Obligation (Details) (USD $)	9 Months Ended
	Sep. 30, 2012
Asset Retirement Obligation Schedule Of Change In Asset Retirement Obligation 1	$ 2,208,867
Asset Retirement Obligation Schedule Of Change In Asset Retirement Obligation 2	0
Asset Retirement Obligation Schedule Of Change In Asset Retirement Obligation 3	0
Asset Retirement Obligation Schedule Of Change In Asset Retirement Obligation 4	135,923
Asset Retirement Obligation Schedule Of Change In Asset Retirement Obligation 5	$ 2,344,790

XML

Going Concern, Liquidity and Capital Resources

9 Months Ended

Sep. 30, 2012

Going Concern, Liquidity and Capital Resources [Text Block]

3	Going Concern, Liquidity and Capital Resources
	The Company currently has a severe shortage of working capital and funds to pay its liabilities. The Company has no current borrowing capacity with any lender. The Company incurred a net loss of $2,566,288 for the nine months ended September 30, 2012. The Company has a working capital deficit of $8,463,712 and an accumulated deficit of $22,794,669 at September 30, 2012 which leads to substantial doubt concerning the ability of the Company to meet its obligations as they come due. The Company also has a need for substantial funds to develop its oil and gas properties and repay borrowings as well as to meet its other current liabilities.
	The accompanying consolidated financial statements have been prepared on a going concern basis which contemplates continuity of operations, realization of assets and liquidation of liabilities in the ordinary course of business. As a result of the losses incurred and current negative working capital, there is no assurance that the carrying amounts of assets will be realized or that liabilities will be liquidated or settled for the amounts recorded. The ability of the Company to continue as a going concern is dependent upon adequate sources of capital and the Company’s ability to sustain positive results of operations and cash flows sufficient to continue to explore for and develop its oil and gas reserves and pay its obligations.
	Management’s strategy has been to obtain additional financing or industry partners. It is management’s intention to raise additional debt or equity financing to fund its operations and capital expenditures or to enter into another transaction in order to maximize shareholder value. Failure to obtain additional financing can be expected to adversely affect the Company’s ability to pay its obligations, further the development of its properties, grow revenues, oil and gas reserves and achieve and maintain a significant level of revenues, cash flows, and profitability. There can be no assurance that the Company will obtain this additional financing at the time required, at rates that are favorable to the Company, or at all. Further, any additional equity financing that is obtained may result in material dilution to the current holders of common stock.

XML

Condensed Consolidated Balance Sheets (Unaudited) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 336,666	$ 0
Restricted cash	497,000	0
Accounts receivable - joint interest billing	91,929	22,104
Accounts receivable - oil and gas sales	131,200	31,963
Prepaid expenses and other	104,730	84,141
Oil inventory	29,458	26,484
Deferred financing costs	104,282	0
Total current assets	1,295,265	164,692
Proved oil and natural gas properties, full cost method of accounting, net of accumulated depletion, depreciation, amortization and impairment of $21,768,281 and $21,542,440	18,197,387	15,932,509
Unproved oil and natural gas properties	675,201	571,796
Equipment and other fixed assets, net of accumulated depreciation of $1,149,718 and $1,131,053	28,513	47,178
Other deferred costs	0	105,000
Total assets	20,196,366	16,821,175
Current liabilities:
Accounts payable and accrued liabilities	3,665,303	2,276,534
Revenue payable	3,521,711	3,460,249
Accounts payable - related parties	0	49,936
Accrued interest	56,655	58,510
Insurance note payable	58,485	48,163
Notes payable - related parties net of discounts of $19,455 and $0 respectively	888,678	685,911
Note payable, net of discounts of $134,595 and $0 respectively	1,527,893	952,527
Taxes due on dissolution of subsidiary	40,252	45,252
Total current liabilities	9,758,977	7,577,082
Debenture payable, net of discounts of $834,420 and $0 respectively	1,165,580	0
Asset retirement obligation	2,344,790	2,208,867
Total liabilities	13,269,347	9,785,949
Commitments and contingencies	0	0
Stockholders' equity :
Common stock Authorized - 250,000,000 shares with par value of $0.001 - 26,405,085 and 13,431,954 shares issued and outstanding respectively	26,405	13,432
Additional paid-in capital	25,445,964	23,451,773
Accumulated deficit, since January 1, 2002 (in conjunction with the quasi- Reorganization stated capital was reduced by an accumulated deficit of $2,015,495)	(22,794,669)	(20,228,381)
Accumulated other comprehensive income	4,249,319	3,798,402
Total stockholders' equity	6,927,019	7,035,226
Total liabilities and stockholders' equity	$ 20,196,366	$ 16,821,175

XML

Significant accounting policies

9 Months Ended

Sep. 30, 2012

Significant accounting policies [Text Block]

1	Significant accounting policies
	The accounting policies and methods followed in preparing these unaudited condensed consolidated financial statements are those used by American Natural Energy Corporation (the “Company”) as described in Note 1 of the notes to consolidated financial statements included in the Annual Report on Form 10-K. The unaudited condensed consolidated financial statements for the nine-month periods ended September 30, 2012 and 2011 have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission and do not conform in all respects to the disclosure and information that is required for annual consolidated financial statements. The year-end condensed consolidated balance sheet data was derived from audited consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. These interim condensed consolidated financial statements should be read in conjunction with the most recent annual consolidated financial statements of the Company.
	In the opinion of management, all adjustments, all of which are of a normal recurring nature, considered necessary for fair statement have been included in these interim condensed consolidated financial statements. Operating results for the nine-month period ended September 30, 2012 are not indicative of the results that may be expected for the full year ending December 31, 2012.

Reclassification of Prior Period Statements

Certain reclassifications of prior period consolidated financial statements balances have been made to conform to current reporting practices.

Stock-based compensation

As discussed below in Note 7, the Company has a stock-based compensation plan, and effective January 1, 2006, accounts for stock options granted to employees under this plan in accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 718, Share-Based Payment ("ASC 718") . Under the provisions of ASC 718, share-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the grantee’s requisite service period (generally the vesting period of the equity grant).

XML

Convertible Debentures (Narrative) (Details) (USD $)	9 Months Ended
	Sep. 30, 2012 D
Convertible Debentures 1	$ 7,895,000
Convertible Debentures 2	2,100,000
Convertible Debentures 3	8.00%
Convertible Debentures 4	2,100,000
Convertible Debentures 5	93,000
Convertible Debentures 6	1,000,000
Convertible Debentures 7	300,000
Convertible Debentures 8	50,000
Convertible Debentures 9	90
Convertible Debentures 10	157,000
Convertible Debentures 11	105,000
Convertible Debentures 12	52,000
Convertible Debentures 13	2,000,000
Convertible Debentures 14	12.00%
Convertible Debentures 15	20,000,000
Convertible Debentures 16	$ 0.23
Convertible Debentures 17	2,000,000
Convertible Debentures 18	12.00%
Convertible Debentures 19	$ 0.1
Convertible Debentures 20	19.90%
Convertible Debentures 21	140,657
Convertible Debentures 22	740,657
Convertible Debentures 23	881,314
Convertible Debentures 24	46,894
Convertible Debentures 25	1,000,000
Convertible Debentures 26	12.00%
Convertible Debentures 27	10,000,000
Convertible Debentures 28	$ 0.23
Convertible Debentures 29	$ 1,000,000

XML

Stock-based compensation, stock options and warrants (Narrative) (Details) (USD $)	9 Months Ended
	Sep. 30, 2012 Y warrant option
Stock-based Compensation, Stock Options And Warrants 1	25.00%
Stock-based Compensation, Stock Options And Warrants 2	12.50%
Stock-based Compensation, Stock Options And Warrants 3	$ 149,000
Stock-based Compensation, Stock Options And Warrants 4	2,505,000
Stock-based Compensation, Stock Options And Warrants 5	0.41
Stock-based Compensation, Stock Options And Warrants 6	3
Stock-based Compensation, Stock Options And Warrants 7	596,000
Stock-based Compensation, Stock Options And Warrants 8	217,391
Stock-based Compensation, Stock Options And Warrants 9	20,000,000
Stock-based Compensation, Stock Options And Warrants 10	50,557
Stock-based Compensation, Stock Options And Warrants 11	17,489
Stock-based Compensation, Stock Options And Warrants 12	140,657
Stock-based Compensation, Stock Options And Warrants 13	20,813,391
Stock-based Compensation, Stock Options And Warrants 14	0.23
Stock-based Compensation, Stock Options And Warrants 15	1.94
Stock-based Compensation, Stock Options And Warrants 16	$ 2,500

XML

Earnings (loss) per share

9 Months Ended

Sep. 30, 2012

Earnings (loss) per share [Text Block]

2

Earnings (loss) per share

Basic earnings (loss) per share is computed by dividing net income or loss (the numerator) by the weighted average number of shares outstanding during the period (the denominator). The diluted earnings (loss) per share is determined using the treasury method of shares outstanding as of September 30, 2012. This includes the net of new shares potentially created by unexercised in-the- money options. The method assumes that the proceeds that a company receives from in-the-money options exercised are used to repurchase common shares in the market. The Company had 2,505,000 vested and unexercised employee stock options and 20,813,391 vested and unexercised warrants outstanding as of September 30, 2012, with the outstanding employee stock options and warrants excluded from the calculation of diluted earnings per share as they were anti-dilutive.

XML

Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Accumulated Depreciation, Depletion and Amortization, Proved Oil and Gas Properties	$ 21,768,281	$ 21,542,440
Equipment and other fixed assets, net of accumulated depreciation	1,149,718	1,131,053
Notes payable related parties net of discounts	19,455	0
Note payable, net of discounts	134,595	0
Debenture Payable Net Of Discount	834,420	0
Common Stock, Shares Authorized	250,000,000	250,000,000
Common Stock, Par Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares, Issued	26,405,085	13,431,954
Common Stock, Shares, Outstanding	26,405,085	13,431,954
quasi-reorganization stated capital reduced by an accumulated deficit	$ 2,015,495	$ 2,015,495

XML

Stock-based compensation, stock options and warrants (Tables)

9 Months Ended

Sep. 30, 2012

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

Warrants Granted in February 2012
Expected term, in years	5.00
Risk-Free interest rate	0.88%
Expected volatility	279.87%
Expected Dividend Rate	None
Warrants Granted in August 2012
Expected term, in years	2.00
Risk-Free interest rate	0.27%
Expected volatility	238.08%
Expected Dividend Rate	None
Warrants Granted in September 2012
Expected term, in years	2.00
Risk-Free interest rate	0.25%
Expected volatility	317.86%
Expected Dividend Rate	None

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2012	Nov. 14, 2012
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2012
Trading Symbol	anr
Entity Registrant Name	American Natural Energy Corporation
Entity Central Index Key	0000870732
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		26,405,085
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well Known Seasoned Issuer	No
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3

XML

Asset Retirement Obligation (Tables)

9 Months Ended

Sep. 30, 2012

Schedule of Change in Asset Retirement Obligation [Table Text Block]

	For the nine months ended
	September 30, 2012
Asset retirement obligations, January 1, 2012	2,208,867
Additions and revisions	-
Settlement and disposals	-
Accretion expense	135,923
Asset retirement obligation, September 30, 2012	2,344,790

XML

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Revenues:
Oil and gas sales	$ 504,029	$ 595,185	$ 1,509,027	$ 1,886,765
Operations income	11,923	11,922	38,122	37,964
Total Revenue	515,952	607,107	1,547,149	1,924,729
Expenses:
Lease operating expense	280,962	238,179	791,598	608,993
Production taxes	29,371	21,134	86,373	57,313
General and administrative	421,987	365,561	1,580,242	1,192,388
Foreign exchange (gain) loss	546,098	(696,929)	484,438	(395,900)
Interest and financing costs	368,507	59,428	847,319	174,743
Depletion, depreciation and amortization - oil and gas properties	81,839	95,949	225,841	293,878
Accretion of asset retirement obligation	46,588	42,866	135,923	141,316
Depreciation and amortization - other assets	4,881	6,897	18,665	20,696
Total expenses	1,780,233	133,085	4,170,399	2,093,427
Other income
Gain on settlement of debt	56,962	0	56,962	0
Net income (loss)	(1,207,319)	474,022	(2,566,288)	(168,698)
Other comprehensive income- net of tax:
Foreign exchange translation	512,577	(696,929)	450,917	(395,900)
Other comprehensive income ( loss)	512,577	(696,929)	450,917	(395,900)
Comprehensive loss	$ (694,742)	$ (222,907)	$ (2,115,371)	$ (564,598)
Basic and diluted loss per share	$ (0.05)	$ (0.04)	$ (0.12)	$ (0.01)
Weighted average number of shares outstanding
Basic	25,949,599	13,431,954	21,033,945	13,431,954
Diluted	25,949,599	13,431,954	21,033,945	13,431,954

XML

Stock-based compensation, stock options and warrants

9 Months Ended

Sep. 30, 2012

Stock-based compensation, stock options and warrants [Text Block]

7	Stock-based compensation, stock options and warrants
	On January 1, 2006, the Company adopted ASC 718 which requires companies to measure the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. The Company has elected to use the modified prospective application method such that ASC 718 applies to new awards, the unvested portion of existing awards and to awards modified, repurchased or canceled after the effective date. The Company has equity incentive plans that provide for the issuance of stock options. These plans are discussed more fully in the Company’s Form 10-K for the year ended December 31, 2011. All options expire five years from the date of grant. Generally, stock options granted to employees and directors vest 25% upon approval of the grant by the TSX Venture Exchange and 12.5% per quarter thereafter. The Company recognizes stock-based compensation expense over the vesting period of the individual grants.
	For the nine months ended September 30, 2012, the Company recognized compensation costs of approximately $149,000 related to stock options issued September 8, 2009 and November 30, 2010. At September 30, 2012, there was no unrecognized compensation costs related to non-vested stock options granted on September 8, 2009 and November 30, 2010.
	At September 30, 2012 there were 2,505,000 options outstanding and exercisable with a weighted average exercise price of $0.41.The weighted average remaining contractual term for these outstanding and exercisable options at September 30, 2012 was 3 years. The exercisable options had no intrinsic value at September 30, 2012.

As discussed in Note 6 above, the Company issued 596,000 warrants in February 2012 and 217,391 warrants in September 2012 in connection with the financing agreement entered into with TCA Global Credit Master Fund, LP during the first quarter of 2012. The Company issued 20,000,000 warrants in August 2012 in connection with the debenture agreement entered into with Palo Verde Acquisition, LLC. The fair value of these warrants was estimated on the date of the grant using a Black-Scholes valuation model that uses the following weighted average assumptions:

Warrants Granted in February 2012
Expected term, in years	5.00
Risk-Free interest rate	0.88%
Expected volatility	279.87%
Expected Dividend Rate	None
Warrants Granted in August 2012
Expected term, in years	2.00
Risk-Free interest rate	0.27%
Expected volatility	238.08%
Expected Dividend Rate	None
Warrants Granted in September 2012
Expected term, in years	2.00
Risk-Free interest rate	0.25%
Expected volatility	317.86%
Expected Dividend Rate	None

The fair value of the warrants issued in February 2012 and September 2012 was determined to be $50,557 and $17,489 respectively, and was recorded as a deferred financing cost and is being amortized over the life of the note using the effective interest method (see Note 4). The relative fair value of the warrants issued in August 2012 was determined to be $140,657 and is recorded as debt discount and is being amortized over the life of the note using the effective interest method (see Note 5).

At September 30, 2012, there were 20,813,391 warrants outstanding and exercisable with a weighted average exercise price of $0.23. The weighted average remaining contractual term for these warrants at September 30, 2012 was 1.94 years. The warrants had intrinsic value of $2,500 at September 30, 2012.

XML

Common Stock

9 Months Ended

Sep. 30, 2012

Common Stock [Text Block]

6	Common Stock
	In connection with the financing agreement entered into with TCA Global Credit Master Fund, LP during the first quarter of 2012 the Company paid an Equity Incentive Fee of $150,000 worth of 1,764,706 Restricted Shares of ANEC stock. The shares carry a nine (9) month ratchet whereby either party is obligated to refund (by the Investor) or issue (by the Company) shares to equal the initial value. The relative fair value of the shares of $129,240, in addition to cash fees paid to TCA of $66,200, was recorded as a discount on the note and is being amortized over the life of the note using the effective interest method (see Note 4).
	In connection with the closing of the $1 million first tranche in February 2012, the Company issued finder’s fees consisting of the following: 732,235 shares of common stock of the Corporation, 500,000 warrants to purchase the common stock of the Corporation at an exercise price of $0.10 per share with a contractual term of five years and 96,000 warrants to purchase the common stock of the Corporation at an exercise price of $0.25 per share with a contractual term of five years. The fair values of the shares of $60,776 and the warrants of $50,557 were recorded as deferred financing costs and are being amortized over the life of the note using the effective interest method.

In connection with the closing of the $1 million second tranche in August 2012, the Company issued finder’s fees consisting of the following: 476,190 shares of common stock of the Corporation, 217,391 warrants to purchase the common stock of the Corporation at an exercise price of $0.23 per share with a contractual term of two years. The fair values of the shares of $50,000 and the warrants of $17,489 were recorded as deferred financing costs and are being amortized over the life of the note using the effective interest method.

On February 17, 2012, the Company issued 1.5 million Restricted Shares each to Mike Paulk and Steven Ensz as compensation for personal guarantees provided in connection with various outstanding financings. The fair value of these shares of $249,000 was recorded as stock based compensation expense in the first quarter of 2012.

On June 8, 2012, the Company completed a private placement of 7 million shares of common stock issued at $0.06 per share for a total of $420,000.

In connection with the closing of the $2 million Palo Verde Acquisition LLC convertible debt, the Company issued 20 million warrants (see Note 5). The fair value of the beneficiary conversion feature and relative fair value of the warrants totaling $881,314 were recorded as debt discount and an addition to additional paid-in capital.

XML

Common Stock (Narrative) (Details) (USD $)	9 Months Ended
	Sep. 30, 2012 warrant
Common Stock 1	$ 150,000
Common Stock 2	1,764,706
Common Stock 3	129,240
Common Stock 4	66,200
Common Stock 5	1,000,000
Common Stock 6	732,235
Common Stock 7	500,000
Common Stock 8	$ 0.1
Common Stock 9	96,000
Common Stock 10	$ 0.25
Common Stock 11	60,776
Common Stock 12	50,557
Common Stock 13	1,000,000
Common Stock 14	476,190
Common Stock 15	217,391
Common Stock 16	$ 0.23
Common Stock 17	50,000
Common Stock 18	17,489
Common Stock 19	1,500,000
Common Stock 20	249,000
Common Stock 21	7,000,000
Common Stock 22	$ 0.06
Common Stock 23	420,000
Common Stock 24	2,000,000
Common Stock 25	20,000,000
Common Stock 26	$ 881,314

XML

Earnings (loss) per share (Narrative) (Details)	9 Months Ended
	Sep. 30, 2012
Earnings (loss) Per Share 1	2,505,000
Earnings (loss) Per Share 2	20,813,391

XML

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2012

Reclassification of Prior Period Statements [Policy Text Block]

Reclassification of Prior Period Statements

Certain reclassifications of prior period consolidated financial statements balances have been made to conform to current reporting practices.

Stock-based compensation [Policy Text Block]

Stock-based compensation

As discussed below in Note 7, the Company has a stock-based compensation plan, and effective January 1, 2006, accounts for stock options granted to employees under this plan in accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 718, Share-Based Payment ("ASC 718") . Under the provisions of ASC 718, share-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the grantee’s requisite service period (generally the vesting period of the equity grant).

XML

Asset Retirement Obligation

9 Months Ended

Sep. 30, 2012

Asset Retirement Obligation [Text Block]

8	Asset Retirement Obligation
	The Company’s asset retirement obligations relate to plugging and abandonment of oil and gas properties. The components of the change in the Company’s asset retirement obligations for the nine months ended September 30, 2012 is shown below:

	For the nine months ended
	September 30, 2012
Asset retirement obligations, January 1, 2012	2,208,867
Additions and revisions	-
Settlement and disposals	-
Accretion expense	135,923
Asset retirement obligation, September 30, 2012	2,344,790

XML

Subsequent Event

9 Months Ended

Sep. 30, 2012

Subsequent Event [Text Block]

9	Subsequent Event
	On October 9, 2012, the company amended the certain securities purchase agreement with TCA Global Credit Master Fund, LP and purchased back 1,764,706 common shares formerly issued to TCA for an aggregate amount of $150,000.
	On October 31, 2012 the Company sold an additional $1 million debenture to TCA Global Credit Master Fund, LP pursuant to the financing agreement dated December 29, 2011 (Note 4).

XML

Notes Payable (Tables)

9 Months Ended

Sep. 30, 2012

Schedule Of Notes Payable And Long-term Debt [Table Text Block]

	September 30, 2012		December 31, 2011
	$		$
Note payable – Citizens Bank of Oklahoma	255,921		422,465
Note payable – TCA Global Credit Master Fund	1,000,000		-
Discount on TCA Global Credit Master Fund note	(134,595	)	-
Note payable – Dune Energy (Note 5)	-		157,017
Note payable – Leede Financial	406,567		373,045
Total third-party notes payable and long-term debt	1,527,893		952,527
Debenture payable – Palo Verde (Note 5)	2,000,000		-
Discount on Palo Verde debt	(834,420	)	-
Note payable – TPC Energy	414,183		164,183
Discount on TPC Energy Note	(19,455	)	-
Note payable – Mike Paulk	472,222		500,000
Note payable - Other	21,728		21,728
Total related party notes payable and long-term debt	2,054,258		685,911
Total notes payable and long-term debt	3,582,151		1,638,438
Less: Current portion	(2,416,571	)	(1,638,438	)
Total notes payable and long-term debt, net of current portion	1,165,580		-

XML

Notes Payable (Narrative) (Details) (USD $)	9 Months Ended
	Sep. 30, 2012
Notes Payable 1	$ 500,000
Notes Payable 2	6.00%
Notes Payable 3	12.00%
Notes Payable 4	475,500
Notes Payable 5	24,500
Notes Payable 6	166,543
Notes Payable 7	300,000
Notes Payable 8	12,500
Notes Payable 9	10.00%
Notes Payable 10	95,662
Notes Payable 11	204,338
Notes Payable 12	40,155
Notes Payable 13	164,183
Notes Payable 14	250,000
Notes Payable 15	250,000
Notes Payable 16	50.00%
Notes Payable 17	39,619
Notes Payable 18	500,000
Notes Payable 19	10.00%
Notes Payable 20	27,778
Notes Payable 21	3,000,000
Notes Payable 22	1,000,000
Notes Payable 23	65.00%
Notes Payable 24	1,000,000
Notes Payable 25	10.00%
Notes Payable 26	5.00%
Notes Payable 27	195,440
Notes Payable 28	273,833
Notes Payable 29	1,000,000
Notes Payable 30	10.00%
Notes Payable 31	5.00%
Notes Payable 32	1,000,000
Notes Payable 33	333,333
Notes Payable 34	497,000
Notes Payable 35	111,167
Notes Payable 36	157,500
Notes Payable 37	22,905
Notes Payable 38	117,489
Notes Payable 39	17,313
Notes Payable 40	373,045
Notes Payable 41	12.00%
Notes Payable 42	406,567
Notes Payable 43	$ 33,521

XML

Schedule Of Notes Payable And Long-term Debt (Details) (USD $)	9 Months Ended
	Sep. 30, 2012
Notes Payable Schedule Of Notes Payable And Long-term Debt 1	$ 255,921
Notes Payable Schedule Of Notes Payable And Long-term Debt 2	422,465
Notes Payable Schedule Of Notes Payable And Long-term Debt 3	1,000,000
Notes Payable Schedule Of Notes Payable And Long-term Debt 4	0
Notes Payable Schedule Of Notes Payable And Long-term Debt 5	(134,595)
Notes Payable Schedule Of Notes Payable And Long-term Debt 6	0
Notes Payable Schedule Of Notes Payable And Long-term Debt 7	0
Notes Payable Schedule Of Notes Payable And Long-term Debt 8	157,017
Notes Payable Schedule Of Notes Payable And Long-term Debt 9	406,567
Notes Payable Schedule Of Notes Payable And Long-term Debt 10	373,045
Notes Payable Schedule Of Notes Payable And Long-term Debt 11	1,527,893
Notes Payable Schedule Of Notes Payable And Long-term Debt 12	952,527
Notes Payable Schedule Of Notes Payable And Long-term Debt 13	2,000,000
Notes Payable Schedule Of Notes Payable And Long-term Debt 14	0
Notes Payable Schedule Of Notes Payable And Long-term Debt 15	(834,420)
Notes Payable Schedule Of Notes Payable And Long-term Debt 16	0
Notes Payable Schedule Of Notes Payable And Long-term Debt 17	414,183
Notes Payable Schedule Of Notes Payable And Long-term Debt 18	164,183
Notes Payable Schedule Of Notes Payable And Long-term Debt 19	(19,455)
Notes Payable Schedule Of Notes Payable And Long-term Debt 20	0
Notes Payable Schedule Of Notes Payable And Long-term Debt 21	472,222
Notes Payable Schedule Of Notes Payable And Long-term Debt 22	500,000
Notes Payable Schedule Of Notes Payable And Long-term Debt 23	21,728
Notes Payable Schedule Of Notes Payable And Long-term Debt 24	21,728
Notes Payable Schedule Of Notes Payable And Long-term Debt 25	2,054,258
Notes Payable Schedule Of Notes Payable And Long-term Debt 26	685,911
Notes Payable Schedule Of Notes Payable And Long-term Debt 27	3,582,151
Notes Payable Schedule Of Notes Payable And Long-term Debt 28	1,638,438
Notes Payable Schedule Of Notes Payable And Long-term Debt 29	(2,416,571)
Notes Payable Schedule Of Notes Payable And Long-term Debt 30	(1,638,438)
Notes Payable Schedule Of Notes Payable And Long-term Debt 31	1,165,580
Notes Payable Schedule Of Notes Payable And Long-term Debt 32	$ 0

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash flows from operating activities:
Net loss	$ (2,566,288)	$ (168,698)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation, depletion and amortization	244,506	314,574
Accretion of asset retirement obligation	135,923	141,316
Foreign exchange (gain) loss	484,438	(395,900)
Noncash compensation expense	397,787	274,787
Amortization of deferred financing costs	287,040	0
Amortization of debt discount	285,403	0
Gain on settlement of debt	(56,962)	0
Changes in components of working capital:
Accounts receivable	(169,062)	(77,004)
Oil inventory	(3,070)	(5,705)
Prepaid expenses and other current assets	(20,589)	(13,138)
Accounts payable, accrued liabilities and interest	(152,254)	88,289
Net cash provided by (used in) operating activities	(1,133,128)	158,521
Cash flows from investing activities:
Purchase and development of oil and gas properties	(1,183,008)	(131,872)
Net cash used in investing activities	(1,183,008)	(131,872)
Cash flows from financing activities:
Payment of notes payable	(1,326,047)	(371,448)
Payment of notes payable-related party	(27,778)	(181,062)
Proceeds from issuance of notes payable	1,451,627	125,869
Proceeds from issuance of notes payable- related party	2,250,000	500,000
Shares issued for private placement	420,000	0
Payment of deferred financing costs	(115,000)	(85,000)
Net cash provided by (used in) financing activities	2,652,802	(11,641)
Increase in cash and cash equivalents	336,666	15,008
Cash beginning of period	0	8,658
Cash end of period	336,666	23,666
Supplemental disclosures:
Interest paid, net of capitalized interest	267,907	129,398
Taxes paid	5,000	20,000
Non cash investing and financing activities:
Debt issued for restricted cash	497,000	0
Purchase of working interest through issuance of a note payable	0	226,847
Purchase of oil and gas properties in accounts payable	1,450,635	0
Deferred financing cost due to warrants issued	68,046	0
Debt discount due to liquidation rights transferred	39,619	0
Deferred financing cost due to common shares issued	110,776	0
Debt discount due to common shares issued	129,240	0
Debt discount on fees related to TCA debt	100,000	0
Related party debt discount due to conversion option and warrants issued	$ 881,314	$ 0

XML

Convertible Debentures

9 Months Ended

Sep. 30, 2012

Convertible Debentures [Text Block]

5	Convertible Debentures
	On August 4, 2009 the Company re-purchased and retired $7.895 million, plus $2.1 million accrued and unpaid interest, of its 8% Secured Debentures held by Dune Energy, Inc. (including release of collateral rights), acquired Dune’s interest in producing wells and certain leasehold rights in the Bayou Couba field, resumed operations of the Bayou Couba field, and settled outstanding issues between the companies, which net to $2.1 million payable to Dune. In exchange, the Company assigned a portion of certain deep rights held by the Company valued at $93,000 and paid Dune $1 million at the closing and issued a note payable of $300,000 payable in six consecutive quarterly payments of $50,000 each, with the first installment due and payable 90 days after resuming operations of the field. The first installment was timely paid. The note payable to Dune of $157,000 was settled for $105,000 on August 13, 2012 and a gain on settlement of debt of $52,000 was recorded in the third quarter of 2012.
	On August 13, 2012, the Company entered into a Securities Purchase Agreement with Palo Verde Acquisitions, LLC, pursuant to which the Company sold to Palo Verde (1) a $2,000,000 12% unsecured, convertible Debenture due August 13, 2014 (the "Palo Verde Debenture") and (2) warrants to purchase up to 20,000,000 shares of common stock of the Company at an exercise price of US$0.23 per share and expiring on August 13, 2014 (the "Warrants"). The aggregate consideration paid to the Company by Palo Verde for the Palo Verde Debenture and the Warrants was $2,000,000.
	Interest on the outstanding principal amount of the Palo Verde Debenture will accrue at a rate of 12% per annum, and is payable by the Company on a quarterly basis. At the Company's election, interest may be payable by the Company in shares of common stock of the Company in lieu of cash. The entire principal amount of the Palo Verde Debenture is due on August 13, 2014. The Company may not prepay any portion of the principal amount of the Palo Verde Debenture without the prior written consent of Palo Verde.
	At any time prior to the payment of the Palo Verde Debenture in full, Palo Verde may elect, in its sole discretion, to convert all or part of the principal amount of the Palo Verde Debenture into shares of common stock of the Company at a conversion rate of US$0.10 per share of common stock. Notwithstanding the foregoing, Palo Verde may not convert any principal amount of the Palo Verde Debenture into common shares of the Company if, following such conversion, Palo Verde and its affiliates would own more than 19.9% of the number of shares of common stock of the Company then outstanding (the "Beneficial Ownership Limitation"). The same Beneficial Ownership Limitation applies to the exercise by Palo Verde of any Warrants. The Palo Verde Debenture contains customary adjustment provisions for certain corporate events, such as the payment of stock dividends and stock splits. The Palo Verde Debenture also contains customary events of default.

The Company analyzed the convertible debt and the warrants issued for derivative accounting consideration under ASC 815 “Derivatives and Hedging” and determined that derivative accounting is not applicable.

The Company further analyzed the convertible debt for a beneficial conversion feature under ASC 470-20 on the date of the note and determined that a beneficial conversion feature exists. The intrinsic value of the beneficial conversion feature was determined to be $140,657 and was recorded as debt discount.

In addition, the relative fair value of the warrants was measured using the Black-Scholes Option Pricing Model (see Note 7). The relative fair value was determined to be $740,657. Total value of the beneficial conversion feature and the relative fair value of warrants is $881,314, which was recorded as debt discount. As of September 30, 2012, $46,894 of debt discount has been amortized.

Pursuant to the Palo Verde Purchase Agreement, Palo Verde may purchase from the Company an additional $1,000,000 12% convertible debenture and additional warrants to purchase up to 10,000,000 shares of common stock of the Company at an exercise price of US$0.23 per share (such additional debenture and additional warrants, the "Additional Securities") for a total payment of an additional $1,000,000. Prior to the consummation of any such additional purchase and pursuant to the Palo Verde Purchase Agreement, the Company has agreed to hold an annual stockholders meeting in 2012 to, among other things, submit to the stockholders a proposal to permit Palo Verde to convert the Palo Verde Debenture and exercise the Warrants (and to convert and exercise, respectively, any Additional Securities purchased) without the limitation of the Beneficial Ownership Limitation.

XML

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details)	9 Months Ended
	Sep. 30, 2012
Stock-based Compensation, Stock Options And Warrants Schedule Of Share-based Payment Award, Stock Options, Valuation Assumptions 1	5
Stock-based Compensation, Stock Options And Warrants Schedule Of Share-based Payment Award, Stock Options, Valuation Assumptions 2	0.88%
Stock-based Compensation, Stock Options And Warrants Schedule Of Share-based Payment Award, Stock Options, Valuation Assumptions 3	279.87%
Stock-based Compensation, Stock Options And Warrants Schedule Of Share-based Payment Award, Stock Options, Valuation Assumptions 4	2
Stock-based Compensation, Stock Options And Warrants Schedule Of Share-based Payment Award, Stock Options, Valuation Assumptions 5	0.27%
Stock-based Compensation, Stock Options And Warrants Schedule Of Share-based Payment Award, Stock Options, Valuation Assumptions 6	238.08%
Stock-based Compensation, Stock Options And Warrants Schedule Of Share-based Payment Award, Stock Options, Valuation Assumptions 7	2
Stock-based Compensation, Stock Options And Warrants Schedule Of Share-based Payment Award, Stock Options, Valuation Assumptions 8	0.25%
Stock-based Compensation, Stock Options And Warrants Schedule Of Share-based Payment Award, Stock Options, Valuation Assumptions 9	317.86%

XML

Going Concern, Liquidity and Capital Resources (Narrative) (Details) (USD $)	9 Months Ended
	Sep. 30, 2012
Going Concern, Liquidity And Capital Resources 1	$ 2,566,288
Going Concern, Liquidity And Capital Resources 2	8,463,712
Going Concern, Liquidity And Capital Resources 3	$ 22,794,669