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, 2014; 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, Suite2010, Tulsa, Oklahoma74136
(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, 2014, 29,280,085 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)	3
	Condensed Consolidated Balance Sheets – September 30, 2014 and December 31, 2013	3
	Condensed Consolidated Statements of Operations Three Months and Nine Months Ended September 30, 2014 and September 30, 2013	4
	Condensed Consolidated Statements of Cash Flows Nine Months Ended September 30, 2014 and September 30, 2013	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	24
PART II – OTHER INFORMATION
Item 6.	Exhibits	25

2

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

AMERICAN NATURAL ENERGY CORPORATION

Condensed Consolidated Balance Sheets (Unaudited)

	September 30, 2014		December 31, 2013
	$		$
ASSETS
Current assets:
Cash and cash equivalents	267		82,295
Accounts receivable – joint interest billing	3,595		12,505
Accounts receivable – oil and gas sales	124,477		163,321
Prepaid expenses and other	52,988		47,661
Oil inventory	20,833		20,833
Deferred costs	239,241		-
Total current assets	441,401		326,615
Proved oil and natural gas properties, full cost method of accounting, net of accumulated depletion,      depreciation, amortization and impairment of $23,376,865 and $22,989,672	17,877,014		18,263,854
Unproved oil and natural gas properties	775,774		724,266
Equipment and other fixed assets, net of accumulated depreciation of $1,177,193 and $1,172,907	1,038		5,324
Total assets	19,095,227		19,320,059
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities	4,751,213		4,254,749
Revenue payable	480,104		3,522,279
Accounts payable – related parties	114,226		99,733
Accrued interest	203,153		532,392
Insurance note payable	36,384		31,102
Notes payable – related parties net of discounts of $0 and $590,015 respectively	765,911		3,220,896
Note payable, net of discounts of $0 and $256,023 respectively(Note 3)	2,708,766		2,320,523
Taxes due on dissolution of subsidiary	32,752		32,752
Total current liabilities	9,092,509		14,014,426
Debenture payable – related parties, net of discounts of $59,246 and $0 respectively	3,579,877		-
Note payable, net of discounts of $140,195 and $0 respectively	1,149,366		-
Derivative liability (Note 6)	7,914,338		-
Asset retirement obligation (Note 7)	2,344,489		2,165,521
Total liabilities	24,080,579		16,179,947
Commitments and contingencies
Stockholders' equity :
Common stock          Authorized – 250,000,000 shares with par value of $0.001          – 29,280,085 and 26,405,085 shares issued and outstanding respectively	29,280		26,405
Treasury stock	(150,000	)	(150,000	)
Additional paid-in capital	25,299,077		25,874,430
Accumulated deficit, since January 1, 2002 (in conjunction with the quasi-           Reorganization stated capital was reduced by an accumulated deficit of           $2,015,495)	(34,246,346	)	(26,693,360	)
Accumulated other comprehensive income	4,082,637		4,082,637
Total stockholders' equity	(4,985,352	)	3,140,112
Total liabilities and stockholders' equity	19,095,227		19,320,059

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 Other Comprehensive Loss (Unaudited)

For the three-month and nine-month periods ended September 30, 2014 and 2013

	Three months ended September 30,				Nine months ended September 30,
	2014		2013		2014		2013
	$		$		$		$
Revenues:
Oil and gas sales	379,780		841,458		1,425,277		2,713,947
Operations income	-		11,923		-		39,989
	379,780		853,381		1,425,277		2,753,936
Expenses:
Lease operating expense	179,336		227,256		460,194		742,996
Production taxes	18,057		92,747		98,911		270,136
General and administrative	330,869		336,416		978,947		1,193,489
Foreign exchange (gain) loss	(16,384	)	229,110		(15,468	)	(463,176	)
Depletion, depreciation and amortization – oil and gas properties	103,828		206,937		387,193		696,487
Accretion of asset retirement obligation	59,656		32,903		178,968		129,488
Depreciation and amortization – other assets	1,090		4,881		4,286		14,643
Total expenses	676,452		1,130,250		2,093,031		2,584,063
Other (Income) Expense
Interest and financing costs	143,210		319,302		261,681		842,174
Related party interest	346,843		263,254		1,022,970		752,313
Loss on derivative	6,427,146		-		6,427,146		-
Gain on settlement of disputed revenue payables	-		-		(2,052,451	)	-
Loss on debt extinguishment	817,396		-		1,225,886		39,953
Total other (income) expense	7,734,595		582,556		6,885,232		1,634,440
Net loss	(8,031,267	)	(859,425	)	(7,552,986	)	(1,464,567	)
Other comprehensive income (loss)– net of tax:
Foreign exchange translation	-		202,545		-		(463,176	)
Other comprehensive income (loss)	-		202,545		-		(463,176	)
Comprehensive loss	(8,031,267	)	(656,880	)	(7,552,986	)	(1,927,743	)
Basic and diluted loss per share	(0.28	)	(0.03	)	(0.28	)	(0.06	)
Weighted average number of shares outstanding
Basic	28,748,835		26,405,085		27,194,920		26,405,085
Diluted	28,748,835		26,405,085		27,194,920		26,405,085

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, 2014 and 2013

	Nine months ended September 30,
	2014		2013
	$		$
Cash flows from operating activities:
Net income (loss)	(7,552,986	)	(1,464,567	)
Adjustments to reconcile net income(loss) to net cash provided by (used in) operating activities:
Depreciation, depletion and amortization	391,479		711,130
Accretion of asset retirement obligation	178,968		129,488
Foreign exchange loss (gain)	(15,468	)	(463,176	)
Amortization of deferred financing costs	59,175		145,661
Amortization of debt discount	147,327		953,837
Related party amortization of debt discount	530,769		9,994
Stock issued in payment of interest	2,500		-
Loss on debt extinguishment	1,225,886		39,953
Gain/loss on derivative liability	6,427,146		-
Gain on settlement of disputed revenue	(2,052,451	)	-
Changes in components of working capital:
Accounts receivable	47,754		(40,155	)
Oil inventory	-		4,676
Prepaid expenses and other current assets	35,523		18,446
Accounts payable, revenues payable, accrued liabilities and interest	918,213		(185,486	)
Net cash provided by (used in) operating activities	343,835		(140,199	)
Cash flows from investing activities:
Purchase and development of oil and gas properties	(46,944	)	(130,847	)
Net cash used in investing activities	(46,944	)	(130,847	)
Cash flows from financing activities:
Payment of notes payable	(994,232	)	(1,811,700	)
Payment of notes payable-related party	(45,000	)	(74,444	)
Proceeds from issuance of notes payable	861,232		1,749,568
Proceeds from issuance of notes payable- related party	-		505,000
Payment of deferred financing costs	(200,919	)	(125,000	)
Net cash provided by (used in) financing activities	(378,919	)	243,424
Increase in cash and cash equivalents	(82,028	)	(27,622	)
Cash beginning of period	82,295		31,177
Cash end of period	267		3,555

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, 2014 and 2013

	Nine months ended September 30,
	2014	2013
	$	$
Supplemental disclosures:
Interest paid	235,804	330,663
Taxes paid	-	7,500
Non cash investing and financing activities:
Purchase of oil and gas properties in accounts payable	4,917	139,143
Debt issued in settlement of revenue payables	989,751	-
Financing Fees for shares	52,500	606,320
Debt discount due to fees related to Hillair debt	132,428	-
Derivative liability Palo Verde debt	627,478	-
Interest Transferred to debt principle	741,385	-
Prepaid insurance financed with debt	40,850	-
Asset retirement obligation revision	-	39,573

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, 2014 and 2013

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, 2014 and 2013 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, 2014 are not indicative of the results that may be expected for the full year ending December 31, 2014.

Reclassification of Prior Period Statements

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

2 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 $7,552,986 for the nine months ended September 30, 2014. The Company has a working capital deficit of $8,651,108 and an accumulated deficit of $34,246,346 at September 30, 2014 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.

7

American Natural Energy Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)

September 30, 2014 and 2013

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.

3	Notes Payable
	Notes payable and long-term debt as of September 30, 2014 and December 31, 2013 consisted of the following:

	September 30, 2014		December 31, 2013
	$		$
Note payable – Citizens Bank of Oklahoma	64,688		65,921
Note payable – Eaton Oil Tools	32,239		40,075
Note payable – TCA Global Credit Master Fund	-		2,096,610
Discount on TCA Global Credit Master Fund note	-		(256,023	)
Note payable – Leede Financial	358,472		373,940
Note payable – Hillair Capital Investments	2,589,561		-
Discount on Hillair Capital Investment debt	(140,195	)
Note payable – Louisiana Oil Properties	989,751		-
Total third-party notes payable and long-term debt	3,894,516		2,320,523
Debenture payable – Palo Verde (Note 4)	3,639,123		3,000,000
Discount on Palo Verde debt	(59,247	)	(590,015	)
Note payable – TPC Energy	414,183		414,183
Note payable – Mike Paulk	330,000		375,000
Note payable – Other	21,728		21,728
Total related party notes payable and long-term debt	4,345,787		3,220,896
Total notes payable and long-term debt	8,240,304		5,541,419

8

American Natural Energy Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)

September 30, 2014 and 2013

Less: Current portion	(3,511,061	)	(5,541,419	)
Total notes payable and long-term debt, net of current portion	4,729,243		-

As of September 30, 2014 and December 31, 2013, the Company had an outstanding note to TPC Energy with a principal balance of $164,183. On March 31, 2014, the Company extended the maturity of the note until March 31, 2015. The company evaluated the extension under FASB ASC 470-50 and FASB ASC 470-60 and concluded the revised term constituted a debt modification, rather than a debt extinguishment or a troubled debt restructuring. There were no other changes to the terms of the note.

As of September 30, 2014, the Company had another outstanding note to TPC Energy with a principal balance of $250,000. On March 11, 2014, the Company extended the maturity date of the note until March 11, 2015. There were no other changes to the terms of the note and TPC Energy will continue to receive the 50% of the company’s interests in its share of the Liquidation Agents account distributions for an extra year until March 11, 2015.The TPC note is included in Notes Payable – Related Parties on the balance sheet as of September 30, 2014. The company evaluated the extension under FASB ASC 470-50 and FASB ASC 470-60 and concluded the revised term constituted a debt modification, rather than a debt extinguishment or a troubled debt restructuring.

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%. On February 17, 2014, the Company extended the note payable until February 17, 2015. There were no other changes to terms of the note. 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. Principal payments totaling $45,000 were made during the nine months ended September 30, 2014.

On June 30, 2013, the Company extended the maturity date of note payable to Leede Financial to December 31, 2013. The other terms of the note payable remain unchanged. The Company evaluated the application of ASC 470-50 and ASC 470-60 and concluded the revised term constituted a debt modification. As the note is denominated in Canadian dollars, the Company adjusted the face value of the note based on fluctuations in exchange rates and recorded a foreign exchange gain of $15,468 during the nine months ended September 30, 2014.

On August 1 2013, the Company converted its $48,000 accounts payable balance to Eaton Oil Tools to a note payable. Monthly payments of $4,119 which include interest at the rate of 6% per annum were to be made through August 2014. During the nine months ended September 30, 2014, the Company paid $7,836 of principal payments on the loan. At November 14, 2014, eight payments were past due.

9

American Natural Energy Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)

September 30, 2014 and 2013

On April 14, 2014 the Company entered into a loan agreement with Pinon Energy providing for an advance of $250,000 to be used for working capital purposes. The loan was payable upon the earlier of a re-financing of the Company’s secured debt or August 14, 2014 in the amount of $268,000 plus interest at a rate of 12% per annum. The note and all interest totaling $274,799 were paid on July 7, 2014. Pinon Energy also received 250,000 shares of Company common stock as additional interest.

On June 24, 2014, the Company entered into a $989,751 note payable with Louisiana Oil Properties, Inc. together with simple interest at 4% per annum due on or before October 31, 2014. This promissory note was the result of a settlement of disputed revenue payables resulting in a gain recognized by the Company of $2,052,451.

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.

On January 29, 2014, the Company entered into the Sixth Amendment to the Securities Purchase Agreement with TCA Global Credit Master Fund LP. The amendment provides for interest only payments pursuant to existing amended and restated debenture for the month of December 2013, that all previous outstanding principal and accrued and unpaid interest, an accommodation fee $200,000 for entering into this sixth Amendment and all outstanding Redemption Premium fees comprised the agreed upon outstanding amount of $2,196,609. Principal and interest in the amount of $371,459 was due monthly, inclusive of all fees and redemption amounts. The Company evaluated the amendment under FASB ASC 470-50 and determined that the modification was substantial and qualified as a debt extinguishment. The additional $200,000 accommodation fee and the remaining unamortized debt discount of $208,490 and were recorded as a loss on debt extinguishment.

During the nine months ended September 30, 2014, payments totaling $645,211 were made to TCA debts. Prior to the sixth amendment, $47,533 of debt discount were amortized.

Prior to July 3, 2014, TCA Global Credit Master Fund LP (“TCA”) assigned to Hillair Capital Investments, LP (“Hillair”), the Second Replacement, Amended and Restated Senior Secured Redeemable Debenture, with a current principal amount of $1,753,600 ($1,651,399 principle and $102,262 in interest) issued to TCA by the Company as of June 28, 2013 (the “Amended Debenture”), along with certain mortgages, dated as of December 29, 2011 and September 4, 2012, and as filed in St. Charles Parish, Louisiana (the “Mortgages”). On July 3, 2014, the Company and Hillair also entered into an Amendment Agreement (the “Amendment”), amending the Amended Debenture by (i) increasing the interest rate to 16% per annum, (ii) extending the maturity date to January 1, 2016 and (iii) revising the monthly principal payments to be quarterly principal payments.

10

American Natural Energy Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)

September 30, 2014 and 2013

On July 3, 2014 the Company entered into a Securities Purchase Agreement (the "Hillair Purchase Agreement") with Hillair Capital Investments, LP ("Hillair"), pursuant to which the Company (i) issued to Hillair an 8% Original Issue Discount Senior Secured Convertible Debenture (the “OID Debenture”) in the principal amount of $835,899 convertible into shares of the Company’s common stock at $0.10 per share (subject to adjustment therein); and (ii) issued to Hillair 28,000,000 Series A Common Stock purchase Warrants exercisable for 5 years at $0.12 per share (subject to adjustment therein) and 19,641,002 Series B Common Stock purchase Warrants exercisable for 2 years at $0.10 per share (subject to adjustment therein). Of the $835,899 only $611,232 was received in cash by the company after the OID and other financing fees. The lender paid $44,997 in deferred financing costs directly to other parties.

The Company evaluated the conversion feature and warrants and determined that it should be accounted for as derivative liabilities based on a reset provision clause that allows the conversion or exercise price of the instruments to be adjusted for any sale of common stock at a lower price than the existing price.

The Company evaluated the transaction under FASB ASC 470-50 and FASB ASC 470-60 and concluded the revised terms constituted a debt extinguishment, rather than a debt modification or a troubled debt restructuring. The fair value of the warrants issued along with the fees paid directly to Hillair were recorded as a loss on extinguishment of debt of $817,396, of which $727,286 was the fair value of the warrants issued to Hillair. The fair value of the conversion feature of $132,428 was recorded as a debt discount to the loan.

The Company’s obligations under the OID Debenture are secured by substantially all of the assets of the Company and its wholly-owned subsidiary, Gothic Resources, Inc. (“Gothic”) pursuant to the terms of a Security Agreement, dated as of July 3, 2014 (the “Security Agreement”), and Gothic has guaranteed the performance of the Company’s obligations under the terms of a Subsidiary Guarantee Agreement executed by Gothic on the same date (the “Subsidiary Guarantee”). In addition, the Company’s obligations to the OID Debenture and the Amended Debenture are secured by the Mortgage Documents.

Interest on the Amended Debenture and on the OID Debenture is payable by the Company on a quarterly basis commencing January 1, 2015. Principal on the Amended Debenture and on the OID

Debenture is payable quarterly commencing on March 1, 2015 with both debentures maturing on January 1, 2016. The Company may prepay the Amended Debenture with a 3 day notice. Subject to the Equity Conditions set forth in the OID Debenture, the OID Debenture is redeemable at any time after the 6 month anniversary of the OID Debenture at 120% of the outstanding principal balance.

At any time prior to the payment of the OID Debenture in full, Hillair may elect, in its sole discretion, to convert all or part of the principal amount of the OID Debenture into shares of common stock of the Company at a conversion rate of US$0.10 per share (subject to adjustment therein). The OID

Debenture contains customary adjustment provisions for certain corporate events, such as the payment of stock dividends and stock splits. The OID Debenture also contains customary events of default.

11

American Natural Energy Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)

September 30, 2014 and 2013

Pursuant to the Hillair Purchase Agreement and until the 12 month anniversary of the closing on the OID Debenture, Hillair may purchase from the Company additional Debentures with an aggregate subscription amount of up to $2,500,000 (for a principal amount of $2,800,000) and up to 28,000,000 Series A Warrants and 19,641,002 Series B Warrants consistent with the terms set forth above.

During the nine months ended September 30, 2014 the company recorded a total debt discount of $221,989 ($89,561 OID and $132,428 from the embedded conversion feature) and recorded amortization of $81,794.

Deferred Financing Costs

During the nine months ended September 30, 2014, the Company paid in cash $200,919, issued stock at a fair value of $52,500 and the lender paid $44,997 directly to the other parties for deferred financing costs. For the nine months ended September 30, 2014 and 2013, amortization of the deferred financing costs totaled $59,175 and 145,661, respectively.

4 Convertible Debentures

On December 31, 2012, the Company sold a $1 million 12% unsecured convertible debt due December 31, 2014 to Palo Verde Acquisitions LLC. As of December 31, 2012, the Company had received consideration of $500,000 related to this debt. In January 2013, the Company collected the remaining debt proceeds of $500,000 related to the $1,000,000 convertible Palo Verde debt issued on December 31, 2012. On July 1, 2014, the due date of the convertible debt was extended to January 2, 2016 with all accrued and unpaid interest totaling $639,123 being added to the outstanding principal amount. 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. The Company amortized $530,769 of debt discount during the nine months ended September 30, 2014.

On August 14, 2013, the exchange that the Company was listed on allowed for stock transactions to be entered into at a price lower than $0.10 per share. At this date, this triggered derivative accounting based on a reset provision clause that allowed the conversion price of the instruments to be adjusted for any sale of common stock at a lower price than the existing conversion price. The initial derivative liability on the conversion feature was $627,478 and was recorded as a day 1 reduction of additional paid-in-capital.

5 Common Stock

On July 18, 2014 the Company issued a total 2,875,000 shares of its common stock. 2,625,000 shares, valued at $52,500, were in payment of financing fees and 250,000 shares, valued at $2,500, were in consideration of interest.

12

American Natural Energy Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)

September 30, 2014 and 2013

6 Fair Value of Financial Instruments and Derivatives

As defined in ASC 820, fair value is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based upon observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement), pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable and are valued using models or other valuation methodologies (level 2 measurement), and the lowest priority to unobservable inputs (level 3 measurement). There were no changes in valuation techniques or reclassifications of fair value measurements between levels 1, 2 or 3 during the nine months ended September 30, 2014.

The carrying values of the Company’s accounts receivable, accounts payable and accrued liabilities represent the estimated fair value due to the short-term nature of the accounts.

The estimated fair value of the Company’s non-current derivative liabilities, which are related to common shares issuable pursuant to convertible debentures and to warrants issued in connection with those debentures, were estimated using a various option pricing model utilizing assumptions related to the contractual term of the instruments, estimated volatility of the price of the Company’s common stock, interest rates, among other items (ASC 820, Fair Value Measurements (“ASC 820”) fair value hierarchy Level 3). A comparison of the assumptions used in calculating estimated fair value of derivative liabilities at the issue date and as of September 30, 2014 is as follows:

		Upon		September 30,
		Issuance		2014
Warrants
Volatility – range		281.39%		294.99%
Contractual term		2 - 5 years		2 - 5 years
Exercise price	$	0.10 - $0.12	$	0.10 - $0.12
Number of warrants in aggregate		47,641,002		47,641,002
Shares Upon Conversion of Convertible Debt
		261.51% -
Volatility – range		305.08%		328.76%
Contractual term		1 - 2 years		1 - 2 years
Exercise price	$	0.10	$	0.10
Number of shares in aggregate		38,358,998		38,358,998

13

American Natural Energy Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)

September 30, 2014 and 2013

The following table provides a summary of the changes in fair value, including net transfers in and/or out, of the derivative financial instruments, measured at fair value on a recurring basis using significant unobservable inputs:

Balance at December 31, 2013	$	-
Fair value of derivative liabilities at issuance		1,487,192
Derivative losses included in other expense		6,427,146
Balance at September 30, 2014	$	7,914,338

Fair Value Measurements

As required by ASC 820, financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The following table summarizes the valuation of our investments and financial instruments by ASC 820 pricing levels as of September 30, 2014:

	Fair value measurement
	Level 1	Level 2	Level 3	Total
Derivative liabilities	-	-	7,914,338	7,914,338
Total	-	-	7,914,338	7,914,338

7 Asset retirement obligations

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 as of September 30, 2014 and December 31, 2013 are shown below.

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American Natural Energy Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)

September 30, 2014 and 2013

	September 30, 2014	December 31, 2013
	$	$
Asset retirement obligations, January 1	2,165,521	2,392,369
Additions and revisions	-	(370,566	)
Settlements and disposals	-	(116,898	)
Accretion expense	178,968	260,616
Asset retirement obligations, December 31	2,344,489	2,165,521

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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 $7,553,000 for the nine months ended September 30, 2014 and a net loss of $3,147,000 and $3,318,000 for the years ended December 31, 2013 and 2012. We have a working capital deficiency and an accumulated deficit at September 30, 2014 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, 2013 includes an explanatory paragraph which states that we have sustained a substantial loss in 2013 and have a working capital deficiency and an accumulated deficit at December 31, 2013 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, 2014 and September 30, 2013

     We recorded a net loss of $8,031,000 during the three months ended September 30, 2014 compared to a net loss of $859,000 for the three months ended September 30, 2013. During the three months ended September 30, 2014, our revenues were comprised of oil and gas sales totaling $380,000 compared with oil and gas sales of $841,000 during the same period of 2013. Oil and gas prices decreased as well as production for the third quarter of 2014 as compared to the third quarter of 2013. Our net average daily production for the three month period ended September 30, 2014 decreased by 50% over the same period of the prior year, from 82 net barrels of oil equivalent per day to 41 net barrels of oil equivalent per day. The weighted average price was $99.99 per barrel of oil equivalent for the three months ended September 30, 2014 compared to $111.03 per barrel of oil equivalent for the same period in 2013. Production from our existing wells is subject to fluctuation based upon which zones of wells are in production.

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     We had operating expenses of $676,000 for the three months ended September 30, 2014 compared to operating expenses of $1,130,000 for the three months ended September 30, 2013. Our general and administrative expenses were $331,000 for the three months ended September 30, 2014 compared to $336,000 for the three months ended September 30, 2013, a decrease of $5,000.

     Interest and financing costs decreased for the three months ended September 30, 2014 compared to the same period in 2013 at $490,000 and $583,000 respectively. Interest and financing costs were lower in the third quarter of 2014 due to lower amortization of note discounts and deferred financing costs and increased debt. Loss on embedded derivatives for the three months ended September 30, 2014 was $6,427,146 with no comparable loss in the same period in 2013.

     Lease operating expenses of $179,000, production taxes of $18,000 and depletion, depreciation and amortization of $165,000 during the three months ended September 30, 2014 changed from $227,000, $93,000, and $245,000, respectively, during the three months ended September 30, 2014. Lease operating expenses were lower for the third quarter of 2014 compared to the same period in 2013 due to decreased production. Production taxes decreased for the third quarter of 2014 as a result of decreased production. The decrease in depletion, depreciation and amortization for the third quarter of 2014 is a result of decreased production.

     During the three months ended September 30, 2014, we had a foreign exchange gain of $16,000 compared to a $229,000 foreign exchange loss for the three months ended September 30, 2013. Our foreign exchange gains and losses arise out of an inter-company indebtedness we owe to our wholly-owned subsidiary, Gothic, which is payable in Canadian dollars, in addition to a note owed to a third party denominated in Canadian dollars. The foreign exchange gain for the three months ended September 30, 2014 was caused by the strengthening of the US dollar against the Canadian dollar. The gain related to the note denominated in Canadian dollars was $16,000 for the three months ended September 30, 2014

A Comparison of Operating Results For The Nine Months Ended September 30, 2014 and September 30, 2013

     We recorded net loss of $7,553,000 during the nine months ended September 30, 2014 compared to a net loss of $1,465,000 for the nine months ended September 30, 2013. During the nine months ended September 30, 2014, our revenues were comprised of oil and gas sales totaling $1,425,000 compared with oil and gas sales of $2,714,000 during the same period of 2013. Oil and gas prices and production decreased for the first nine months of 2014 as compared to the same period of 2013. Our net average daily production for the nine month period ended September 30, 2014 decreased by 44% over the same period of the prior year, from 91 net barrels of oil equivalent per day to 51 net barrels of oil equivalent per day. Oil and gas prices decreased for the nine month period ended September 30, 2014 over the same period of the prior year. The weighted average price was $102.52 and $108.51 per barrel of oil equivalent for the nine months ended 2014 and 2013 respectively. Production from our existing wells is subject to fluctuation based upon which zones of wells are in production.

17

     We had operating expenses of $2,093,000 for the nine months ended September 30, 2014 compared to operating expenses of $2,584,000 for the nine months ended September 30, 2013. Our general and administrative expenses were $979,000 for the nine months ended September 30, 2014 compared to $1,193,000 for the nine months ended September 30, 2013. General and administrative expenses were higher for the period ended September 30, 2013 primarily due to higher professional fees and higher payroll expense.

     Interest and financing costs decreased for the nine months ended September 30, 2014 compared to the same period in 2013 at $1,284,000 and $1,594,000 respectively. Interest and financing costs were lower in the first three quarters of 2014 primarily as a result of lower amortization of note discounts. Loss on embedded derivatives for the nine months ended September 30, 2014 was $6,427,146 with no comparable loss in the same period in 2013.

     Lease operating expenses of $460,000, production taxes of $99,000 and depletion, depreciation and amortization of $570,000 during the nine months ended September 30, 2014 changed from $743,000, $270,000, and $841,000, respectively, during the nine months ended September 30, 2014. Lease operating expenses were lower for the first three quarters of 2014 compared to the same period in 2013 due to decreased production. Production taxes decreased for the first three quarters of 2014 as a result of decreased production. The decrease in depletion, depreciation and amortization for the first three quarters of 2014 is a result of decreased production.

     During the nine months ended September 30, 2014, we had a foreign exchange gain of $15,000 compared to a $463,000 foreign exchange gain for the nine months ended September 30, 2013. Our foreign exchange gains and losses arise out of an inter-company indebtedness we owe to our wholly-owned subsidiary, Gothic, which is payable in Canadian dollars, in addition to a note owed to a third party denominated in Canadian dollars. The foreign exchange gain for the nine months ended September 30, 2014 was caused by the strengthening of the US dollar against the Canadian dollar. The gain related to the note denominated in Canadian dollars was $15,000 for the nine months ended September 30, 2014.

     During the nine months ended September 30, 2014 we also amended the loan with TCA which qualified as debt extinguishment and $408,000 was recorded as a loss on debt extinguishment. Additionally, the TCA debt was acquired by Hillair Capital resulting in an additional loss on extinguishment of $817,396. We recorded a gain of $2,052,000 for the nine months ended September 30, 2014 as the result of the settlement of disputed revenue payables to a royalty owner. During the nine months ended September 30, 2013 we also extended the repayment terms and rights on a related party note which qualified as debt extinguishment. The additional rights were valued at $39,953 and were recorded as a loss on debt extinguishment.

Liquidity and Capital Resources

18

General

     To date, our production has not been sufficient to fund our operations and drilling program. At September 30, 2014, we do not have any available borrowing capacity and have negative working capital of approximately $8.7 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.

A Comparison of Cash Flow For The Nine Months Ended September 30, 2014 and September 30, 2013

     Our net cash provided by operating activities was $343,000 for the nine months ended September 30, 2014 as compared to net cash used in operating activities of $140,000 for the nine months ended September 30, 2013, an increase of $483,000. The increase in net cash provided by operating activities for the nine months ended September 30, 2014 was due to an increase in working capital of $1,204,000 and a decrease in net loss of $6,088,000 and offset by an increase in noncash items of $5,368,000. Changes in working capital items had the effect of increasing cash flows from operating activities by $1,001,000 during the nine months ended September 30, 2014 mainly due to an increase in accounts payable and accrued liabilities of $918,000 and along with an increase in accounts receivable and other current assets of $83,000. Changes in working capital items had the effect of decreasing cash flows from operating activities by $203,000 during the nine months ended September 30, 2013 due to an increase in accounts receivable and other current assets of $17,000 along with a decrease in accounts payable and accrued liabilities of $186,000.

     We used $47,000 of net cash in investing activities during the nine months ended September 30, 2014 compared to net cash used of $131,000 in 2013. The cash used in investing in 2014 and 2013 was for the purchase and development of oil and gas properties.

      Our net cash used in financing activities was $379,000 for the nine months ended September 30, 2014 compared to net cash provided of $243,000 for the same period in 2013. For the nine months ended September 30, 2014, net cash outflows from financing activities were a result of the issuance of notes of $861,000 offset by payments against outstanding notes of $1,039,000, of which $45,000 was to related parties, and payments of deferred financing costs of $201,000. For the nine months ended September 30, 2013, net cash inflows from financing activities were a result of the issuance of notes, net of fees, of $2,254,000, of which $505,000 was to related parties, offset by payments against outstanding notes of $1,886,000, of which $74,000 was to related parties, and payments of deferred financing costs of $125,000.

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     We have no other commitments to expend additional funds for drilling activities for the rest of 2014.

How We Have Financed Our Activities

     Our activities since 2002 have been financed primarily from sales of debt and equity securities and drilling participations. These transactions during this period of time included the following, among other previously reported financing transactions we entered into during the period:

     We entered into a financing agreement with TCA Global Credit Master Fund, LP during the first quarter of 2012. Proceeds of the financing were used for the drilling and completion of wells included in the Company’s inventory of proved undeveloped reserves (“PUD”). We have a commitment for a total amount of $3.0 million, before fees and expenses, through the issuance of a series of $1.0 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 advanced exceed 65% of the drilling and completion cost of the PUD’s with the balance provided by our generated funds. During the year ended December 31, 2012, three tranches of TCA debt totaling $3 million were issued. The total note principal balance of TCA debts and related unamortized debt discounts on December 31, 2012 are $1,608,973 and $186,791, respectively.

     In March 2013, the fourth tranche TCA debt of $1 million was issued. The debt is due on March 1, 2014 and is payable monthly with a mandatory redemption fee equal to 10% and interest of 5%. Out of $1 million debt proceeds, $500,000 was withheld for the future development of wells, $55,550 was paid to TCA for various fees, and net proceeds of $944,450 were received by the Company. In July 2013 an additional tranche of $750,000 was drawn by the Company under the same terms with net proceeds of $705,825 received by the Company after the payment of fees.

     The Company also agreed to pay TCA $100,000 in cash in lieu of a stock bonus related to the issuance of the note. Fees paid and to be paid in cash totaling $155,550 to TCA Global Credit Master Fund, LP were recorded as a debt discount.

     In July 2013, the fifth tranche TCA debt of $750,000 was issued. The debt is due on August 1, 2014 and is payable monthly with a mandatory redemption fee equal to 10% and interest of 5%. Fees totaling $44,175 were paid with net proceeds of $705,825 received by the Company. Along with the issuance of the fifth tranche TCA debt, the Company combined all the outstanding TCA debts into one debt by entering into an amended debt agreement with TCA. The amended debt has a principal of $2,290,548, accrues interest at 5% per annum, and is due on August 1, 2014. From August 1, 2013 through November we paid the amended TCA debt in monthly installments of $230,451.

20

     On January 29, 2014, the Company entered into the Sixth Amendment to the Securities Purchase Agreement with TCA Global Credit Master Fund LP. The amendment provides for interest only payments pursuant to existing amended and restated debenture for the month of December 2013, that all previous outstanding principal and accrued and unpaid interest, an accommodation fee $200,000 for entering into this sixth Amendment and all outstanding Redemption Premium fees comprised the agreed upon outstanding amount of $2,196,609. Principal and interest in the amount of $371,459 was due monthly, inclusive of all fees and redemption amounts. The Company evaluated the amendment under FASB ASC 470-50 and determined that the modification was substantial and qualified as a debt extinguishment. The additional $200,000 accommodation fee and the remaining unamortized debt discount of $208,490 and were recorded as a loss on debt extinguishment. Principal payments of $645,211for the six months ended June 30, 2014 along with accrued interest have been made.

     On July 31, 2012, we received final approval from the TSX Venture Exchange for the issuance of 7,000,000 shares of our common stock in a private placement. All such shares were sold at $0.06 in the private placement, resulting in gross proceeds of $420,000.

     On August 13, 2012, we entered into a Securities Purchase Agreement with Palo Verde Acquisitions, LLC (“Palo Verde”), pursuant to which we sold to Palo Verde (1) a $2,000,000 12% unsecured Convertible Debenture due August 13, 2014 (the “First Palo Verde Debenture”) and (2) warrants to purchase up to 20,000,000 shares of our common stock at a purchase price of $0.23 per share and expiring on August 13, 2014. The aggregate consideration received by us from Palo Verde for the First Palo Verde Debenture and the 20 million warrants was $2,000,000.

     On December 31, 2012, we sold to Palo Verde (1) a $1,000,000 12% unsecured Convertible Debenture due December 31, 2014 (the “Second Palo Verde Debenture”) and (2) warrants to purchase up to 10,000,000 shares of our common stock at a purchase price of $0.23 per share and expiring on December 31, 2014. The aggregate consideration received by us from Palo Verde for the Second Palo Verde Debenture and the 10 million warrants was $1,000,000. On July 1, 2014, the due date of the convertible debt was extended to January 2, 2016.

     On July 3, 2014 we entered into a Securities Purchase Agreement (the "Hillair Purchase Agreement") with Hillair Capital Investments, LP ("Hillair"), pursuant to which we (i) issued to Hillair an 8% Original Issue Discount Senior Secured Convertible Debenture (the “OID Debenture”) in the principal amount of $835,899 convertible into shares of the Company’s common stock at $0.10 per share (subject to adjustment therein); and (ii) issued to Hillair 28,000,000 Series A Common Stock purchase Warrants exercisable for 5 years at $0.12 per share (subject to adjustment therein) and 19,641,002 Series B Common Stock purchase Warrants exercisable for 2 years at $0.10 per share (subject to adjustment therein) .

     Prior to July 3, 2014, TCA Global Credit Master Fund LP (“TCA”) assigned to Hillair the Second Replacement, Amended and Restated Senior Secured Redeemable Debenture, with a current principal amount of $1,753,600 issued to TCA by us as of June 28, 2013 (the “Amended Debenture”), along with certain mortgages, dated as of December 29, 2011 and September 4, 2012, and as filed in St. Charles Parish, Louisiana (the “Mortgages”). On July 3, 2014, we and Hillair also entered into an Amendment Agreement (the “Amendment”), amending the Amended Debenture by (i) increasing the interest rate to 16% per annum, (ii) extending the maturity date to January 1, 2016 and (iii) revising the monthly principal payments to be quarterly principal payments.

21

     Our obligations under the OID Debenture are secured by substantially all of the assets of the Company and its wholly-owned subsidiary, Gothic Resources, Inc. (“Gothic”) pursuant to the terms of a Security Agreement, dated as of July 3, 2014 (the “Security Agreement”), and Gothic has guaranteed the performance of the Company’s obligations under the terms of a Subsidiary Guarantee Agreement executed by Gothic on the same date (the “Subsidiary Guarantee”). In addition, our obligations to the OID Debenture and the Amended Debenture are secured by the Mortgage Documents.

     Interest on the Amended Debenture and on the OID Debenture is payable by us on a quarterly basis commencing January 1, 2015. Principal on the Amended Debenture and on the OID

     Debenture is payable quarterly commencing on March 1, 2015 with both debentures maturing on January 1, 2016. We may prepay the Amended Debenture with a 3 day notice. Subject to the Equity Conditions set forth in the OID Debenture, the OID Debenture is redeemable at any time after the 6 month anniversary of the OID Debenture at 120% of the outstanding principal balance.

     At any time prior to the payment of the OID Debenture in full, Hillair may elect, in its sole discretion, to convert all or part of the principal amount of the OID Debenture into shares of our common stock at a conversion rate of US$0.10 per share (subject to adjustment therein). The OID Debenture contains customary adjustment provisions for certain corporate events, such as the payment of stock dividends and stock splits. The OID Debenture also contains customary events of default.

     Pursuant to the Hillair Purchase Agreement and until the 12 month anniversary of the closing on the OID Debenture, Hillair may purchase from us additional Debentures with an aggregate subscription amount of up to $2,500,000 (for a principal amount of $2,800,000) and up to 28,000,000 Series A Warrants and 19,641,002 Series B Warrants consistent with the terms set forth above.

     We also reached agreement with Palo Verde Acquisitions LLC to extend the maturity of its 12% convertible debenture in the amount of $2 million and its 12% convertible debenture in the amount of $1 million until January 2, 2016 with all accrued and unpaid interest to date being added to the outstanding principal amount. The conversion price of $0.10 remains unchanged.

     Additionally, the expiration date of warrants held by Palo Verde was extended to January 2, 2018 and the exercise price reduced to $0.12 per share.

22

Future Capital Requirements and Resources

     At September 30, 2014, we do not have any available borrowing capacity under existing credit facilities and our current assets are $441,000 compared with current liabilities of $7.8 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 2014. In addition, we have substantial need for capital to develop our oil and gas prospects. At September 30, 2014, we have no commitments for additional capital to fund drilling activities in 2014.

     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 2014 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.

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

23

- 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, 2013 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 2014 and beyond, to differ materially from those expressed in any forward-looking statements made by or on our behalf.

     Any future trading prices of our 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.

24

      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, 2013, 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. See our discussion at “Item 9A (T) - Controls and Procedures” on Form 10-K for the year ended December 31, 2013.

     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.

25

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, 2014	/S/ Michael K. Paulk
	Michael K. Paulk
	President and Chief Executive Officer
	/S/ Steven P. Ensz
	Steven P. Ensz
	Principal Financial and Accounting Officer

26

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, 2014	/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, 2014	/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, 2014 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, 2014

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, 2014 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, 2014

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.

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Convertible Debentures

9 Months Ended

Sep. 30, 2014

Convertible Debentures [Text Block]

4 Convertible Debentures

On December 31, 2012, the Company sold a $1 million 12% unsecured convertible debt due December 31, 2014 to Palo Verde Acquisitions LLC. As of December 31, 2012, the Company had received consideration of $500,000 related to this debt. In January 2013, the Company collected the remaining debt proceeds of $500,000 related to the $1,000,000 convertible Palo Verde debt issued on December 31, 2012. On July 1, 2014, the due date of the convertible debt was extended to January 2, 2016 with all accrued and unpaid interest totaling $639,123 being added to the outstanding principal amount. 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. The Company amortized $530,769 of debt discount during the nine months ended September 30, 2014.

On August 14, 2013, the exchange that the Company was listed on allowed for stock transactions to be entered into at a price lower than $0.10 per share. At this date, this triggered derivative accounting based on a reset provision clause that allowed the conversion price of the instruments to be adjusted for any sale of common stock at a lower price than the existing conversion price. The initial derivative liability on the conversion feature was $627,478 and was recorded as a day 1 reduction of additional paid-in-capital.

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Notes Payable

9 Months Ended

Sep. 30, 2014

Notes Payable [Text Block]

3	Notes Payable
	Notes payable and long-term debt as of September 30, 2014 and December 31, 2013 consisted of the following:

	September 30, 2014		December 31, 2013
	$		$
Note payable – Citizens Bank of Oklahoma	64,688		65,921
Note payable – Eaton Oil Tools	32,239		40,075
Note payable – TCA Global Credit Master Fund	-		2,096,610
Discount on TCA Global Credit Master Fund note	-		(256,023	)
Note payable – Leede Financial	358,472		373,940
Note payable – Hillair Capital Investments	2,589,561		-
Discount on Hillair Capital Investment debt	(140,195	)
Note payable – Louisiana Oil Properties	989,751		-
Total third-party notes payable and long-term debt	3,894,516		2,320,523
Debenture payable – Palo Verde (Note 4)	3,639,123		3,000,000
Discount on Palo Verde debt	(59,247	)	(590,015	)
Note payable – TPC Energy	414,183		414,183
Note payable – Mike Paulk	330,000		375,000
Note payable – Other	21,728		21,728
Total related party notes payable and long-term debt	4,345,787		3,220,896
Total notes payable and long-term debt	8,240,304		5,541,419
Less: Current portion	(3,511,061	)	(5,541,419	)
Total notes payable and long-term debt, net of current portion	4,729,243		-

As of September 30, 2014 and December 31, 2013, the Company had an outstanding note to TPC Energy with a principal balance of $164,183. On March 31, 2014, the Company extended the maturity of the note until March 31, 2015. The company evaluated the extension under FASB ASC 470-50 and FASB ASC 470-60 and concluded the revised term constituted a debt modification, rather than a debt extinguishment or a troubled debt restructuring. There were no other changes to the terms of the note.

As of September 30, 2014, the Company had another outstanding note to TPC Energy with a principal balance of $250,000. On March 11, 2014, the Company extended the maturity date of the note until March 11, 2015. There were no other changes to the terms of the note and TPC Energy will continue to receive the 50% of the company’s interests in its share of the Liquidation Agents account distributions for an extra year until March 11, 2015.The TPC note is included in Notes Payable – Related Parties on the balance sheet as of September 30, 2014. The company evaluated the extension under FASB ASC 470-50 and FASB ASC 470-60 and concluded the revised term constituted a debt modification, rather than a debt extinguishment or a troubled debt restructuring.

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%. On February 17, 2014, the Company extended the note payable until February 17, 2015. There were no other changes to terms of the note. 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. Principal payments totaling $45,000 were made during the nine months ended September 30, 2014.

On June 30, 2013, the Company extended the maturity date of note payable to Leede Financial to December 31, 2013. The other terms of the note payable remain unchanged. The Company evaluated the application of ASC 470-50 and ASC 470-60 and concluded the revised term constituted a debt modification. As the note is denominated in Canadian dollars, the Company adjusted the face value of the note based on fluctuations in exchange rates and recorded a foreign exchange gain of $15,468 during the nine months ended September 30, 2014.

On August 1 2013, the Company converted its $48,000 accounts payable balance to Eaton Oil Tools to a note payable. Monthly payments of $4,119 which include interest at the rate of 6% per annum were to be made through August 2014. During the nine months ended September 30, 2014, the Company paid $7,836 of principal payments on the loan. At November 14, 2014, eight payments were past due.

On April 14, 2014 the Company entered into a loan agreement with Pinon Energy providing for an advance of $250,000 to be used for working capital purposes. The loan was payable upon the earlier of a re-financing of the Company’s secured debt or August 14, 2014 in the amount of $268,000 plus interest at a rate of 12% per annum. The note and all interest totaling $274,799 were paid on July 7, 2014. Pinon Energy also received 250,000 shares of Company common stock as additional interest.

On June 24, 2014, the Company entered into a $989,751 note payable with Louisiana Oil Properties, Inc. together with simple interest at 4% per annum due on or before October 31, 2014. This promissory note was the result of a settlement of disputed revenue payables resulting in a gain recognized by the Company of $2,052,451.

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.

On January 29, 2014, the Company entered into the Sixth Amendment to the Securities Purchase Agreement with TCA Global Credit Master Fund LP. The amendment provides for interest only payments pursuant to existing amended and restated debenture for the month of December 2013, that all previous outstanding principal and accrued and unpaid interest, an accommodation fee $200,000 for entering into this sixth Amendment and all outstanding Redemption Premium fees comprised the agreed upon outstanding amount of $2,196,609. Principal and interest in the amount of $371,459 was due monthly, inclusive of all fees and redemption amounts. The Company evaluated the amendment under FASB ASC 470-50 and determined that the modification was substantial and qualified as a debt extinguishment. The additional $200,000 accommodation fee and the remaining unamortized debt discount of $208,490 and were recorded as a loss on debt extinguishment.

During the nine months ended September 30, 2014, payments totaling $645,211 were made to TCA debts. Prior to the sixth amendment, $47,533 of debt discount were amortized.

Prior to July 3, 2014, TCA Global Credit Master Fund LP (“TCA”) assigned to Hillair Capital Investments, LP (“Hillair”), the Second Replacement, Amended and Restated Senior Secured Redeemable Debenture, with a current principal amount of $1,753,600 ($1,651,399 principle and $102,262 in interest) issued to TCA by the Company as of June 28, 2013 (the “Amended Debenture”), along with certain mortgages, dated as of December 29, 2011 and September 4, 2012, and as filed in St. Charles Parish, Louisiana (the “Mortgages”). On July 3, 2014, the Company and Hillair also entered into an Amendment Agreement (the “Amendment”), amending the Amended Debenture by (i) increasing the interest rate to 16% per annum, (ii) extending the maturity date to January 1, 2016 and (iii) revising the monthly principal payments to be quarterly principal payments.

On July 3, 2014 the Company entered into a Securities Purchase Agreement (the "Hillair Purchase Agreement") with Hillair Capital Investments, LP ("Hillair"), pursuant to which the Company (i) issued to Hillair an 8% Original Issue Discount Senior Secured Convertible Debenture (the “OID Debenture”) in the principal amount of $835,899 convertible into shares of the Company’s common stock at $0.10 per share (subject to adjustment therein); and (ii) issued to Hillair 28,000,000 Series A Common Stock purchase Warrants exercisable for 5 years at $0.12 per share (subject to adjustment therein) and 19,641,002 Series B Common Stock purchase Warrants exercisable for 2 years at $0.10 per share (subject to adjustment therein). Of the $835,899 only $611,232 was received in cash by the company after the OID and other financing fees. The lender paid $44,997 in deferred financing costs directly to other parties.

The Company evaluated the conversion feature and warrants and determined that it should be accounted for as derivative liabilities based on a reset provision clause that allows the conversion or exercise price of the instruments to be adjusted for any sale of common stock at a lower price than the existing price.

The Company evaluated the transaction under FASB ASC 470-50 and FASB ASC 470-60 and concluded the revised terms constituted a debt extinguishment, rather than a debt modification or a troubled debt restructuring. The fair value of the warrants issued along with the fees paid directly to Hillair were recorded as a loss on extinguishment of debt of $817,396, of which $727,286 was the fair value of the warrants issued to Hillair. The fair value of the conversion feature of $132,428 was recorded as a debt discount to the loan.

The Company’s obligations under the OID Debenture are secured by substantially all of the assets of the Company and its wholly-owned subsidiary, Gothic Resources, Inc. (“Gothic”) pursuant to the terms of a Security Agreement, dated as of July 3, 2014 (the “Security Agreement”), and Gothic has guaranteed the performance of the Company’s obligations under the terms of a Subsidiary Guarantee Agreement executed by Gothic on the same date (the “Subsidiary Guarantee”). In addition, the Company’s obligations to the OID Debenture and the Amended Debenture are secured by the Mortgage Documents.

Interest on the Amended Debenture and on the OID Debenture is payable by the Company on a quarterly basis commencing January 1, 2015. Principal on the Amended Debenture and on the OID

Debenture is payable quarterly commencing on March 1, 2015 with both debentures maturing on January 1, 2016. The Company may prepay the Amended Debenture with a 3 day notice. Subject to the Equity Conditions set forth in the OID Debenture, the OID Debenture is redeemable at any time after the 6 month anniversary of the OID Debenture at 120% of the outstanding principal balance.

At any time prior to the payment of the OID Debenture in full, Hillair may elect, in its sole discretion, to convert all or part of the principal amount of the OID Debenture into shares of common stock of the Company at a conversion rate of US$0.10 per share (subject to adjustment therein). The OID

Debenture contains customary adjustment provisions for certain corporate events, such as the payment of stock dividends and stock splits. The OID Debenture also contains customary events of default.

Pursuant to the Hillair Purchase Agreement and until the 12 month anniversary of the closing on the OID Debenture, Hillair may purchase from the Company additional Debentures with an aggregate subscription amount of up to $2,500,000 (for a principal amount of $2,800,000) and up to 28,000,000 Series A Warrants and 19,641,002 Series B Warrants consistent with the terms set forth above.

During the nine months ended September 30, 2014 the company recorded a total debt discount of $221,989 ($89,561 OID and $132,428 from the embedded conversion feature) and recorded amortization of $81,794.

Deferred Financing Costs

During the nine months ended September 30, 2014, the Company paid in cash $200,919, issued stock at a fair value of $52,500 and the lender paid $44,997 directly to the other parties for deferred financing costs. For the nine months ended September 30, 2014 and 2013, amortization of the deferred financing costs totaled $59,175 and 145,661, respectively.

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Condensed Consolidated Balance Sheets (USD $)	Sep. 30, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 267	$ 82,295
Accounts receivable - joint interest billing	3,595	12,505
Accounts receivable - oil and gas sales	124,477	163,321
Prepaid expenses and other	52,988	47,661
Oil inventory	20,833	20,833
Deferred costs	239,241	0
Total current assets	441,401	326,615
Proved oil and natural gas properties, full cost method of accounting, net of accumulated depletion, depreciation, amortization and impairment of $23,376,865 and $22,989,672	17,877,014	18,263,854
Unproved oil and natural gas properties	775,774	724,266
Equipment and other fixed assets, net of accumulated depreciation of $1,177,193 and $1,172,907	1,038	5,324
Total assets	19,095,227	19,320,059
Current liabilities:
Accounts payable and accrued liabilities	4,751,213	4,254,749
Revenue payable	480,104	3,522,279
Accounts payable - related parties	114,226	99,733
Accrued interest	203,153	532,392
Insurance note payable	36,384	31,102
Notes payable - related parties net of discounts of $0 and $590,015 respectively	765,911	3,220,896
Note payable, net of discounts of $0 and $256,023 respectively	2,708,766	2,320,523
Taxes due on dissolution of subsidiary	32,752	32,752
Total current liabilities	9,092,509	14,014,426
Debenture payable - related parties, net of discounts of $59,246 and $0 respectively	3,579,877	0
Note payable, net of discounts of $140,195 and $0 respectively	1,149,366	0
Derivative liability	7,914,338	0
Asset retirement obligation	2,344,489	2,165,521
Total liabilities	24,080,579	16,179,947
Commitments and contingencies	0	0
Stockholders' equity :
Common stock Authorized - 250,000,000 shares with par value of $0.001 - 29,280,085 and 26,405,085 shares issued and outstanding respectively	29,280	26,405
Treasury stock	(150,000)	(150,000)
Additional paid-in capital	25,299,077	25,874,430
Accumulated deficit, since January 1, 2002 (in conjunction with the quasi- Reorganization stated capital was reduced by an accumulated deficit of $2,015,495)	(34,246,346)	(26,693,360)
Accumulated other comprehensive income	4,082,637	4,082,637
Total stockholders' equity	(4,985,352)	3,140,112
Total liabilities and stockholders' equity	$ 19,095,227	$ 19,320,059

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Significant accounting policies

9 Months Ended

Sep. 30, 2014

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, 2014 and 2013 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, 2014 are not indicative of the results that may be expected for the full year ending December 31, 2014.

Reclassification of Prior Period Statements

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

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Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) (USD $)	9 Months Ended
	Sep. 30, 2014
Fair Value Of Financial Instruments And Derivatives Schedule Of Fair Value, Assets And Liabilities Measured On Recurring Basis 1	$ 0
Fair Value Of Financial Instruments And Derivatives Schedule Of Fair Value, Assets And Liabilities Measured On Recurring Basis 2	1,487,192
Fair Value Of Financial Instruments And Derivatives Schedule Of Fair Value, Assets And Liabilities Measured On Recurring Basis 3	6,427,146
Fair Value Of Financial Instruments And Derivatives Schedule Of Fair Value, Assets And Liabilities Measured On Recurring Basis 4	$ 7,914,338

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Schedule of Change in Asset Retirement Obligation (Details) (USD $)	9 Months Ended
	Sep. 30, 2014
Asset Retirement Obligations Schedule Of Change In Asset Retirement Obligation 1	$ 2,165,521
Asset Retirement Obligations Schedule Of Change In Asset Retirement Obligation 2	2,392,369
Asset Retirement Obligations Schedule Of Change In Asset Retirement Obligation 3	0
Asset Retirement Obligations Schedule Of Change In Asset Retirement Obligation 4	(370,566)
Asset Retirement Obligations Schedule Of Change In Asset Retirement Obligation 5	0
Asset Retirement Obligations Schedule Of Change In Asset Retirement Obligation 6	(116,898)
Asset Retirement Obligations Schedule Of Change In Asset Retirement Obligation 7	178,968
Asset Retirement Obligations Schedule Of Change In Asset Retirement Obligation 8	260,616
Asset Retirement Obligations Schedule Of Change In Asset Retirement Obligation 9	2,344,489
Asset Retirement Obligations Schedule Of Change In Asset Retirement Obligation 10	$ 2,165,521

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Going Concern, Liquidity and Capital Resources

9 Months Ended

Sep. 30, 2014

Going Concern, Liquidity and Capital Resources [Text Block]

2 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 $7,552,986 for the nine months ended September 30, 2014. The Company has a working capital deficit of $8,651,108 and an accumulated deficit of $34,246,346 at September 30, 2014 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.

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Accumulated Depreciation, Depletion and Amortization, Proved Oil and Gas Properties	$ 23,376,865	$ 22,989,672
Equipment and other fixed assets, net of accumulated depreciation	1,177,193	1,172,907
Notes payable related parties net of discounts	0	590,015
Note payable, net of discounts	0	256,023
Debenture payable-related parties, net of discounts	59,246	0
Note payable, net of discounts Non current	140,195	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	29,280,085	26,405,085
Common Stock, Shares, Outstanding	29,280,085	26,405,085
Quasi-reorganization stated capital reduced by an accumulated deficit	$ 2,015,495	$ 2,015,495

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Notes Payable (Narrative) (Details) (USD $)	9 Months Ended
	Sep. 30, 2014 D Y M
Notes Payable 1	$ 164,183
Notes Payable 2	250,000
Notes Payable 3	50.00%
Notes Payable 4	500,000
Notes Payable 5	10.00%
Notes Payable 6	45,000
Notes Payable 7	15,468
Notes Payable 8	48,000
Notes Payable 9	4,119
Notes Payable 10	6.00%
Notes Payable 11	7,836
Notes Payable 12	250,000
Notes Payable 13	268,000
Notes Payable 14	12.00%
Notes Payable 15	274,799
Notes Payable 16	250,000
Notes Payable 17	989,751
Notes Payable 18	4.00%
Notes Payable 19	2,052,451
Notes Payable 20	3,000,000
Notes Payable 21	1,000,000
Notes Payable 22	65.00%
Notes Payable 23	200,000
Notes Payable 24	2,196,609
Notes Payable 25	371,459
Notes Payable 26	200,000
Notes Payable 27	208,490
Notes Payable 28	645,211
Notes Payable 29	47,533
Notes Payable 30	1,753,600
Notes Payable 31	1,651,399
Notes Payable 32	102,262
Notes Payable 33	16.00%
Notes Payable 34	8.00%
Notes Payable 35	835,899
Notes Payable 36	$ 0.10
Notes Payable 37	28,000,000
Notes Payable 38	5
Notes Payable 39	$ 0.12
Notes Payable 40	19,641,002
Notes Payable 41	2
Notes Payable 42	$ 0.10
Notes Payable 43	835,899
Notes Payable 44	611,232
Notes Payable 45	44,997
Notes Payable 46	817,396
Notes Payable 47	727,286
Notes Payable 48	132,428
Notes Payable 49	3
Notes Payable 50	6
Notes Payable 51	120.00%
Notes Payable 52	$ 0.10
Notes Payable 53	12
Notes Payable 54	2,500,000
Notes Payable 55	2,800,000
Notes Payable 56	28,000,000
Notes Payable 57	19,641,002
Notes Payable 58	221,989
Notes Payable 59	89,561
Notes Payable 60	132,428
Notes Payable 61	81,794
Notes Payable 62	200,919
Notes Payable 63	52,500
Notes Payable 64	44,997
Notes Payable 65	$ 59,175
Notes Payable 66	145,661

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Document and Entity Information	9 Months Ended
	Sep. 30, 2014	Nov. 14, 2014
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2014
Trading Symbol	anr
Entity Registrant Name	American Natural Energy Corp
Entity Central Index Key	0000870732
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		29,280,085
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well Known Seasoned Issuer	No
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3

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Convertible Debentures (Narrative) (Details) (USD $)	9 Months Ended
	Sep. 30, 2014
Convertible Debentures 1	$ 1,000,000
Convertible Debentures 2	12.00%
Convertible Debentures 3	500,000
Convertible Debentures 4	500,000
Convertible Debentures 5	1,000,000
Convertible Debentures 6	639,123
Convertible Debentures 7	530,769
Convertible Debentures 8	$ 0.10
Convertible Debentures 9	$ 627,478
Convertible Debentures 10	1

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Condensed Consolidated Statements of Operations and Other Comprehensive Loss (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Revenues:
Oil and gas sales	$ 379,780	$ 841,458	$ 1,425,277	$ 2,713,947
Operations income	0	11,923	0	39,989
Total Revenue	379,780	853,381	1,425,277	2,753,936
Expenses:
Lease operating expense	179,336	227,256	460,194	742,996
Production taxes	18,057	92,747	98,911	270,136
General and administrative	330,869	336,416	978,947	1,193,489
Foreign exchange loss (gain)	(16,384)	229,110	(15,468)	(463,176)
Depletion, depreciation and amortization - oil and gas properties	103,828	206,937	387,193	696,487
Accretion of asset retirement obligation	59,656	32,903	178,968	129,488
Depreciation and amortization - other assets	1,090	4,881	4,286	14,643
Total expenses	676,452	1,130,250	2,093,031	2,584,063
Other (Income) Expense
Interest and financing costs	143,210	319,302	261,681	842,174
Related party interest	346,843	263,254	1,022,970	752,313
Gain/loss on derivative liability	6,427,146	0	6,427,146	0
Gain on settlement of disputed revenue payables	0	0	(2,052,451)	0
Loss on debt extinguishment	817,396	0	1,225,886	39,953
Total other (income) expense	7,734,595	582,556	6,885,232	1,634,440
Net loss	(8,031,267)	(859,425)	(7,552,986)	(1,464,567)
Other comprehensive income (loss)- net of tax:
Foreign exchange translation	0	202,545	0	(463,176)
Other comprehensive income (loss)	0	202,545	0	(463,176)
Comprehensive loss	$ (8,031,267)	$ (656,880)	$ (7,552,986)	$ (1,927,743)
Basic and diluted loss per share	$ (0.28)	$ (0.03)	$ (0.28)	$ (0.06)
Basic	28,748,835	26,405,085	27,194,920	26,405,085
Diluted	28,748,835	26,405,085	27,194,920	26,405,085

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Asset retirement obligations

9 Months Ended

Sep. 30, 2014

Asset retirement obligations [Text Block]

7 Asset retirement obligations

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 as of September 30, 2014 and December 31, 2013 are shown below.

	September 30, 2014	December 31, 2013
	$	$
Asset retirement obligations, January 1	2,165,521	2,392,369
Additions and revisions	-	(370,566	)
Settlements and disposals	-	(116,898	)
Accretion expense	178,968	260,616
Asset retirement obligations, December 31	2,344,489	2,165,521

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Fair Value of Financial Instruments and Derivatives

9 Months Ended

Sep. 30, 2014

Fair Value of Financial Instruments and Derivatives [Text Block]

6 Fair Value of Financial Instruments and Derivatives

As defined in ASC 820, fair value is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based upon observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement), pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable and are valued using models or other valuation methodologies (level 2 measurement), and the lowest priority to unobservable inputs (level 3 measurement). There were no changes in valuation techniques or reclassifications of fair value measurements between levels 1, 2 or 3 during the nine months ended September 30, 2014.

The carrying values of the Company’s accounts receivable, accounts payable and accrued liabilities represent the estimated fair value due to the short-term nature of the accounts.

The estimated fair value of the Company’s non-current derivative liabilities, which are related to common shares issuable pursuant to convertible debentures and to warrants issued in connection with those debentures, were estimated using a various option pricing model utilizing assumptions related to the contractual term of the instruments, estimated volatility of the price of the Company’s common stock, interest rates, among other items (ASC 820, Fair Value Measurements (“ASC 820”) fair value hierarchy Level 3). A comparison of the assumptions used in calculating estimated fair value of derivative liabilities at the issue date and as of September 30, 2014 is as follows:

		Upon		September 30,
		Issuance		2014
Warrants
Volatility – range		281.39%		294.99%
Contractual term		2 - 5 years		2 - 5 years
Exercise price	$	0.10 - $0.12	$	0.10 - $0.12
Number of warrants in aggregate		47,641,002		47,641,002
Shares Upon Conversion of Convertible Debt
		261.51% -
Volatility – range		305.08%		328.76%
Contractual term		1 - 2 years		1 - 2 years
Exercise price	$	0.10	$	0.10
Number of shares in aggregate		38,358,998		38,358,998

The following table provides a summary of the changes in fair value, including net transfers in and/or out, of the derivative financial instruments, measured at fair value on a recurring basis using significant unobservable inputs:

Balance at December 31, 2013	$	-
Fair value of derivative liabilities at issuance		1,487,192
Derivative losses included in other expense		6,427,146
Balance at September 30, 2014	$	7,914,338

Fair Value Measurements

As required by ASC 820, financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The following table summarizes the valuation of our investments and financial instruments by ASC 820 pricing levels as of September 30, 2014:

	Fair value measurement
	Level 1	Level 2	Level 3	Total
Derivative liabilities	-	-	7,914,338	7,914,338
Total	-	-	7,914,338	7,914,338

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Schedule of Derivative Liabilities at Fair Value (Details) (USD $)	9 Months Ended
	Sep. 30, 2014
Fair Value Of Financial Instruments And Derivatives Schedule Of Derivative Liabilities At Fair Value 1	$ 0
Fair Value Of Financial Instruments And Derivatives Schedule Of Derivative Liabilities At Fair Value 2	0
Fair Value Of Financial Instruments And Derivatives Schedule Of Derivative Liabilities At Fair Value 3	7,914,338
Fair Value Of Financial Instruments And Derivatives Schedule Of Derivative Liabilities At Fair Value 4	7,914,338
Fair Value Of Financial Instruments And Derivatives Schedule Of Derivative Liabilities At Fair Value 5	0
Fair Value Of Financial Instruments And Derivatives Schedule Of Derivative Liabilities At Fair Value 6	0
Fair Value Of Financial Instruments And Derivatives Schedule Of Derivative Liabilities At Fair Value 7	7,914,338
Fair Value Of Financial Instruments And Derivatives Schedule Of Derivative Liabilities At Fair Value 8	$ 7,914,338

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Common Stock (Narrative) (Details) (USD $)	9 Months Ended
	Sep. 30, 2014
Common Stock 1	2,875,000
Common Stock 2	2,625,000
Common Stock 3	$ 52,500
Common Stock 4	250,000
Common Stock 5	$ 2,500

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Asset retirement obligations (Tables)

9 Months Ended

Sep. 30, 2014

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

	September 30, 2014	December 31, 2013
	$	$
Asset retirement obligations, January 1	2,165,521	2,392,369
Additions and revisions	-	(370,566	)
Settlements and disposals	-	(116,898	)
Accretion expense	178,968	260,616
Asset retirement obligations, December 31	2,344,489	2,165,521

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Notes Payable (Tables)

9 Months Ended

Sep. 30, 2014

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

	September 30, 2014		December 31, 2013
	$		$
Note payable – Citizens Bank of Oklahoma	64,688		65,921
Note payable – Eaton Oil Tools	32,239		40,075
Note payable – TCA Global Credit Master Fund	-		2,096,610
Discount on TCA Global Credit Master Fund note	-		(256,023	)
Note payable – Leede Financial	358,472		373,940
Note payable – Hillair Capital Investments	2,589,561		-
Discount on Hillair Capital Investment debt	(140,195	)
Note payable – Louisiana Oil Properties	989,751		-
Total third-party notes payable and long-term debt	3,894,516		2,320,523
Debenture payable – Palo Verde (Note 4)	3,639,123		3,000,000
Discount on Palo Verde debt	(59,247	)	(590,015	)
Note payable – TPC Energy	414,183		414,183
Note payable – Mike Paulk	330,000		375,000
Note payable – Other	21,728		21,728
Total related party notes payable and long-term debt	4,345,787		3,220,896
Total notes payable and long-term debt	8,240,304		5,541,419
Less: Current portion	(3,511,061	)	(5,541,419	)
Total notes payable and long-term debt, net of current portion	4,729,243		-

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Fair Value of Financial Instruments and Derivatives (Tables)

9 Months Ended

Sep. 30, 2014

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Table Text Block]

		Upon		September 30,
		Issuance		2014
Warrants
Volatility – range		281.39%		294.99%
Contractual term		2 - 5 years		2 - 5 years
Exercise price	$	0.10 - $0.12	$	0.10 - $0.12
Number of warrants in aggregate		47,641,002		47,641,002
Shares Upon Conversion of Convertible Debt
		261.51% -
Volatility – range		305.08%		328.76%
Contractual term		1 - 2 years		1 - 2 years
Exercise price	$	0.10	$	0.10
Number of shares in aggregate		38,358,998		38,358,998

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

Balance at December 31, 2013	$	-
Fair value of derivative liabilities at issuance		1,487,192
Derivative losses included in other expense		6,427,146
Balance at September 30, 2014	$	7,914,338

Schedule of Derivative Liabilities at Fair Value [Table Text Block]

	Fair value measurement
	Level 1	Level 2	Level 3	Total
Derivative liabilities	-	-	7,914,338	7,914,338
Total	-	-	7,914,338	7,914,338

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Going Concern, Liquidity and Capital Resources (Narrative) (Details) (USD $)	9 Months Ended
	Sep. 30, 2014
Going Concern, Liquidity And Capital Resources 1	$ 7,552,986
Going Concern, Liquidity And Capital Resources 2	8,651,108
Going Concern, Liquidity And Capital Resources 3	$ 34,246,346

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Schedule of Carrying Values and Estimated Fair Values of Debt Instruments (Details) (USD $)	9 Months Ended
	Sep. 30, 2014 Y
Fair Value Of Financial Instruments And Derivatives Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments 1	281.39%
Fair Value Of Financial Instruments And Derivatives Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments 2	294.99%
Fair Value Of Financial Instruments And Derivatives Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments 3	$ 2
Fair Value Of Financial Instruments And Derivatives Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments 4	5
Fair Value Of Financial Instruments And Derivatives Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments 5	2
Fair Value Of Financial Instruments And Derivatives Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments 6	5
Fair Value Of Financial Instruments And Derivatives Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments 7	0.10
Fair Value Of Financial Instruments And Derivatives Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments 8	0.12
Fair Value Of Financial Instruments And Derivatives Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments 9	0.10
Fair Value Of Financial Instruments And Derivatives Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments 10	0.12
Fair Value Of Financial Instruments And Derivatives Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments 11	47,641,002
Fair Value Of Financial Instruments And Derivatives Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments 12	47,641,002
Fair Value Of Financial Instruments And Derivatives Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments 13	261.51%
Fair Value Of Financial Instruments And Derivatives Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments 14	0
Fair Value Of Financial Instruments And Derivatives Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments 15	305.08%
Fair Value Of Financial Instruments And Derivatives Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments 16	328.76%
Fair Value Of Financial Instruments And Derivatives Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments 17	1
Fair Value Of Financial Instruments And Derivatives Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments 18	2
Fair Value Of Financial Instruments And Derivatives Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments 19	1
Fair Value Of Financial Instruments And Derivatives Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments 20	2
Fair Value Of Financial Instruments And Derivatives Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments 21	0.10
Fair Value Of Financial Instruments And Derivatives Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments 22	0.10
Fair Value Of Financial Instruments And Derivatives Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments 23	38,358,998
Fair Value Of Financial Instruments And Derivatives Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments 24	$ 38,358,998

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Condensed Consolidated Statements of Cash Flows (USD $)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash flows from operating activities:
Net income (loss)	$ (7,552,986)	$ (1,464,567)
Adjustments to reconcile net income(loss) to net cash provided by (used in) operating activities:
Depreciation, depletion and amortization	391,479	711,130
Accretion of asset retirement obligation	178,968	129,488
Foreign exchange loss (gain)	(15,468)	(463,176)
Amortization of deferred financing costs	59,175	145,661
Amortization of debt discount	147,327	953,837
Related party amortization of debt discount	530,769	9,994
Stock issued in payment of interest	2,500	0
Loss on debt extinguishment	1,225,886	39,953
Gain/loss on derivative liability	6,427,146	0
Gain on settlement of disputed revenue	(2,052,451)	0
Changes in components of working capital:
Accounts receivable	47,754	(40,155)
Oil inventory	0	4,676
Prepaid expenses and other current assets	35,523	18,446
Accounts payable, revenues payable, accrued liabilities and interest	918,213	(185,486)
Net cash provided by (used in) operating activities	343,835	(140,199)
Cash flows from investing activities:
Purchase and development of oil and gas properties	(46,944)	(130,847)
Net cash used in investing activities	(46,944)	(130,847)
Cash flows from financing activities:
Payment of notes payable	(994,232)	(1,811,700)
Payment of notes payable-related party	(45,000)	(74,444)
Proceeds from issuance of notes payable	861,232	1,749,568
Proceeds from issuance of notes payable- related party	0	505,000
Payment of deferred financing costs	(200,919)	(125,000)
Net cash provided by (used in) financing activities	(378,919)	243,424
Increase in cash and cash equivalents	(82,028)	(27,622)
Cash beginning of period	82,295	31,177
Cash end of period	267	3,555
Supplemental disclosures:
Interest paid	235,804	330,663
Taxes paid	0	7,500
Non cash investing and financing activities:
Purchase of oil and gas properties in accounts payable	4,917	139,143
Debt issued in settlement of revenue payables	989,751	0
Financing Fees for shares	52,500	606,320
Debt discount due to fees related to Hillair debt	132,428	0
Derivative liability Palo Verde debt	627,478	0
Interest Transferred to debt principle	741,385	0
Prepaid insurance financed with debt	40,850	0
Asset retirement obligation revision	$ 0	$ 39,573

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Common Stock

9 Months Ended

Sep. 30, 2014

Common Stock [Text Block]

5 Common Stock

On July 18, 2014 the Company issued a total 2,875,000 shares of its common stock. 2,625,000 shares, valued at $52,500, were in payment of financing fees and 250,000 shares, valued at $2,500, were in consideration of interest.

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Schedule Of Notes Payable And Long-term Debt (Details) (USD $)	9 Months Ended
	Sep. 30, 2014
Notes Payable Schedule Of Notes Payable And Long-term Debt 1	$ 64,688
Notes Payable Schedule Of Notes Payable And Long-term Debt 2	65,921
Notes Payable Schedule Of Notes Payable And Long-term Debt 3	32,239
Notes Payable Schedule Of Notes Payable And Long-term Debt 4	40,075
Notes Payable Schedule Of Notes Payable And Long-term Debt 5	0
Notes Payable Schedule Of Notes Payable And Long-term Debt 6	2,096,610
Notes Payable Schedule Of Notes Payable And Long-term Debt 7	0
Notes Payable Schedule Of Notes Payable And Long-term Debt 8	(256,023)
Notes Payable Schedule Of Notes Payable And Long-term Debt 9	358,472
Notes Payable Schedule Of Notes Payable And Long-term Debt 10	373,940
Notes Payable Schedule Of Notes Payable And Long-term Debt 11	2,589,561
Notes Payable Schedule Of Notes Payable And Long-term Debt 12	0
Notes Payable Schedule Of Notes Payable And Long-term Debt 13	(140,195)
Notes Payable Schedule Of Notes Payable And Long-term Debt 14	989,751
Notes Payable Schedule Of Notes Payable And Long-term Debt 15	0
Notes Payable Schedule Of Notes Payable And Long-term Debt 16	3,894,516
Notes Payable Schedule Of Notes Payable And Long-term Debt 17	2,320,523
Notes Payable Schedule Of Notes Payable And Long-term Debt 18	3,639,123
Notes Payable Schedule Of Notes Payable And Long-term Debt 19	3,000,000
Notes Payable Schedule Of Notes Payable And Long-term Debt 20	(59,247)
Notes Payable Schedule Of Notes Payable And Long-term Debt 21	(590,015)
Notes Payable Schedule Of Notes Payable And Long-term Debt 22	414,183
Notes Payable Schedule Of Notes Payable And Long-term Debt 23	414,183
Notes Payable Schedule Of Notes Payable And Long-term Debt 24	330,000
Notes Payable Schedule Of Notes Payable And Long-term Debt 25	375,000
Notes Payable Schedule Of Notes Payable And Long-term Debt 26	21,728
Notes Payable Schedule Of Notes Payable And Long-term Debt 27	21,728
Notes Payable Schedule Of Notes Payable And Long-term Debt 28	4,345,787
Notes Payable Schedule Of Notes Payable And Long-term Debt 29	3,220,896
Notes Payable Schedule Of Notes Payable And Long-term Debt 30	8,240,304
Notes Payable Schedule Of Notes Payable And Long-term Debt 31	5,541,419
Notes Payable Schedule Of Notes Payable And Long-term Debt 32	(3,511,061)
Notes Payable Schedule Of Notes Payable And Long-term Debt 33	(5,541,419)
Notes Payable Schedule Of Notes Payable And Long-term Debt 34	4,729,243
Notes Payable Schedule Of Notes Payable And Long-term Debt 35	$ 0