Annual report pursuant to Section 13 and 15(d)

Subsequent Events

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Subsequent Events
12 Months Ended
Dec. 31, 2017
Subsequent Events [Abstract]  
Subsequent Events

Note 13 – Subsequent Events

 

Completion of two non-operated exploratory wells

 

In Q2 2018, the two non-operated exploratory wells in which the Company has a 21.62% working interest and 17.1% net revenue interest were completed, and the costs shown as “construction in progress” will be reclassified to oil and gas properties subject to amortization in the second quarter of 2018. See Note 4 – Property and Equipment.

 

Extension of Debt Maturity

 

13.5% unsecured note payable due September 8, 2017

 

On February 28, 2018, Profit Well and the Company agreed to extend the maturity date of the debenture to June 30, 2018, and as consideration for the extension, the Company agreed to compensate Profit Well with 200,000 shares of restricted common stock. In addition, the parties agreed that if payment of said principal and interest due and payable is made late, then a penalty payment of $100,000 shall become due and payable to Profit Well by the Company. The Company and Profit Well are in ongoing discussions to extend the term of this Note and the Company believes it will either extend, rework or repay the obligation to the satisfaction of Profit Well. As partial consideration for the deferral, the Company will offer Profit Well 100,000 shares of its restricted common stock.

 

0% unsecured note payable due January 2, 2018

 

Since January 23, 2018, the Company and the investor have been in ongoing discussions to extend the term of this Note. On March 28, 2018, the investor acknowledged that the Company is not in default regarding this Note and reaffirmed its belief that the Company will either extend the Note’s due date or repay its obligation on terms that are mutually satisfactory. The Company and this investor are in ongoing discussions to extend the term of this Note and the Company believes it will either extend, rework or repay the obligation to the satisfaction of the investor.

 

8% convertible note payable due August 16, 2018

 

In June 2018, the Company made a principal payment in the amount of $100,000. Furthermore, the Company agreed to pay the remaining balance of $229,025 on or before thirty-five (35) days from June 5th, 2018. The Note may be converted if the Note Balance is not paid on or before thirty-five (35) days from June 5th 2018. FirstFire agreed that the Note is not in default. As consideration for agreeing to provide the Company with this extension of time to pay, the Company issued the investor 150,000 shares of restricted common stock, valued at $18,000.

 

Extension of Debt Maturity – Related Party

 

13.25% unsecured note payable due May 5, 2017

 

On February 28, 2018, Berwin and the Company agreed to extend the maturity date of the debenture to June 30, 2018, and as consideration for the extension, the Company agreed to compensate Berwin with 250,000 shares of restricted common stock. In addition, the parties agreed that if payment of said principal and interest due and payable is made late, then a penalty payment of $125,000 shall become due and payable to Berwin by the Company. The Company and Berwin are in ongoing discussions to extend the term of this Note and the Company believes it will either extend, rework or repay the obligation to the satisfaction of Berwin. As partial consideration for the deferral, the Company will offer Berwin 100,000 shares of its restricted common stock.

 

Contingent Liabilities – Legal Proceedings

 

Conquest Well Servicing, LLC vs. Foothills Exploration Operating, Inc. (Case No. 179800421 8th Judicial District Court in and for Uintah County, State of Utah)

 

An order requesting company asset inquiry was issued on February 20, 2018. As of July 26, 2018, no further action has been taken.