Quarterly report pursuant to Section 13 or 15(d)

CONSOLIDATED BALANCE SHEETS

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CONSOLIDATED BALANCE SHEETS - USD ($)
Sep. 30, 2015
Dec. 31, 2014
Current Assets:    
Cash and equivalents $ 2,109 $ 30,755
Oil and gas sales receivable 63,325 14,521
Receivable from DNR Oil & Gas, Inc.:    
Oil and gas sales, net of production costs 39,173 89,147
Other 0 78,273
Prepaid expenses and other 21,840 34,222
Total Current Assets 126,447 246,918
Oil and gas properties, at cost, successful efforts method:    
Proved properties 10,267,669 10,222,668
Unevaluated properties 348,836 348,836
Natural gas gathering system 442,195 442,195
Furniture and equipment 22,522 22,522
Total property and equipment 11,081,222 11,036,221
Less accumulated depreciation, depletion and amortization (3,349,871) (2,840,173)
Net Property and Equipment 7,731,351 8,196,048
TOTAL ASSETS 7,857,798 8,442,966
Payable to DNR Oil & Gas, Inc.:    
Operator fees and other 128,253 36,000
Unrelated parties 72,621 43,365
Notes and advances payable - current portion:    
Directors and affiliates 288,567 288,258
Unrelated parties 970,400 872,239
Accrued interest expense 31,377 3,279
Accrued consulting - related party 23,700 21,800
Director fees payable in common stock 0 20,900
Current portion of asset retirement obligations 297,700 191,843
Other accrued costs and expenses 148,777 63,642
Total Current Liabilities 1,961,395 1,541,326
Long-Term Liabilities:    
Contingent acquisition costs payable to DNR Oil & Gas, Inc. 250,000 250,000
Notes and advances payable, net of current portion:    
DNR Oil & Gas, Inc. 792,151 792,151
Directors and affiliates 49,206 62,440
Unrelated parties 25,640 63,534
Asset retirement obligations, net of current portion 506,500 557,170
Total Long-Term Liabilities 1,623,497 1,725,295
Total Liabilities 3,584,892 3,266,621
Stockholders' Equity:    
Common stock, no par value; authorized 499,000,000 shares, issued and outstanding 12,558,459 in 2014 and 12,963,747 in 2015 21,384,285 21,294,887
Accumulated deficit (17,111,379) (16,118,542)
Total Stockholders' Equity 4,272,906 5,176,345
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 7,857,798 8,442,966
Series 1    
Stockholders' Equity:    
Convertible Class A preferred stock; $10,000 face value per share, authorized 1,000,000 shares: Series 1; authorized 30,000 shares, no shares issued and outstanding in 2014 and 2015 Series 2; authorized 2,500 shares, no shares issued and outstanding in 2014 and 2015 0 0
Series 2    
Stockholders' Equity:    
Convertible Class A preferred stock; $10,000 face value per share, authorized 1,000,000 shares: Series 1; authorized 30,000 shares, no shares issued and outstanding in 2014 and 2015 Series 2; authorized 2,500 shares, no shares issued and outstanding in 2014 and 2015 $ 0 $ 0