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EXCEL - IDEA: XBRL DOCUMENT - FIELDPOINT PETROLEUM CORPFinancial_Report.xls
EX-32 - EXHIBIT 32 - FIELDPOINT PETROLEUM CORPex32.htm
EX-31 - EXHIBIT 31 - FIELDPOINT PETROLEUM CORPex31.htm


U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

x Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarterly Period Ended March 31, 2013

o 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: 001-32624
 
FieldPoint Petroleum Corporation
(Exact name of small business issuer as specified in its charter)
 
Colorado
 
84-0811034
(State or Other Jurisdiction of Incorporation or Organization)
 
(I.R.S. Employer Identification No.)
 
1703 Edelweiss Drive
Cedar Park, Texas  78613
(Address of Principal Executive Offices)   (Zip Code)
 
(512) 250-8692
(Issuer's Telephone Number, Including Area Code)

 
(former name, address and fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 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 o

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 x  No  o

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 definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (check one):

Large accelerated filer o
Accelerated filer o
   
Non-accelerated filer o (Do not check if a smaller reporting company)
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 o  No x
 
As of May 14, 2013, the number of shares outstanding of the Registrant's $.01 par value common stock was 8,071,336.
 


 
 

 
 
PART I
Item 1.   Financial Statements

FieldPoint Petroleum Corporation

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

   
March 31,
   
December 31,
 
   
2013
   
2012
 
ASSETS
 
             
CURRENT ASSETS:
           
Cash and cash equivalents
  $ 2,251,372     $ 1,408,075  
Certificates of deposit
    44,702       44,702  
Accounts receivable:
               
Oil and natural gas sales
    1,221,215       1,193,495  
Joint interest billings, less allowance for doubtful accounts of approximately $174,000 each period
    256,881       229,406  
Income taxes receivable
    54,815       196,555  
Deferred income tax asset—current
    63,000       171,000  
Prepaid expenses and other current assets
    72,835       42,349  
Total current assets
    3,964,820       3,285,582  
                 
PROPERTY AND EQUIPMENT:
               
Oil and natural gas properties (successful efforts method)
    32,438,983       32,210,252  
Other equipment
    52,113       52,113  
Less accumulated depletion and depreciation
    (12,936,017 )     (12,412,517 )
Net property and equipment
    19,555,079       19,849,848  
                 
Total assets
  $ 23,519,899     $ 23,135,430  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
                 
CURRENT LIABILITIES:
               
Accounts payable and accrued expenses
  $ 508,961     $ 889,796  
Oil and gas revenues payable
    304,429       286,234  
Total current liabilities
    813,390       1,176,030  
                 
LONG-TERM DEBT
    6,740,000       6,740,000  
DEFERRED INCOME TAXES
    2,538,000       2,442,000  
ASSET RETIREMENT OBLIGATION
    1,619,935       1,595,935  
Total liabilities
    11,711,325       11,953,965  
                 
STOCKHOLDERS’ EQUITY:
               
Common stock, $.01 par value, 75,000,000 shares authorized; 8,991,836 and 8,970,936 shares issued, respectively and 8,064,836 and 8,043,936 outstanding, respectively
    89,918       89,709  
Additional paid-in capital
    11,745,313       11,661,922  
Retained earnings
    1,940,235       1,396,726  
Treasury stock, 927,000 shares, each period, at cost
    (1,966,892 )     (1,966,892 )
Total stockholders’ equity
    11,808,574       11,181,465  
Total liabilities and stockholders’ equity
  $ 23,519,899     $ 23,135,430  
 
See accompanying notes to these unaudited condensed consolidated financial statements.
 
 
2

 
 
FieldPoint Petroleum Corporation
 
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
   
Three Months Ended
 
   
March 31,
 
   
2013
   
2012
 
REVENUE:
           
Oil and natural gas sales
  $ 2,401,082     $ 3,229,504  
Well operational and pumping fees
    17,066       17,066  
Disposal fees
    70,000       26,000  
Total revenue
    2,488,148       3,272,570  
                 
COSTS AND EXPENSES:
               
Production expense
    790,729       932,602  
Depletion and depreciation
    523,500       576,500  
Accretion of discount on asset retirement obligations
    24,000       23,000  
General and administrative
    243,996       387,848  
Total costs and expenses
    1,582,225       1,919,950  
                 
OPERATING INCOME
    905,923       1,352,620  
                 
OTHER INCOME (EXPENSE):
               
Interest income
    564       1,030  
Interest expense
    (59,978 )     (64,827 )
Unrealized loss on commodity derivatives
    -       (31,000 )
Miscellaneous
    -       181  
Total other income (expense)
    (59,414 )     (94,616 )
                 
INCOME BEFORE INCOME TAXES
    846,509       1,258,004  
                 
INCOME TAX EXPENSE – CURRENT
    (99,000 )     (49,500 )
INCOME TAX EXPENSE – DEFERRED
    (204,000 )     (414,000 )
TOTAL INCOME TAX PROVISION
    (303,000 )     (463,500 )
                 
NET INCOME
  $ 543,509     $ 794,504  
                 
EARNINGS PER SHARE:
               
BASIC
  $ 0.07     $ 0.10  
DILUTED
  $ 0.07     $ 0.10  
                 
WEIGHTED AVERAGE SHARES OUTSTANDING:
               
BASIC
    8,049,732       7,983,768  
DILUTED
    8,049,732       8,138,359  
 
See accompanying notes to these unaudited condensed consolidated financial statements.
 
 
3

 

FieldPoint Petroleum Corporation
 
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
   
For the Three Months Ended
 
   
March 31,
 
   
2013
   
2012
 
             
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net income
  $ 543,509     $ 794,504  
Adjustments to reconcile net income to net cash provided by operating activities:
               
Unrealized loss on commodity derivatives
    -       31,000  
Depletion and depreciation
    523,500       576,500  
Accretion of discount on asset retirement obligations
    24,000       23,000  
Deferred income tax expense
    204,000       414,000  
Common shares issued in lieu of compensation
    -       120,420  
Changes in current assets and liabilities:
               
Accounts receivable
    (55,195 )     (405,949 )
Prepaid income taxes
    141,740       -  
Prepaid expenses and other assets
    (30,486 )     (38,996 )
Accounts payable and accrued expenses
    (505,376 )     (182,057 )
Oil and gas revenues payable
    18,195       (20,969 )
Other
    -       (38 )
Net cash provided by operating activities
    863,887       1,311,415  
                 
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Additions to oil and natural gas properties
    (104,190 )     (483,254 )
Net cash used in investing activities
    (104,190 )     (483,254 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Proceeds from exercise of warrants
    83,600       -  
Net cash provided by financing activities
    83,600       -  
                 
NET CHANGE IN CASH AND CASH EQUIVALENTS
    843,297       828,161  
                 
CASH AND CASH EQUIVALENTS, beginning of the period
    1,408,075       2,037,593  
                 
CASH AND CASH EQUIVALENTS, end of the period
  $ 2,251,372     $ 2,865,754  
                 
SUPPLEMENTAL INFORMATION:
               
Cash paid during the period for interest
  $ 59,978     $ 64,827  
Cash paid during the period for taxes
  $ 29,032     $ -  
Capital items in accounts payable
  $ 124,541     $ -  
 
See accompanying notes to these unaudited condensed consolidated financial statements.
 
 
4

 
 
FieldPoint Petroleum Corporation
 
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
1.
Nature of Business, Organization and Basis of Preparation and Presentation

FieldPoint Petroleum Corporation (the “Company”, “our”, or “we”) is incorporated under the laws of the state of Colorado.  The Company is engaged in the acquisition, operation and development of oil and natural gas properties, which are located in Louisiana, New Mexico, Oklahoma, Texas, and Wyoming.

The condensed consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted.  However, in the opinion of management, all adjustments (which consist only of normal recurring adjustments) necessary to present fairly the financial position and results of operations for the periods presented have been made.  You should read these condensed consolidated financial statements in conjunction with the consolidated financial statements and the notes thereto included in the Company's Form 10-K filing for the year ended December 31, 2012.

2.
Earnings Per Share

Basic earnings per share are computed based on the weighted average number of shares of common stock outstanding during the period.  Diluted earnings per share take common stock equivalents (such as options and warrants) into consideration using the treasury stock method.  There were no dilutive warrants for the three months ended March 31, 2013 as the exercise price of the warrants was equal to the average common stock price for the period. The dilutive effect of the warrants for the three months ended March 31, 2013 and 2012 is presented below.

   
For the Three Months Ended
March 31,
 
   
2013
   
2012
 
             
Net income
  $ 543,509     $ 794,504  
                 
Weighted average common stock outstanding
    8,049,732       7,983,768  
Weighted average dilutive effect of stock warrants
    -       154,591  
Dilutive weighted average shares
    8,049,732       8,138,359  
                 
Earnings per share:
               
Basic
  $ 0.07     $ 0.10  
Diluted
  $ 0.07     $ 0.10  

 
5

 
 
FieldPoint Petroleum Corporation
 
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
3.
Related Party Transactions

The Company leases office space from its president.  Rent expense for this month-to-month lease was $7,500 for each of the three months ended March 31, 2013 and 2012.

4.
Long-Term Debt

Effective January 17, 2013, the borrowing base under our line of credit was redetermined to remain at $11,000,000.

5.
Stockholders’ Equity

The Company issued a stock warrant dividend of one warrant per one common share outstanding as of the record date of March 23, 2012.  A total of 7,983,175 warrants were issued and have an exercise price of $4.00.  The warrants are exercisable over 6 years from the record date.  The Company has the right to call the warrants in the future if the market price of the common stock exceeds 150% of the exercise price of the warrant ($6.00).  A total of 20,900 warrants to purchase an equal number of common shares for proceeds of $83,600 were exercised during the three months ending March 31, 2013. The following table summarizes the warrants outstanding at December 31, 2012 and March 31, 2013:

Warrants outstanding, December 31,2012
    7,983,175  
Warrants exercised
    (20,900 )
Warrants outstanding, March 31, 2013
    7,962,275  

6.
Commodity Derivatives

The Company had no commodity derivative positions outstanding at March 31, 2013 or December 31, 2012. In January 2012, we entered into the following commodity derivatives positions to hedge our oil production price risk. These positions were outstanding at March 31, 2012:

Period
 
Volume (Barrels)
   
$/Barrel
 
   
Daily
   
Total
   
Floor
   
Ceiling
 
NYMEX –WTI Collars April 2012 – June 2012
    200       18,200     $ 95.00     $ 106.50  

The following table summarizes the change in fair value of our commodity derivatives:

 
 
Income Statement
 
3 Months Ended
March 31,
 
 
Location
 
2013
   
2012
 
Derivatives not designated as hedging instruments
             
               
Unrealized loss on commodity derivatives
Other Income (Expense)
  $ -     $ (31,000 )
 
 
6

 
 
FieldPoint Petroleum Corporation
 
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
Unrealized gains and losses, at fair value, are included on our consolidated balance sheets as current or non-current assets or liabilities based on the anticipated timing of cash settlements under the related contracts.  Changes in the fair value of our commodity derivative contracts are recorded in earnings as they occur and included in other income (expense) on our consolidated statements of operations.  We estimate the fair values of collar contracts based on the present value of the difference in exchange-quoted forward price curves and contractual settlement prices multiplied by notional quantities.  We internally valued the option contracts using industry-standard option pricing models and observable market inputs.  We use our internal valuations to determine the fair values of the contracts that are reflected on our consolidated balance sheets.  Realized gains and losses are also included in other income (expense) on our consolidated statements of operations.
 
7.
Subsequent Events

After March 31, 2013, the Company issued 5,000 shares of the Company’s $.01 par value Common Stock as compensation for the services of an investor relations advisory consultant to be rendered through June 30, 2013.
 
 
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PART I
Item 2.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the Company’s Condensed Consolidated Financial Statements, and respective notes thereto, included elsewhere herein.  The information below should not be construed to imply that the results discussed herein will necessarily continue into the future or that any conclusion reached herein will necessarily be indicative of actual operating results in the future.  Such discussion represents only the best present assessment of the management of FieldPoint Petroleum Corporation.

General

FieldPoint Petroleum Corporation derives its revenues from its operating activities including sales of oil and natural gas and operating oil and natural gas properties.  The Company's capital for investment in producing oil and natural gas properties has been provided by cash flow from operating activities and from bank financing. The Company categorizes its operating expenses into the categories of production expenses and other expenses.

Results of Operations

Comparison of three months ended March 31, 2013 to the three months ended March 31, 2012

   
Quarter Ended March 31,
 
   
2013
   
2012
 
Revenue:
           
Oil sales
  $ 2,208,733     $ 3,030,318  
Natural gas sales
    192,349       199,186  
Total oil and natural gas sales
  $ 2,401,082     $ 3,229,504  
                 
Sales volumes:
               
Oil (Bbls)
    24,631       31,804  
Natural gas (Mcf)
    41,185       40,031  
Total (BOE)
    31,495       38,476  
                 
Average sales prices:
               
Oil ($/Bbl)
  $ 89.67     $ 95.28  
Natural gas ($/Mcf)
    4.67       4.98  
Total ($/BOE)
  $ 76.24     $ 83.94  

             
Costs and expenses ($/BOE)
           
Lease operating expense
  $ 25.11     $ 24.24  
Depletion and depreciation
    16.62       14.98  
Accretion of discount on asset retirement obligations
    0.76       0.60  
General and administrative
    7.75       10.08  
Total
  $ 50.24     $ 49.90  

 
8

 

Oil and natural gas sales revenues decreased 26% or $828,422 to $2,401,082 for the three-month period ended March 31, 2013 from the comparable 2012 period.  Average oil sales prices decreased 6% to $89.67 for the three-month period ended March 31, 2013 compared to $95.28 for the period ended March 31, 2012.  Average natural gas sales prices decreased 6% to $4.67 for the three-month period ended March 31, 2013 compared to $4.98 for the period ended March 31, 2012.  Sales volumes decreased 18% on a BOE basis, primarily due to natural declines in production.  The lower sales volumes accounted for a decrease in revenue of approximately $677,000 while lower commodity prices accounted for a decrease in revenue of approximately $151,000.  We anticipate volumes to increase in the coming quarters primarily due to additional drilling in New Mexico in the second half of 2013.

Lease operating expenses decreased 15% or $141,873 to $790,729 for the three month period ended March 31, 2013 from the comparable 2012 period.  This was primarily due to decreases in costs associated with remedial repairs in 2013 as compared to 2012 offset by costs associated with new field production.  Lifting costs per BOE increased 4% or $0.87 to $25.11 for the period primarily due to higher cost associated with field maintenance. We anticipate lease operating expenses to increase over the following quarters due to additional remedial repairs and workover expenses.

Depletion and depreciation decreased 9% or $53,000 to $523,500 for the three month period ended March 31, 2013 versus $576,500 in the 2012 comparable period.  This was primarily due to lower production during the quarter ended March 31, 2013 as compared to the same period in 2012.

General and administrative overhead cost decreased 37% or $143,852 to $243,996 for the three-month period ended March 31, 2013 from the three-month period ended March 31, 2012.  This was primarily attributable to a decrease in compensation expense during the 2013 period.  At this time, the Company anticipates general and administrative expenses to remain stable or increase slightly in the coming quarters.

Other expense, net for the quarter ended March 31, 2013, were $59,414 compared to other expense, net of $94,616 for quarter ended March 31, 2012.  The net decrease was primarily due to a $31,000 unrealized loss on commodity derivatives during the 2012 period.

Liquidity and Capital Resources

Cash flow provided by operating activities was $863,887 for the three month period ended March 31, 2013, as compared to $1,311,415 of cash flow provided by operating activities in the comparable 2012 period.  The decrease in cash flows from operating activities was primarily due to a decrease in net income and deferred taxes and changes in accounts receivable and accounts payable.

Cash flow used in investing activities was $104,190 for the three month period ended March 31, 2013 and $483,254 in the comparable 2012 period due to the additions to oil and natural gas properties and equipment in each period.

Cash flow provided by financing activities was $83,600 from the exercise of 20,900 shares of our outstanding publicly traded common stock purchase warrants at an exercise price of $4.00 per share.

We may continue to raise financing through draws from our line of credit which has a borrowing base of $11,000,000.  We anticipate our operating cash flow and other capital resources, including our Citibank revolving credit facility, if needed, will adequately fund planned capital expenditures and other capital uses over the near term.  Based on industry outlook for the remainder of 2013, prices for oil and gas may be lower than the comparable period in 2012.
 
 
9

 
 
Effective May 16, 2012, we executed an At Market Issuance Sales Agreement with MLV & Co., LLC (“MLV”) providing for an at-the-market offering of securities of up to 900,000 shares of one common stock (the “ATM Offering”). The ATM Offering is being undertaken pursuant to Rule 415 and a universal shelf Registration Statement on Form S-3 which was declared effective by the SEC on December 9, 2011. Through March 31, 2013, we have sold an aggregate of 60,761 shares of common stock in the ATM Offering, realizing net proceeds of $193,589 during 2012.  An additional 839,239 shares of common stock have been registered for sale in the ATM Offering, which may continue until May 16, 2014 unless terminated sooner as provided for in the Sales Agreement with MLV.  As there is no commitment for future sales of additional shares, we cannot predict how much, if any, additional proceeds may be realized in the ATM Offering.
 
PART I
Item 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We periodically enter into certain commodity price risk management transactions to manage our exposure to oil and natural gas price volatility.  These transactions may take the form of futures contracts, swaps or options.  All data relating to our derivative positions is presented in accordance with authoritative guidance.  Accordingly, unrealized gains and losses related to the change in fair value of derivative contracts that qualify and are designated as cash flow hedges are recorded as other comprehensive income or loss and such amounts are reclassified to oil and natural gas sales revenues as the associated production occurs.  Derivative contracts that do not qualify for hedge accounting treatment are recorded as derivative assets and liabilities at fair value in the consolidated balance sheet, and the associated unrealized gains and losses are recorded as current expense or income in the consolidated statement of operations.  While such derivative contracts do not qualify for hedge accounting, management believes these contracts can be utilized as an effective component of commodity price risk management activities.  At March 31, 2012, we had collars with a floor of $95.00 and a ceiling of $106.50 for 200 barrels of oil per day from January 1, 2012 to June 30, 2012.  We had unrealized losses of $31,000 on commodity derivative transactions during the three month period ending March 31, 2012. We had no commodity derivative positions outstanding at March 31, 2013.
 
 
10

 
 
PART I
Item 4.   CONTROLS AND PROCEDURES

a)
Disclosure Controls and Procedures

The Company’s Principal Executive Officer and Principal Financial Officer, Ray Reaves, has established and is currently maintaining disclosure controls and procedures for the Company.  The disclosure controls and procedures have been designed to provide reasonable assurance that the information required to be disclosed by the Company in reports that it files under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and to ensure that information required to be disclosed by the Company is accumulated and communicated to the Company's management as appropriate to allow timely decisions regarding required disclosure.

The Principal Executive Officer and Principal Financial Officer conducted a review and evaluation of the effectiveness of the Company’s disclosure controls and procedures and have concluded, based on his evaluation as of the end of the period covered by this Report, that our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and to ensure that information required to be disclosed by the Company is accumulated and communicated to management, including our principal executive officer and our principal financial officer, to allow timely decisions regarding required disclosure and we refer you to Exchange Act Rule 13a-15(e).
 
b)
Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting during the first quarter ended March 31, 2013 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

c)
Limitations of Any Internal Control Design

Our principal executive and financial officer does not expect that our disclosure controls or internal controls will prevent all error and all fraud.  Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and our principal executive and financial officer has determined that our disclosure controls and procedures are effective at doing so, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met.  Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.  Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.  These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.  Additionally, controls can be circumvented if there exists in an individual a desire to do so.  There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
 
 
11

 
 
PART II

OTHER INFORMATION

Item 1.  Legal Proceedings

None.

Item 1A.  Risk Factors

None.
 
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

The following sets forth information required by Item 701(f) of Regulation S-K with respect to the sale of securities registered for sale under the Securities Act of 1933, as amended (“Securities Act”):

1.         The Company’s universal shelf Registration Statement on Form S-3 (the “Registration Statement”) was declared effective by the SEC on December 9, 2011.  On May 16, 2012, the Company filed its Prospectus Supplement in accordance with Rule 424(b)(5) under the Securities Act covering the sale of up to 900,000 shares of common stock through MLV in the ATM Offering.

2.         The ATM Offering commenced on May 16, 2012.

3.         The ATM Offering is continuing until May 16, 2014, unless sooner terminated pursuant to the terms of the Sales Agreement between the Company and MLV & Co., LLC (“MLV”).

4.         The Sales Agent in the ATM Offering is MLV.

5.         The Registration Statement registers for sale in the ATM Offering up to 900,000 shares of common stock.

6.         Cumulative expenses incurred through March 31, 2013 in connection with the ATM Offering have been:

a.         Expenses paid to affiliates of the Company:   none.

b.         Expenses paid to others:

Sales Agent commissions:
  $ 18,179  
Other expenses:
  $ 45,590  
    $ 63,769  

7.           Net ATM Offering cumulative proceeds through March 31, 2013:    $193,589

8.           Use of net ATM Offering proceeds:   working capital.  Such use consisted exclusively of payments to persons other than affiliates of the Company.
 
 
12

 
 
Item 3.  Default Upon Senior Securities

None.

Item 4.  Mine Safety Disclosures

None.

Item 5.  Other Information

None.

Item 6.  Exhibits

Exhibits
Certification
Certification Pursuant to U.S.C. Section 1350
101.INS
XBRL Instance Document
101.SCH
XBRL Schema Document
101.CAL  
XBRL Calculation Linkbase Document
101.LAB
XBRL Label Linkbase Document
101.PRE
XBRL Presentation Linkbase Document
101.DEF
XBRL Definition Linkbase Document
 
SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date:  May 14, 2013
By:  
/s/ Ray Reaves
 
  Ray Reaves, President, Principal Executive Officer, Treasurer and Principal Financial Officer  
 
 
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