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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Legend Oil and Gas Ltd (CE) | USOTC:LOGL | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.000008 | 0.00 | 01:00:00 |
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Colorado
|
84-1570556
|
|
(State or other jurisdiction of
incorporation or organization)
|
(IRS Employer
Identification No.)
|
Large accelerated filer
|
¨
|
|
Accelerated filer
|
¨
|
||
Non-accelerated filer
|
¨
|
|
Smaller reporting company
|
x
|
|
Page
|
||||
|
2
|
|
|||
|
2
|
||||
PART I. FINANCIAL INFORMATION
|
|
||||
Item 1.
|
|
3
|
|||
|
3
|
|
|||
|
4
|
|
|||
|
5
|
|
|||
|
6
|
|
|||
|
7
|
|
|||
|
8
|
|
|||
Item 2.
|
|
16
|
|
||
Item 4.
|
|
21
|
|
||
PART II. OTHER INFORMATION
|
|
||||
Item 1.
|
22
|
||||
Item 1A.
|
22
|
||||
Item 2.
|
22
|
||||
Item 3.
|
|
22
|
|
||
Item 5.
|
|
22
|
|
||
Item 6.
|
|
22
|
|
||
|
23
|
|
|||
|
24
|
|
•
|
Our ability to pay off our demand loan facility with National Bank of Canada
and Senior Secured Convertible Debentures to Hillair Capital Investments, L.P.;
|
|
•
|
Our ability to draw down on our equity line of credit with Lincoln Park Capital Fund, LLC, in amounts and times when needed;
|
|
•
|
Our ability to fund our 2014 drilling and development plan;
|
|
•
|
Our ability to obtain buyers on terms favorable to us, in the event that we were to seek to sell certain of our oil and gas interests;
|
|
•
|
Our ability to retain the services of our President, Chief Financial Officer and other key employees, the loss of which could materially impair our business plan;
|
|
•
|
Changes in estimates of our crude oil and natural gas reserves and depletion rates;
|
|
•
|
Our ability to control or reduce operating expenses and manage unforeseen costs;
|
|
•
|
Our reliance on third-party contractors in performing the majority of our operations, which could make management of our drilling and production efforts inefficient or unprofitable;
|
|
•
|
Our ability to maintain our existing property leases and acquire rights on properties that we desire;
|
|
•
|
Changes in commodity prices for crude oil and natural gas;
|
|
•
|
Environmental risks from operations of our wells;
|
|
•
|
Our ability to compete successfully against larger, well-funded, established oil and gas companies;
|
|
•
|
Our ability to comply with the many regulations to which our business is subject; and
|
|
•
|
Dilutive and other adverse effects on our existing shareholders and our stock price arising from future securities issuances.
|
March 31,
|
December 31,
|
|||||||
2014
|
2013
|
|||||||
ASSETS
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$
|
1,322
|
$
|
64,283
|
||||
Accounts receivable
|
358,493
|
329,123
|
||||||
Prepaid expenses
|
147,459
|
102,191
|
||||||
Total current assets
|
507,274
|
495,597
|
||||||
Deposits
|
3,740
|
3,740
|
||||||
Oil and gas property, plant and equipment
|
||||||||
Proven property – net
|
1,984,398
|
2,493,328
|
||||||
Unproven property
|
1,124,762
|
1,224,311
|
||||||
Total oil and gas properties, net
|
3,109,160
|
3,717,639
|
||||||
Total assets
|
$
|
3,620,174
|
$
|
4,216,976
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
||||||||
Current Liabilities
|
||||||||
Accounts payable
|
$
|
1,813,947
|
$
|
1,656,948
|
||||
Note payable to bank
|
1,453,210
|
2,018,951
|
||||||
Current portion of long term debt, net
|
80,139
|
27,496
|
||||||
Convertible debt, net
|
960,649
|
612,527
|
||||||
Embedded derivative liabilities
|
948,116
|
1,161,284
|
||||||
Total current liabilities
|
5,256,061
|
5,477,206
|
||||||
Asset retirement obligations
|
1,497,176
|
1,533,121
|
||||||
Total liabilities
|
6,753,237
|
7,010,327
|
||||||
Stockholders’ Equity (Deficit)
|
||||||||
Common stock - 400,000,000 shares authorized; $0.001 par value; 115,327,665 and 109,343,534 shares issued and outstanding, respectively
|
115,326
|
109,343
|
||||||
Additional paid-in capital
|
26,085,580
|
25,726,902
|
||||||
Accumulated other comprehensive loss
|
100,362
|
17,188
|
||||||
Accumulated deficit
|
(29,434,331
|
)
|
(28,646,784
|
)
|
||||
Total stockholders’ equity (deficit)
|
(3,133,063
|
)
|
(2,793,351
|
)
|
||||
Total liabilities and stockholders’ equity (deficit)
|
$
|
3,620,174
|
$
|
4,216,976
|
For the Three Months Ended
|
||||||||
March 31, 2014
|
March 31, 2013
|
|||||||
Oil and gas revenue
|
$
|
293,471
|
$
|
523,323
|
||||
Costs and Expenses
|
||||||||
General and administrative
|
511,859
|
1,547,336
|
||||||
Production expenses
|
158,106
|
351,345
|
||||||
Depletion, depreciation, and amortization
|
158,162
|
184,986
|
||||||
Impairment of oil and gas property
|
-
|
111,023
|
||||||
Accretion on asset retirement obligation
|
14,674
|
14,557
|
||||||
Total costs and expenses
|
842,801
|
2,209,247
|
||||||
Operating Loss
|
(549,330
|
)
|
(1,685,924
|
)
|
||||
Other Income and Expense
|
||||||||
Interest expense
|
(451,385
|
)
|
(37,477
|
)
|
||||
Change in value of embedded derivative liabilities
|
213,168
|
-
|
||||||
Total other income and expense
|
(238,217
|
) |
(37,477
|
)
|
||||
Net loss
|
$
|
(787,547
|
)
|
$
|
(1,723,401
|
)
|
||
Basic and diluted weighted average shares outstanding
|
112,854,205
|
77,809,160
|
||||||
Basic and diluted net loss per share
|
$
|
(0.01
|
)
|
$
|
(0.02
|
)
|
For the Three Months Ended
|
||||||||
March 31, 2014
|
March 31, 2013
|
|||||||
Net loss
|
$
|
(787,547
|
)
|
$
|
(1,723,401
|
)
|
||
Other comprehensive loss
|
||||||||
Foreign currency translation adjustment
|
83,174
|
(133,303
|
)
|
|||||
Comprehensive loss
|
$
|
(704,373
|
)
|
$
|
(1,856,704
|
)
|
Common Stock |
Additional
Paid-in Capital
|
Accumulated Other
Comprehensive Income (Loss)
|
Accumulated
Deficit
|
Total | ||||||||||||||||||||
Balance at December 31, 2012
|
77,220,271 | $ | 77,220 | $ | (25,353,942 | ) | $ | 152,634 | $ | (15,624,278 | ) | $ | (40,748,366 | ) | ||||||||||
Common stock issued for services
|
7,700,000 | 7,700 | 482,300 | - | - | 490,000 | ||||||||||||||||||
Stock based compensation
|
- | - | 1,206,994 | - | - | 1,206,994 | ||||||||||||||||||
Foreign currency translation
|
- | - | - | (135,446 | ) | - | (135,446 | ) | ||||||||||||||||
Conversion of note payable
|
2,772,407 | 2,772 | 59,761 | - | - | 62,533 | ||||||||||||||||||
Discount on short term note payable
|
- | - | 124,430 | - | - | 124,430 | ||||||||||||||||||
Conversion of convertible preferred stock to common stock
|
1,700,000 | 1,700 | 365,253 | - | - | 366,953 | ||||||||||||||||||
Dividends on preferred stock
|
13,823,000 | 13,823 | 677,327 | - | (691,150 | ) | - | |||||||||||||||||
Reclassification out of contingently redeemable common stock
|
- | - | 47,764,926 | - | - | 47,764,926 | ||||||||||||||||||
Stock issued for interest payment
|
955,128 | 955 | 30,405 | - | - | 31,360 | ||||||||||||||||||
Stock issued to employees
|
2,900,000 | 2,900 | 258,100 | - | - | 261,000 | ||||||||||||||||||
Stock issued for property
|
2,272,728 | 2,273 | 111,348 | - | - | 113,621 | ||||||||||||||||||
Net loss
|
- | - | - | - | (12,331,356 | ) | (12,331,356 | ) | ||||||||||||||||
Balance at December 31, 2013
|
109,343,534 | 109,343 | 25,726,902 | 17,188 | (28,646,784 | ) | (2,793,351 | ) | ||||||||||||||||
Stock issued for services
|
4,763,333 | 4,763 | 304,853 | - | - | 309,616 | ||||||||||||||||||
Stock issued for interest payment
|
1,220,798 | 1,220 | 50,256 | - | - | 51,746 | ||||||||||||||||||
Stock based compensation
|
- | - | 3,569 | - | - | 3,569 | ||||||||||||||||||
Foreign currency translation
|
- | - | - | 83,174 | - | 83,174 | ||||||||||||||||||
Net loss
|
- | - | - | - | ( 787,547 | ) | ( 787,547 | ) | ||||||||||||||||
Balance at March 31, 2014
|
115,327,665 | $ | 115,326 | $ | 26,085,580 | $ | 100,362 | $ | ( 29,434,331 | ) | $ | ( 3,133,063 | ) |
For the Three Months Ended
|
||||||||
March 31, 2014
|
March 31, 2013
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
$
|
(787,547
|
)
|
$
|
(1,723,401
|
)
|
||
Adjustments to reconcile net loss to cash flows from operating activities:
|
||||||||
Stock-based compensation
|
3,569
|
1,190,340
|
||||||
Amortization of discounts on notes payable
|
400,765
|
-
|
||||||
Accretion on asset retirement obligation
|
14,674
|
14,557
|
||||||
Issuance of common stock for services
|
309,616
|
50,000
|
||||||
Change in value of embedded derivative liabilities
|
(213,168
|
) |
-
|
|||||
Depletion, depreciation, amortization and impairment
|
158,162
|
296,009
|
||||||
Changes in operating assets and liabilities :
|
||||||||
Accounts receivable
|
(29,370
|
) |
(27,788
|
)
|
||||
Prepaid expenses and other assets
|
(45,268
|
) |
8,538
|
|||||
Accounts payable
|
208,476
|
405,572
|
||||||
Net cash flows from operating activities
|
19,909
|
213,827
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Proceeds from sale of oil and gas properties
|
450,316
|
-
|
||||||
Oil and gas properties development costs
|
-
|
(150,369
|
)
|
|||||
Net cash flows from investing activities
|
450,316
|
(150,369
|
)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Payments on note payable to bank
|
(565,741
|
)
|
(142,293
|
)
|
||||
Net cash flows from financing activities
|
(565,741
|
)
|
(142,293
|
)
|
||||
Change in cash and cash equivalents before effect of exchange rate changes
|
(95,516
|
)
|
(78,835
|
)
|
||||
Effect of exchange rate changes
|
32,555
|
76,201
|
||||||
Net change in cash and cash equivalents
|
(62,961
|
)
|
(2,634
|
)
|
||||
Cash and cash equivalents, beginning of period
|
64,283
|
12,989
|
||||||
Cash and cash equivalents, end of period
|
$
|
1,322
|
$
|
10,355
|
||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
||||||||
Cash paid during the year for:
|
||||||||
Interest
|
$
|
50,620
|
$
|
37,477
|
March 31, 2014
|
December 31, 2013
|
|||||||
Proven property, net of impairment
|
$
|
3,707,078
|
$
|
4,241,776
|
||||
Accumulated depletion, depreciation, and amortization
|
(1,722,680
|
)
|
(1,748,448
|
)
|
||||
1,984,398
|
2,493,328
|
|||||||
Unproven property
|
1,124,762
|
1,224,311
|
||||||
$
|
3,109,160
|
$
|
3,717,639
|
March 31, 2014
|
March 31, 2013
|
|||||||
Opening balance, January 1
|
$
|
1,533,121
|
$
|
1,654,032
|
||||
Foreign currency translation adjustment
|
(50,619
|
)
|
(32,744
|
)
|
||||
Accretion expense
|
14,674
|
14,557
|
||||||
Ending balance, March 31
|
$
|
1,497,176
|
$
|
1,635,845
|
Shares of Common Stock
Issuable from Warrants
Outstanding as of
|
|||||||||||||
March 31,
|
December 31,
|
Exercise
|
|||||||||||
Date of Issue
|
2014
|
2013
|
Price
|
Expiration
|
|||||||||
February 2011
|
-
|
300,000
|
$
|
0.50
|
February 2014
|
||||||||
April 2011
|
250,000
|
250,000
|
$
|
1.00
|
April 2014
|
||||||||
August 2011
|
2,300,000
|
2,300,000
|
$
|
2.00
|
August 2014
|
||||||||
July 2013
|
19,764,706
|
19,764,706
|
$
|
0.07
|
July 2018
|
||||||||
November 2013
|
10,098,361
|
10,098,361
|
$
|
0.07
|
November 2018
|
||||||||
32,413,067
|
32,713,067
|
Outstanding Options
|
||||||||
Number of Shares
|
Weighted Average Exercise Price
|
|||||||
Balance at January 1, 2014
|
600,000 | $ | 0.07 | |||||
Options granted
|
- | - | ||||||
Options cancelled
|
- | - | ||||||
Balance at March 31, 2014
|
600,000 | $ | 0.07 | |||||
Exercisable, March 31, 2014
|
200,000 | $ | 0.07 | |||||
Vested and expected to vest
|
600,000 | $ | 0.07 |
Embedded
Derivative
Liabilities
|
||||
Balances, December 31, 2013
|
$
|
1,161,284
|
||
Changes in fair value
|
(213,168
|
)
|
||
Balances
|
$
|
948,116
|
Three Months Ended March 31,
|
||||||||||||||||
2014
|
2013
|
Change
|
% Change
|
|||||||||||||
Production Data :
|
||||||||||||||||
Oil production (bbl)
|
1,217
|
5,226
|
(4,009
|
)
|
(76.7
|
)
|
||||||||||
Average daily oil production (bbl/d)
|
14
|
57
|
(43
|
)
|
(75.4
|
)
|
||||||||||
Natural gas production (mcf)
|
38,065
|
56,561
|
(18,496
|
)
|
(32.7
|
)
|
||||||||||
Average daily natural gas production (mcf/d)
|
423
|
622
|
(199
|
)
|
(32.0
|
)
|
||||||||||
Natural gas liquids production (bbl)
|
55
|
540
|
(485)
|
(89.8
|
)
|
|||||||||||
Average daily natural gas liquids production (bbl/d)
|
1
|
6
|
(5)
|
(83.3
|
)
|
|||||||||||
Total BOE
|
7,616
|
15,193
|
(7,577
|
)
|
(50.0
|
)
|
||||||||||
Total BOE/d
|
85
|
167
|
(82
|
)
|
(49.1
|
)
|
||||||||||
Revenue Data :
|
||||||||||||||||
Oil revenue ($)
|
112,000
|
336,000
|
(224,000
|
)
|
(66.7
|
)
|
||||||||||
Average realized oil sales price ($/bbl)
|
91.72
|
64.34
|
27.38
|
42.6
|
||||||||||||
Gas revenue ($)
|
178,000
|
165,000
|
13,000
|
7.9
|
||||||||||||
Average realized gas sales price ($/mcf)
|
4.68
|
2.91
|
1.77
|
60.8
|
||||||||||||
Natural gas liquids revenue ($)
|
4,000
|
22,000
|
(18,000
|
)
|
(81.8
|
)
|
||||||||||
Average realized natural gas liquids price ($/bbl)
|
66.93
|
39.58
|
27.35
|
69.1
|
||||||||||||
Operating expenses :
|
||||||||||||||||
Production expenses
|
158,000
|
351,000
|
(193,000
|
)
|
(55.0
|
)
|
||||||||||
Average production expenses ($/boe)
|
20.76
|
23.10
|
(2.34)
|
(10.1
|
)
|
|||||||||||
Operating Margin ($/boe)
|
17.77
|
11.32
|
6.45
|
57.0
|
||||||||||||
Depreciation, depletion, and amortization
|
158,000
|
185,000
|
(27,000
|
)
|
(14.6
|
)
|
Three Months Ended March 31,
|
||||||||||||||||
2014
|
2013
|
Change
|
Percent Change
|
|||||||||||||
Product revenues:
|
||||||||||||||||
Crude oil sales
|
$
|
112,000
|
$
|
336,000
|
$
|
(224,000
|
)
|
(66.7
|
)%
|
|||||||
Natural gas sales
|
178,000
|
165,000
|
13,000
|
7.9
|
%
|
|||||||||||
Natural gas liquids sales
|
4,000
|
22,000
|
(18,000
|
)
|
(81.8
|
)%
|
||||||||||
Product revenues
|
$
|
294,000
|
$
|
523,000
|
$
|
(229,000
|
)
|
(43.8
|
)%
|
Three Months Ended March 31,
|
||||||||||||||||
2014
|
2013
|
Change
|
Percent Change
|
|||||||||||||
Sales Volume :
|
||||||||||||||||
Crude Oil(bbl)
|
1,217
|
5,226
|
(4,009
|
)
|
(76.7
|
)%
|
||||||||||
Natural Gas(mcf)
|
38,065
|
56,561
|
(18,496
|
)
|
(32.7
|
)%
|
||||||||||
Natural Gas Liquids(bbl)
|
55
|
540
|
(485
|
)
|
(89.8
|
)%
|
||||||||||
Total BOE
|
7,616
|
15,193
|
(7,577
|
)
|
(50.0
|
)%
|
Three Months Ended March 31,
|
||||||||||||||||
2014
|
2013
|
Change
|
Percent Change
|
|||||||||||||
Sales Price :
|
||||||||||||||||
Crude Oil($/bbl)
|
91.70
|
64.34
|
27.36
|
42.6
|
%
|
|||||||||||
Natural Gas($/mcf)
|
4.68
|
2.91
|
1.77
|
60.8
|
%
|
|||||||||||
Natural Gas Liquids($/bbl)
|
66.93
|
39.58
|
27.35
|
69.1
|
%
|
Three months ended March 31,
|
||||||||||||||||
2014
|
2013
|
$ Change
|
% Change
|
|||||||||||||
General and administrative expenses
|
||||||||||||||||
Professional Fees
|
$
|
312,000
|
$
|
100,000
|
$
|
212,000
|
213.0
|
%
|
||||||||
Salaries and benefits
|
136,000
|
178,000
|
(42,000
|
)
|
(23.6
|
)%
|
||||||||||
Office and administration
|
60,000
|
79,000
|
(19,000
|
)
|
(24.1
|
)%
|
||||||||||
Stock based compensation
|
4,000
|
1,190,000
|
(1,186,000
|
)
|
(100.0
|
)%
|
||||||||||
Total
|
$
|
512,000
|
$
|
1,547,000
|
$
|
(1,035,000
|
)
|
(66.9
|
)%
|
For the Three Months Ended March 31,
|
||||||||
2014
|
2013
|
|||||||
Net cash provided by (used) in operating activities
|
$
|
19,900
|
$
|
214,000
|
)
|
|||
Net cash used in investing activities
|
(450,316
|
)
|
(150,000
|
)
|
||||
Net cash provided (used) by financing activities
|
(565,700
|
)
|
(142,000
|
)
|
||||
Effect of exchange rate changes
|
32,555
|
76,000
|
||||||
Net increase (decrease) in cash during period
|
$
|
(62,961
|
)
|
$
|
(2,000
|
)
|
•
|
may have been qualified by disclosures that were made to the other parties in connection with the negotiation of the agreements, which disclosures are not necessarily reflected in the agreements;
|
|
•
|
may apply standards of materiality that differ from those of a reasonable investor; and
|
|
•
|
were made only as of specified dates contained in the agreements and are subject to subsequent developments and changed circumstances.
|
LEGEND OIL AND GAS, LTD.
|
|||
Dated: May 27, 2014
|
By:
|
/s/ Marshall Diamond-Goldberg
|
|
Marshall Diamond-Goldberg
|
|||
President and Chief Executive Officer
|
|||
(Principal Executive Officer)
|
|||
Dated: May 27, 2014
|
By:
|
/s/ James Vandeberg
|
|
James Vandeberg
|
|||
Chief Financial Officer
|
|||
(Principal Accounting and Financial Officer)
|
Exhibit
No.
|
|
Description
|
|
Location
|
31.1
|
|
|
Filed herewith.
|
|
31.2
|
|
|
Filed herewith.
|
|
32.1
|
|
|
Filed herewith.
|
|
101.INS
|
|
XBRL Instance Document
|
|
**
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
**
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
**
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
**
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
**
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
**
|
**
|
XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
|
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