10-K 1 hinto10k2014vfinal.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 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: 000-26317 HINTO ENERGY, INC. ----------------------------------------------------------- (Exact name of registrant as specified in its charter) Wyoming 84-1384961 ---------------------------------- --------------------- State or other jurisdiction of I.R.S. Employer incorporation or organization Identification No. 5350 South Roslyn Street, Suite 400 Greenwood Village, CO 80111 ------------------------------------------------------------------------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (303)647-4850 ------------------------------------------------------------------------------ Securities registered pursuant to Section 12(b) of the Act: Title of each class registered Name of each exchange on which registered ---------------------------------- ------------------------ Not Applicable Not Applicable Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK ------------ (Title of class) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes |_| No |X| Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. |_| 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 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 |_| Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files) Yes |X| No |_| Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (ss. 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. |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 definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check One). ----------------------------- -------- ------------------------------ ---------- Large accelerated filer [___] Accelerated filer [___] ----------------------------- -------- ------------------------------ ---------- Non-accelerated filer [___] Smaller reporting company [_X_] (Do not check if a smaller reporting company) ----------------------------- -------- ------------------------------ ---------- Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes |_| No |X| On March 31, 2015, 13,875,877 shares of common stock were held by non-affiliates and had a value of $5,411,592 based on the average closing bid and ask. There were 21,859,995 shares issued and outstanding of the registrant's Common Stock as of March 31, 2015. TABLE OF CONTENTS PART I ITEM 1 Business 2 ITEM 1 A. Risk Factors 10 ITEM 1 B. Unresolved Staff Comments 18 ITEM 2 Properties 18 ITEM 3 Legal Proceedings 23 ITEM 4 Mine and Safety Disclosure 23 PART II ITEM 5 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 25 ITEM 6 Selected Financial Data 26 ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 26 ITEM 7 A. Quantitative and Qualitative Disclosures About Market Risk 32 ITEM 8 Financial Statements and Supplementary Data 32 ITEM 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 32 ITEM 9 A. Controls and Procedures ITEM 9 A(T).Controls and Procedures 32 ITEM 9B Other Information 32 34 PART III ITEM 10 Directors, Executive Officers, and Corporate Governance 34 ITEM 11 Executive Compensation 37 ITEM 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 42 ITEM 13 Certain Relationships and Related Transactions, and Director Independence 43 ITEM 14 Principal Accounting Fees and Services 45 PART IV ITEM 15 Exhibits, Financial Statement Schedules 46 SIGNATURES 74 -1- NOTE ABOUT FORWARD-LOOKING STATEMENTS THIS FROM 10-K CONTAINS FORWARD-LOOKING STATEMENTS, SUCH AS STATEMENTS RELATING TO OUR FINANCIAL CONDITION, RESULTS OF OPERATIONS, PLANS, OBJECTIVES, FUTURE PERFORMANCE AND BUSINESS OPERATIONS. THESE STATEMENTS RELATE TO EXPECTATIONS CONCERNING MATTERS THAT ARE NOT HISTORICAL FACTS. THESE FORWARD-LOOKING STATEMENTS REFLECT OUR CURRENT VIEWS AND EXPECTATIONS BASED LARGELY UPON THE INFORMATION CURRENTLY AVAILABLE TO US AND ARE SUBJECT TO INHERENT RISKS AND UNCERTAINTIES. ALTHOUGH WE BELIEVE OUR EXPECTATIONS ARE BASED ON REASONABLE ASSUMPTIONS, THEY ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND THERE ARE A NUMBER OF IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. BY MAKING THESE FORWARD-LOOKING STATEMENTS, WE DO NOT UNDERTAKE TO UPDATE THEM IN ANY MANNER EXCEPT AS MAY BE REQUIRED BY OUR DISCLOSURE OBLIGATIONS IN FILINGS WE MAKE WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE FEDERAL SECURITIES LAWS. OUR ACTUAL RESULTS MAY DIFFER MATERIALLY FROM OUR FORWARD-LOOKING STATEMENTS. PART I ITEM 1. BUSINESS ----------------- GENERAL THE FOLLOWING IS A SUMMARY OF SOME OF THE INFORMATION CONTAINED IN THIS DOCUMENT. UNLESS THE CONTEXT REQUIRES OTHERWISE, REFERENCES IN THIS DOCUMENT TO "HINTO" OR THE "COMPANY" ARE TO HINTO ENERGY, INC. DESCRIPTION OF BUSINESS Hinto Energy, Inc. ("We," "Us," "Our") was organized under the laws of the State of Wyoming on February 13, 1997, as Garner Investments, Inc. On August 18, 2012, we amended our Articles of Incorporation to change our name to Hinto Energy, Inc. We were organized to engage in the acquisition, exploration, and if warranted, development of oil and gas prospects, originally in the rocky mountain region, but during the last 12 months we have begun to focus on other regions that meet our project criteria. COMPANY OVERVIEW SOUTH UINTAH South Uintah Oil and Gas, Inc. ("South Uintah") was incorporated in the State of Colorado in March 2011. In January 2012, as a result of a Share Exchange Agreement, South Uintah became a wholly-owned subsidiary of the Company. South Uintah has interests in approximately 5,366 gross acres in the Central part of the Uintah Basin, at Natural Buttes, Utah from a farmout. The acreage is located in a prolific gas production area from multiple hydrocarbon reservoirs such as: Castlegate, Mancos, Dakota, Buck Tongue, Emery, Frontier and Prairie Canyon. The upper zones above 9,800 feet (approximately) are precluded in the farmout and the overall targets will be zones from 9,800 feet to 16,000 feet. HINTO ENERGY The Company intends to be a low cost and effective producer of hydrocarbons and intends to develop the business model and corporate strategy as discussed herein. The Company's approach to lease acquisition, development and production is founded on the discipline of ONLY acquiring leases in areas of proven production. In most cases the leases that are under consideration have at one time contained producing oil or gas wells and currently have production or shut-in wells that are viable for work over and or re-completion. In addition, the Company attempts to seek our leases and producing properties that generate oil and gas at a depth of 6,500 feet or less, where rework and drilling costs -2- are typically less. There are hundreds of wells in our area of interest that meet these criteria. In many instances, the wells were shut-in during a period of declining oil and gas prices and in most cases are ideal for our business model. Our business model is simple; strict adherence to lease acquisition surrounded by proven production, offering well workovers, re-completion, and enhanced oil recovery opportunities in the known producing formations, with long term production potential at a low cost of development, maintenance, and operation. The Company is NOT an exploration company, per se; rather it seeks leases with discovered oil and gas with current or prior production. One strategy that is quickly growing in prominence and application with respect to petroleum is to use a development program approach. We describe our development plan approach as a set of techniques utilizing the injection of specific fluids such as: water, steam, natural gas, carbon dioxide, nitrogen, and various chemicals and surfactants intended to increase the amount of oil that can ultimately be extracted from any oil field. In addition, we intend to utilize some non-traditional techniques to gain better access to oil and gas, such as drilling short radius laterals and near well bore fracturing that does not use chemicals. Many oil exploration and production companies are using development program approaches to maximize the potential of old oil fields. CORPORATE STRATEGY Our corporate strategy in developing our operations and evaluating potential acquisitions is as follows. ACHIEVE CONSISTENT RESERVE GROWTH THROUGH REPEATABLE DEVELOPMENT We intend to achieve consistent reserve growth over the next five years through a combination of acquisitions, rework and drilling. In 2014, we focused our efforts achieving production increases as a result of our re-work and re-completion activities on our Natural Buttes, Cisco and Mason Lakes projects. In 2015, we intend to continue to focus on our acquisition, re-completion, initial drilling and development programs. We anticipate that the majority of future reserve and production growth will come through the acquisition of production, the execution of our drilling and re-completion program, and on development activities on prospects of which we are aware, which include proved and unproved locations. Our targets generally will consist of locations in fields that demonstrate low variance in well performance, which leads to predictable and repeatable field development. Our reserve estimates, if any, may change continuously and we intend to evaluate such reserve estimates internally on a frequent basis -- quarterly if warranted -- with independent engineering evaluation on an annual basis. Deviations in the market prices of both crude oil and natural gas and the effects of acquisitions, dispositions, development and any successful exploration activities may have a significant effect on the quantities and future values of our reserves, if any. MAINTAIN HIGH PERCENTAGE OWNERSHIP AND OPERATIONAL CONTROL OVER OUR ASSET BASE We intend to retain a high degree of operational control over our asset base, through a high average Working Interest or acting as the operator in our areas of significant activity. This is designed to provide us with controlling interests in a multi-year inventory of drilling locations, positioning us for reserve and production growth through our drilling operations. We plan to control the timing, level and allocation of our drilling capital expenditures and the technology and methods utilized in the planning, drilling and completion process on related targets. We believe this flexibility to opportunistically pursue low risk exploration and development projects relating to selected prospects may provide us with a meaningful competitive advantage. ACQUIRE AND MAINTAIN ACREAGE POSITIONS IN HIGH POTENTIAL RESOURCE PLAYS We believe that our intended acquisition and development in known production prospects should be supplemented with exploratory efforts that may lead to new discoveries in the future. We intend to continually evaluate our opportunities and pursue potential opportunities that take advantage of our strengths. We are examining -3- potential prospects, which have gained substantial interest within the exploration and production sector due to their relatively under-explored nature and the potential for meaningful hydrocarbon recoveries. There are other mid-size and large independent exploration and production companies conducting drilling activities in these plays. DEVELOP IMPROVED TECHNICS TO OBTAIN GREATER DAILY PRODUCTION AND HIGHER ULTIMATE OIL AND GAS RECOVERY The Company implemented a plan of action to develop its own proprietary equipment design for boring lateral holes that extend into productive formations from the bores of existing wells. The engineering design provides for the potential to bore holes up to 300 feet out from the well bore with a diameter of from 1 to 2 inches at depths up to 2,000 feet. The Company believes based on its research that this process will bypass near well bore plugging and damage and open significant surface area from which low pressure shallow oil reserves can be recovered. To date the Company has expended approximately $200,000 in time and materials on the project, capitalizing approximately $74,000 of such expenses, and expects initial field trials in the second quarter or 2014. Ultimately, the engineering design will provide for drilling of small laterals at depths up to 4,000 feet. PURSUE A DISCIPLINED ACQUISITION STRATEGY IN OUR CORE AREAS OF OPERATION We intend to also focus on growing through targeted acquisitions. Although drilling prospects may provide us with the opportunity to grow reserves and production without acquisitions, we continue to evaluate acquisition opportunities, primarily in our core areas of operation. OIL AND GAS PROJECTS Our initial projects are centered on the Uintah Basin of Utah and in Musselshell County, Montana. In August 2014, we purchased a 100% working interest in 8 wells in a second field in Musselshell County, Montana. In October 2014, we purchased a 75% non-operating interest in an exploratory well and 64 acres in Medina, Ohio. MUSSELSHELL COUNTY, MONTANA - MASON LAKES FIELD In June 2013, the Company acquired all right and title to oil and gas leases in the Federal Unit for the 1st Cat Creek formation for 559 gross acres in the Musselshell County, Montana. Later in June 2013, the Company acquired all right and title to additional oil and gas leases for 722 gross acres in the Mason Lakes Field area from S & L Energy, Inc. Approximately 120 gross acres are for formations other than the 1st Cat Creek formation in the Federal Unit mentioned previously. The other 602 gross acres are held by production from the Mason Lakes Federal Unit. The acquired property included 6 wells in a field to be water flooded that needed the wells and field gathering system to be re-worked. By the end of 2013, new production lines had been installed, existing lines repaired along with installation of oil/water separators and tank relocation. During 2014, the Company reworked the two production wells with larger pumping systems and increased fluids production in the first half of 2014. Beginning in the spring of 2014, the field began consistent oil production and is typically producing averaging 20bbls to 30bbls a day. Production zones are from 4,000 to 5,500 feet deep and include the 1st Cat Creek and Amsden formations. Deeper drilling prospects such as the Heath shale will also be evaluated for prospective opportunity. RAGGED POINT OIL FIELD, MUSSELSHELL COUNTY, MONTANA In August 2014, the Company acquired an additional 8 oil wells and 640 acres in the Ragged Point Oil Field, approximately 40 miles to the east of the Mason Lakes Field in Musselshell County. The wells have production depths ranging from 3,500 feet to 3,800 feet with production zones in the Tyler Sand formation. -4- The Ragged Point acreage allows for 40 acre spacing for oil in the Tyler sands, but reduced spacing may yield higher ultimate recovery. In September 2014, the Company began to evaluate the property and develop a re-work program for the property. The initial plan is to begin production through reworking and bringing some wells online for production. Evaluation of early results will assist in determining added rework needed as well as evaluating the potential to drill an additional 8 oil wells on the property. In October 2014, the Company started pumping units on 2 of the wells to get an indication of production opportunities. GEOLOGY - MUSSELSHELL COUNTY, MONTANA - MASON LAKE FIELD AND RAGGED POINT FIELD The properties are located in the Mason Lake field and the Ragged Point field in Central Montana overlying the Amsden (Alaska Bench) Formation which is late Mississippian to Early Pennsylvanian in age. Prior to the Mississippian time, the area of central Montana was covered by the sea, upon the withdrawal of the water and erosion, during the early Pennsylvanian time was the deposition of the Amsden Group, the Tyler and Amsden formations. The both formations are a series of sandstone, shale and limestone. The unconformities located within the Amsden Group resulted in wide variation in both thickness and the lithology of the Amsden Group rocks. This is seen in the difference of well depths in the two fields to reach the separate formations. The Amsden was exposed to weathering throughout the Permian and Triassic and should have well developed secondary porosity and permeability. The Amsden Formation overlays the Tensleep Formation and is above the Heath Formation, traditionally known as the Pennsylvanian Tyler Sand Play area. The rocks are consistently limestone or shale. The Heath Formation has is recognized as the source rock for most of the oil produced in Central Montana. Other sources of oil production in this region are the Cat Creek Anticline and from the Cretaceous reservoirs in the Mason Lake field. The source of the Cat Creek and Cretaceous Mason Lake pools is unknown because the oil gravity is too high to be typed. MEDINA COUNTY, OHIO In October 2014, the Company acquired a 75% interest in 64 gross acres and an exploratory well in Medina County, Ohio. The Company will retain a 75% non-operated interest in this initial well and any future wells developed on this property. Hinto has also established a 36 square mile AMI (area of mutual interest) with the operator, which could provide for additional drilling opportunities. The Operator drilled and completed the well during December 2014 - January 2015. In mid-January, the state of Ohio approved the well for production and initial production began in the first quarter of 2015. The operator is determining the optimum pumping rate and time. In addition, as the well is producing gas in addition to oil, the Operator is taking steps to link to a pipeline to sell the gas production. GEOLOGY - MEDINA COUNTY Medina County is located on the Appalachian geosyncline which includes both the Berea sands and the Ohio shale stratigraphic levels. This area of Ohio has had a lengthy history of production with multiple producing zones at shallower depths, which is why initial plans are focused drilling into the Berea Sandstone, the Clinton Sandstone, the Trenton Limestone and the Rose Run Sandstone, which has been a long term producers at 500 to 5000 feet. CISCO SPRING FIELD PROPERTIES, UTAH In June 2012, the Company acquired certain oil and gas wells and related assets in the Greater Cisco area of the Uintah Basin in Grand County, Utah. The Cisco Springs Field is known to produce from the channel sands in the Mancos, Dakota -5- and Morrison formations, with natural gas production from the Mancos and Dakota formations. Target formations often have stacked pay zones at depths from 500 to 2,200 feet. The assets acquired include 4,783 gross acres in the Cisco Spring Fields with an 80% Net Revenue Interest (NRI) and approximately 3,827 net acres. The property includes 27 wells, some on production, some that need to be re-worked, connected to a gas pipeline, or offset drilled. The Company began a rework program in early 2014. In June 2013, the Company expanded its holdings in the Cisco Springs area when it acquired a 100 percent Working Interest in Pride Ventures interest in approximately 4,400 acres. The property included 8 gas wells that need to be re-worked or offset drilled. The leases acquired also included a natural gas gathering system connected to a local pipeline that greatly simplifies collection and sale of natural gas from existing Company gas wells in the area. During the 4th Quarter of 2014, the Company began re-work efforts on 2 of these gas wells. NATURAL BUTTES Our interest in Natural Buttes was acquired by our wholly-owned subsidiary, South Uintah Gas Properties, Inc. ("South Uintah") via a farmout in approximately 5,366 gross and 4,887 net acres within the Central part of the Uintah Basin, at Natural Buttes, a prolific area for gas production from multiple hydrocarbon reservoirs such as: Castlegate, Mancos, Dakota, Buck Tongue, Emery, Frontier and Prairie Canyon. The upper zones above approximately 9,800 feet are precluded in the farmout and the overall targets will be zones from 9,800 feet to 16,000 feet. In 2012, we began the re-work of Federal Conoco 22-1, a well which was drilled in 1972 to a depth of 20,053 feet. We believe that the well was shut in, primarily due to low gas prices at the time, mechanical production issues and a lack of proximity to a gas pipe line. We completed a surface pipeline connection that is approximately 2,000 foot long to the Anadarko pipeline in late 2011, the early part of 2012. We have reviewed the drilling, geological and engineering files for the Conoco Federal No. 22-1 Well. Our evaluation indicates that the well has significant hydrocarbon potential in both the Frontier and the Upper Mancos Formations, and that by utilizing best available completion and stimulation techniques, commercial production, may be possible. Generally, adjacent to the farmout acreage that includes the Conoco Federal No. 22-1 Well is our adjacent acreage, which contains approximately 5,336 gross and 4,887 net acres. If we drill this acreage on 160 acre spacing up to an additional of 27 wells can be drilled. We believe there is potential for significant gas resources. Total Field Development Costs are estimated to be $150 million to drill and complete up to 27 wells over a 7.5 year development period. None of this financing for drilling has been obtained and there is no assurance that such financing could be obtained. GEOLOGY - CISCO FIELDS AND NATURAL BUTTES The geology unique to the north side of the Uintah Basin, has led to the creation of oil and gas potential seldom seen anywhere else on earth. Referring to the figure below entitled "Stratigraphic Chart of the Uintah Basin", shows the thick Green River Formation lying on top of the over-pressurized Wasatch Formation. When properly drilled, completed, and stimulated, and with the initiation of appropriate pressure maintenance or other EOR procedures, the Green River has proven, for several companies, to be a cash generator of significant potential. In shallower zones lies the Uintah Formation that has generated impressive production in its long history. The massive overburden pressure and depth of the formations on the north side of the Basin have created thick, diverse multi-prospect targets for oil and gas -6- production that begins with some of the deepest high pressured natural gas potential in the world, continuing upwards through the geologic strata to the younger formations occurring in the Devonian, Mississippian, Pennsylvanian, Permian, Triassic, Jurassic, Cretaceous, and Tertiary Ages. Possible productive zones in the prospect area are the Madison Formation of Mississippian age, up through the Chinle (including Navajo Sandstone and Nugget), Morrison, Dakota Sandstone, Frontier, Mancos Shale, Mesa Verde, North Horn, Current Creek, Wasatch, and Wasatch Transition Formations. The Cisco fields projects is situated on the Uncompahgre Uplift, a fault-fold feature (a structure formed during the creation of the Rocky Mountains during the Paleozoic era) which separates the Paradox basin in the south from the Piceance and Uinta basins in the north. The trap is best described as the structure in which the hydrocarbons have accumulated. The trap within the Cisco Springs field is likely to be a stratigraphic pinch-out, (layers deposited within the basin and onto the flanks of the Uncompahgre Uplift pinch out as the reach the steeper sides of the Uplift). Sediments in the Cisco Springs area are mainly of Upper Jurassic and Lower Cretaceous in age and are composed of sandstone and shales lying unconformably (a break in the geological timeline between rocks beneath the Jurassic, Cretaceous rocks and the Pre-Cambrian rocks) on an igneous and metamorphic Pre-Cambrian basement. The source rock for the Dakota sandstone is the Mancos shale which lies on top of the Dakota formation. The origin of the gas within the Cedar Mountain formation is considered to be biogenic due to the high calorific value between 880 to 1,000 BTUs (Nighthawk Energy, Plc.). The source of the hydrocarbons within the Upper Jurassic Entrada and Morrison Formations is the Pennsylvanian (Carboniferous) rocks found within the Paradox basin. The quality of hydrocarbons in the Upper Jurassic ranges from 25 to 38 API oils (a medium to light weight oil) with gas having the calorific value (CV) at 1,094 to 1,210 BTU. COMPETITION, MARKETS, REGULATION AND TAXATION COMPETITION. There are a large number of companies and individuals engaged in the exploration for minerals and oil and gas; accordingly, there is a high degree of competition for desirable properties. Almost all of the companies and individuals so engaged have substantially greater technical and financial resources than we do. MARKETS. The availability of a ready market for oil and gas discovered, if any, will depend on numerous factors beyond our control, including the proximity and capacity of refineries, pipelines, and the effect of state regulation of production and of federal regulations of products sold in interstate commerce, and recent intrastate sales. The market price of oil and gas are volatile and beyond our control. The market for natural gas is also unsettled, and gas prices have increased dramatically in the past four years with substantial fluctuation, seasonally and annually. There generally are only a limited number of gas transmission companies with existing pipelines in the vicinity of a gas well or wells. In the event that producing gas properties are not subject to purchase contracts or that any such contracts terminate and other parties do not purchase our gas production, there is no assurance that we will be able to enter into purchase contracts with any transmission companies or other purchasers of natural gas and there can be no assurance regarding the price which such purchasers would be willing to pay for such gas. There presently exists an oversupply of gas in the certain areas of the marketplace due to pipeline capacity, the extent and duration of which is not known. Such oversupply may result in restrictions of purchases by principal gas pipeline purchasers. -7- EFFECT OF CHANGING INDUSTRY CONDITIONS ON DRILLING ACTIVITY. Lower oil and gas prices have caused a decline in drilling activity in the U.S. at this time. However, such reduced activity has also resulted in a decline in drilling costs, lease acquisition costs and equipment costs, and an improvement in the terms under which drilling prospects are generally available. We cannot predict what oil and gas prices will be in the future and what effect those prices may have on drilling activity in general, or on our ability to generate economic drilling prospects and to raise the necessary funds with which to drill them. FEDERAL REGULATIONS. GOVERNMENTAL REGULATION AND ENVIRONMENTAL CONSIDERATION. Oil and Gas: The oil and gas business in the United States is subject to regulation by both federal and state authorities, particularly with respect to pricing, allowable rates of production, marketing and environmental matters. The production of crude oil and gas has, in recent years, been the subject of increasing state and federal controls. No assurance can be given that newly imposed or changed federal laws will not adversely affect the economic viability of any oil and gas properties we may acquire in the future. Federal income and "windfall profit" taxes have in the past affected the economic viability of such properties. The above paragraphs only give a brief overview of potential state and federal regulations. Because we have only acquired specific properties, and because of the wide range of activities in which we may participate, it is impossible to set forth in detail the potential impact federal and state regulations may have on us. THE DEPARTMENT OF ENERGY. The Department of Energy Organization Act (Pub. L. No. 95-91) became effective October 1, 1977. Under this Act various agencies, including the Federal Energy Administration (FEA) and the Federal Power Commission (FPC), have been consolidated to constitute the cabinet-level Department of Energy (DOE). The Economic Regulatory Administration (ERA), a semi-independent administration within the DOE, now administers most of the regulatory programs formerly managed by the FEA, including oil pricing and allocation. The Federal Energy Regulatory Commission (FERC), an independent agency within the DOE, has assumed the FPC's responsibility for natural gas regulation. CRUDE OIL AND NATURAL GAS LIQUIDS PRICE AND ALLOCATION REGULATION. Pursuant to Executive Order Number 12287, issued January 28, 1981, President Reagan lifted all existing federal price and allocation controls over the sale and distribution of crude oil and natural gas liquids. Executive Order Number 12287 was made effective as of January 28, 1981, and consequently, sales of crude oil and natural gas liquids after January 27, 1981 are free from federal regulation. The price for such sales and the supplier-purchaser relationship will be determined by private contract and prevailing market conditions. As a result of this action, oil which may be sold by us will be sold at deregulated or free market prices. At various times, certain groups have advocated the reestablishment of regulations and control on the sale of domestic oil and gas. STATE REGULATIONS. Our production of oil and gas, if any, will be subject to regulation by state regulatory authorities in the states in which we may produce oil and gas. In general, these regulatory authorities are empowered to make and enforce regulations to prevent waste of oil and gas and to protect correlative rights and opportunities to produce oil and gas as between owners of a common reservoir. Some regulatory authorities may also regulate the amount of oil and gas produced by assigning allowable rates of production. -8- ENVIRONMENTAL LAWS. Oil and gas exploration and development are specifically subject to existing federal and state laws and regulations governing environmental quality and pollution control. Such laws and regulations may substantially increase the costs of exploring for, developing, or producing oil and gas and may prevent or delay the commencement or continuation of a given operation. All of our operations involving the exploration for or the production of any minerals are subject to existing laws and regulations relating to exploration procedures, safety precautions, employee health and safety, air quality standards, pollution of stream and fresh water sources, odor, noise, dust, and other environmental protection controls adopted by federal, state and local governmental authorities as well as the right of adjoining property owners. We may be required to prepare and present to federal, state or local authorities data pertaining to the effect or impact that any proposed exploration for or production of minerals may have upon the environment. All requirements imposed by any such authorities may be costly, time consuming, and may delay commencement or continuation of exploration or production operations. It may be anticipated that future legislation will significantly emphasize the protection of the environment, and that, as a consequence, our activities may be more closely regulated to further the cause of environmental protection. Such legislation, as well as future interpretation of existing laws, may require substantial increases in equipment and operating costs to us and delays, interruptions, or a termination of operations, the extent to which cannot now be predicted. TITLE TO PROPERTIES. We are not the record owner of our interest in our properties and rely instead on contracts with the owner or operator of the property, pursuant to which, among other things, we have the right to have our interest placed of record. As is customary in the oil and gas industry, a preliminary title examination will be conducted at the time unproved properties or interests are acquired by us. Prior to commencement of drilling operations on such acreage and prior to the acquisition of proved properties, we will conduct a title examination and attempt extremely significant defects before proceeding with operations or the acquisition of proved properties, as we may deem appropriate. Our properties are subject to royalty, overriding royalty and other interests customary in the industry, liens incident to agreements, current taxes and other burdens, minor encumbrances, easements and restrictions. Although we are not aware of any material title defects or disputes with respect to its undeveloped acreage, to the extent such defects or disputes exist, we would suffer title failures. BACKLOG OF ORDERS. We currently have no orders for sales at this time. GOVERNMENT CONTRACTS. We have no government contracts. COMPANY SPONSORED RESEARCH AND DEVELOPMENT. We are not conducting any research. NUMBER OF PERSONS EMPLOYED. As of December 31, 2014, Hinto had one full-time employee. George Harris, Gary Herick, David Keller, Kevin Blair and Max Sommer, officers and directors of Hinto, have Consulting and/or Corporate Advisor Agreements with our subsidiary South Uintah, which are on a month - to month basis. George Harris works up to 40 hours per week pursuant to his Consulting Agreement. The other Officers and Directors work on an as needed part-time basis up to 25 hours per week. In -9- addition, the Company has a petroleum engineer under contract, working 60 hours per month. On February 28, 2015, Mr. Sommer resigned as a director of the Company and his consulting agreement was canceled at that time. ITEM 1A. RISK FACTORS ---------------------- FORWARD LOOKING STATEMENTS THIS DOCUMENT INCLUDES FORWARD-LOOKING STATEMENTS, INCLUDING, WITHOUT LIMITATION, STATEMENTS RELATING TO HINTO'S PLANS, STRATEGIES, OBJECTIVES, EXPECTATIONS, INTENTIONS AND ADEQUACY OF RESOURCES. THESE FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES, AND OTHER FACTORS THAT MAY CAUSE THE COMPANY'S ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY THE FORWARD-LOOKING STATEMENTS. THESE FACTORS INCLUDE, AMONG OTHERS, THE FOLLOWING: OUR ABILITY OF TO IMPLEMENT OUR BUSINESS STRATEGY; ABILITY TO OBTAIN ADDITIONAL FINANCING; HINTO LIMITED OPERATING HISTORY; UNKNOWN LIABILITIES ASSOCIATED WITH FUTURE ACQUISITIONS; ABILITY TO MANAGE GROWTH; SIGNIFICANT COMPETITION; ABILITY TO ATTRACT AND RETAIN TALENTED EMPLOYEES; AND FUTURE GOVERNMENT REGULATIONS; AND OTHER FACTORS DESCRIBED IN THIS FILING OR IN OTHER OF HINTO'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. HINTO IS UNDER NO OBLIGATION, TO PUBLICLY UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE. RISK FACTORS RELATED TO OUR COMPANY OUR BUSINESS HAS AN OPERATING HISTORY OF ONLY A SHORT PERIOD OF TIME AND IS UNPROVEN AND THEREFORE RISKY. We have only very recently begun operations under the business plan discussed herein. Potential investors should be made aware of the risk and difficulties encountered by a new enterprise in the oil and gas industry, especially in view of the intense competition from existing businesses in the industry. WE HAVE A LACK OF REVENUE HISTORY AND HAVE A SHORT HISTORY OF OPERATIONS. We were formed on February 13, 1997 for the purpose of engaging in any lawful business and have adopted a plan to engage the acquisition, exploration, and if warranted, development of natural resource properties. We have only recently in the past three fiscal years recognized revenues from our operations. During the year ended December 31, 2014, we did recognize revenues of $475,630 compared to $65,615 during the year ended December 31, 2013. We are not profitable and the business effort is considered to be in an early stage of operations. We must be regarded as a new or development venture with all of the unforeseen costs, expenses, problems, risks and difficulties to which such ventures are subject. WE ARE NOT DIVERSIFIED AND WE WILL BE DEPENDENT ON ONLY ONE BUSINESS. Because of the limited financial resources that we have, it is unlikely that we will be able to diversify our operations. Our probable inability to diversify our activities into more than one area will subject us to economic fluctuations within the energy industry and therefore increase the risks associated with our operations due to lack of diversification. WE CAN GIVE NO ASSURANCE OF SUCCESS OR PROFITABILITY TO OUR INVESTORS. There is no assurance that we will ever operate profitably. There is no assurance that we will generate revenues or profits, or that the market price of our common stock will be increased thereby. -10- WE MAY HAVE A SHORTAGE OF WORKING CAPITAL IN THE FUTURE WHICH COULD JEOPARDIZE OUR ABILITY TO CARRY OUT OUR BUSINESS PLAN. Our capital needs consist primarily of expenses related to geological evaluation, general and administrative and potential exploration participation and could exceed $1,000,000 in the next twelve months. Such funds are not currently committed. If we find oil and gas reserves to exist on a prospect we will need substantial additional financing to fund the necessary exploration and development work. Furthermore, if the results of that exploration and development work are successful, we will need substantial additional funds for continued development. We will not receive proceeds from this offering to conduct such work and, therefore, we will need to obtain the necessary funds either through debt or equity financing, some form of cost-sharing arrangement with others, or the sale of all or part of the property. There is no assurance that we will be successful in obtaining any financing. These various financing alternatives may dilute the interest of our shareholders and/or reduce our interest in the properties. WE WILL NEED ADDITIONAL FINANCING FOR WHICH WE HAVE NO COMMITMENTS, AND THIS MAY JEOPARDIZE EXECUTION OF OUR BUSINESS PLAN. We have limited funds, and such funds may not be adequate to carry out the business plan in the oil and gas industry. Our ultimate success depends upon our ability to raise additional capital. We have not investigated the availability, source, or terms that might govern the acquisition of additional capital and will not do so until it determines a need for additional financing. If we need additional capital, we have no assurance that funds will be available from any source or, if available, that they can be obtained on terms acceptable to us. If not available, our operations will be limited to those that can be financed with our modest capital. WE MAY IN THE FUTURE ISSUE MORE SHARES WHICH COULD CAUSE A LOSS OF CONTROL BY OUR PRESENT MANAGEMENT AND CURRENT STOCKHOLDERS. We may issue further shares as consideration for the cash or assets or services out of our authorized but unissued common stock that would, upon issuance, represent a majority of the voting power and equity of our Company. The result of such an issuance would be those new stockholders and management would control our Company, and persons unknown could replace our management at this time. Such an occurrence would result in a greatly reduced percentage of ownership of our Company by our current shareholders, which could present significant risks to investors. WE HAVE WARRANTS AND OPTIONS ISSUED AND OUTSTANDING WHICH ARE CONVERTIBLE INTO OUR COMMON STOCK. A CONVERSION OF SUCH EQUITY INSTRUMENTS COULD HAVE A DILUTIVE EFFECT TO EXISTING SHAREHOLDERS. At December 31, 2014, we have warrants issued and outstanding exercisable into 1,160,000 shares of our common stock at ranges from $0.25 to $1.25 per share and options issued and outstanding exercisable into 1,700,000 shares of common stock at $0.50 per share. They are exercisable in whole or in part. The exercise of the warrants and/or options into shares of our common stock could have a dilutive effect to the holdings of our existing shareholders. The 1,700,000 options are held by management of the Company. WE WILL DEPEND UPON MANAGEMENT BUT WE MAY AT TIMES HAVE LIMITED PARTICIPATION OF MANAGEMENT. Our directors are also acting as our officers. We will be heavily dependent upon their skills, talents, and abilities, as well as several consultants to us, to implement our business plan, and may, from time to time, find that the inability of the officers, directors and consultants to devote their full-time attention to our business results in a delay in progress toward implementing our business plan. Consultants may be employed on a part-time basis under a contract to be determined. -11- Our directors and officers are, or may become, in their individual capacities, officers, directors, controlling shareholder and/or partners of other entities engaged in a variety of businesses. Thus, our officers and directors may have potential conflicts including their time and efforts involved in participation with other business entities. Each officer and director of our business is engaged in business activities outside of our business, and the amount of time they devote as Officers and Directors, with the exception of George Harris, Chief Executive Officer and Chief Financial Officer, to our business will be up to 25 hours per week. Mr. Harris devotes up to 40 hours per week. (See "Executive Team") Because investors will not be able to manage our business, they should critically assess all of the information concerning our officers and directors. We do not know of any reason other than outside business interests that would prevent them from devoting full-time to our Company, when the business may demand such full-time participation. OUR OFFICERS AND DIRECTORS MAY HAVE CONFLICTS OF INTERESTS AS TO CORPORATE OPPORTUNITIES WHICH WE MAY NOT BE ABLE OR ALLOWED TO PARTICIPATE IN. Presently there is no requirement contained in our Articles of Incorporation, Bylaws, or minutes which requires officers and directors of our business to disclose to us business opportunities which come to their attention. Our officers and directors do, however, have a fiduciary duty of loyalty to us to disclose to us any business opportunities which come to their attention, in their capacity as an officer and/or director or otherwise. Excluded from this duty would be opportunities which the person learns about through his involvement as an officer and director of another company. We have no intention of merging with or acquiring business opportunities from any affiliate or officer or director. WE HAVE AGREED TO INDEMNIFICATION OF OFFICERS AND DIRECTORS AS IS PROVIDED BY WYOMING STATUTE. Wyoming Statutes provide for the indemnification of our directors, officers, employees, and agents, under certain circumstances, against attorney's fees and other expenses incurred by them in any litigation to which they become a party arising from their association with or activities our behalf. We will also bear the expenses of such litigation for any of our directors, officers, employees, or agents, upon such person's promise to repay us therefore if it is ultimately determined that any such person shall not have been entitled to indemnification. This indemnification policy could result in substantial expenditures by us that we will be unable to recoup. OUR DIRECTORS' LIABILITY TO US AND SHAREHOLDERS IS LIMITED Wyoming Revised Statutes exclude personal liability of our directors and our stockholders for monetary damages for breach of fiduciary duty except in certain specified circumstances. Accordingly, we will have a much more limited right of action against our directors than otherwise would be the case. This provision does not affect the liability of any director under federal or applicable state securities laws. RISK FACTORS RELATING TO OUR BUSINESS OUR BUSINESS, THE OIL AND GAS BUSINESS HAS NUMEROUS RISKS WHICH COULD RENDER US UNSUCCESSFUL. The search for new oil and gas reserves frequently results in unprofitable efforts, not only from dry holes, but also from wells which, though productive, will not produce oil or gas in sufficient quantities to return a profit on the costs incurred. There is no assurance we will find or produce oil or gas from any of the wells we have acquired or which may be acquired by us, nor are there any assurances that if we ever obtain any production it will be profitable. (See "Business and Properties") WE HAVE SUBSTANTIAL COMPETITORS WHO HAVE AN ADVANTAGE OVER US IN RESOURCES AND MANAGEMENT. We are and will continue to be an insignificant participant in the oil and gas business. Most of our competitors have significantly greater financial resources, technical expertise and managerial capabilities than us and, consequently, we will be at a competitive disadvantage in identifying and -12- developing or exploring suitable prospects. Competitor's resources could overwhelm our restricted efforts to acquire and explore oil and gas prospects and cause failure of our business plan. WE WILL BE SUBJECT TO ALL OF THE MARKET FORCES IN THE ENERGY BUSINESS, MANY OF WHICH COULD POSE A SIGNIFICANT RISK TO OUR OPERATIONS. The marketing of natural gas and oil which may be produced by our prospects will be affected by a number of factors beyond our control. These factors include the extent of the supply of oil or gas in the market, the availability of competitive fuels, crude oil imports, the world-wide political situation, price regulation, and other factors. Current economic and market conditions have created dramatic fluctuations in oil prices. Any significant decrease in the market prices of oil and gas could materially affect our profitability of oil and gas activities. There generally are only a limited number of gas transmission companies with existing pipelines in the vicinity of a gas well or wells. In the event that producing gas properties are not subject to purchase contracts or that any such contracts terminate and other parties do not purchase our gas production, there is assurance that we will be able to enter into purchase contracts with any transmission companies or other purchasers of natural gas and there can be no assurance regarding the price which such purchasers would be willing to pay for such gas. There may, on occasion, be an oversupply of gas in the marketplace or in pipelines; the extent and duration may affect prices adversely. Such oversupply may result in reductions of purchases and prices paid to producers by principal gas pipeline purchasers. (See "Our Business and Competition, Markets, Regulation and Taxation.") WE BELIEVE INVESTORS SHOULD CONSIDER CERTAIN NEGATIVE ASPECTS OF OUR OPERATIONS. DRY HOLES: We may expend substantial funds acquiring and potentially participating in exploring properties which we later determine not to be productive. All funds so expended will be a total loss to us. TECHNICAL ASSISTANCE: We will find it necessary to employ technical assistance in the operation of our business. As of the date of this Prospectus, we have not contracted for any technical assistance. When we need it such assistance is likely to be available at compensation levels we would be able to pay. UNCERTAINTY OF TITLE: We will attempt to acquire leases or interests in leases by option, lease, farmout or by purchase. The validity of title to oil and gas property depends upon numerous circumstances and factual matters (many of which are not discoverable of record or by other readily available means) and is subject to many uncertainties of existing law and our application. GOVERNMENT REGULATIONS: The area of exploration of natural resources has become significantly regulated by state and federal governmental agencies, and such regulation could have an adverse effect on our operations. Compliance with statutes and regulations governing the oil and gas industry could significantly increase the capital expenditures necessary to develop our prospects. NATURE OF OUR BUSINESS: Our business is highly speculative, involves the commitment of high-risk capital, and exposes us to potentially substantial losses. In addition, we will be in direct competition with other organizations which are significantly better financed and staffed than we are. GENERAL ECONOMIC AND OTHER CONDITIONS: Our business may be adversely affected from time to time by such matters as changes in general economic, industrial and international conditions; changes in taxes; oil and gas prices and costs; excess supplies and other factors of a general nature. OUR BUSINESS IS SUBJECT TO SIGNIFICANT WEATHER INTERRUPTIONS. Our activities may be subject to periodic interruptions due to weather conditions. Weather-imposed restrictions during certain times of the year on roads accessing properties could adversely affect our ability to benefit from production on such properties or could increase the costs of drilling new wells because of delays. -13- RESERVE ESTIMATES DEPEND ON MANY ASSUMPTIONS THAT MAY TURN OUT TO BE INACCURATE. ANY MATERIAL INACCURACIES IN THESE RESERVE ESTIMATES OR UNDERLYING ASSUMPTIONS WILL MATERIALLY AFFECT THE QUANTITIES AND PRESENT VALUE OF OUR RESERVES. THE COMPANY'S CURRENT ESTIMATES OF RESERVES COULD CHANGE, POTENTIALLY IN MATERIAL AMOUNTS, IN THE FUTURE, IN PARTICULAR DUE TO THE RECENT SIGNIFICANT DECLINE IN COMMODITY PRICES. The process of estimating crude oil and natural gas reserves is complex and inherently imprecise. It requires interpretation of available technical data and many assumptions, including assumptions relating to current and future economic conditions, production rates, drilling and operating expenses, and commodity prices. Any significant inaccuracy in these interpretations or assumptions could materially affect our estimated quantities and present value of our reserves. See PART I, ITEM 2 for information about our estimated crude oil and natural gas reserves, PV-10, and Standardized Measure of discounted future net cash flows as of December 31, 2014. In order to prepare reserve estimates, we must project production rates and the amount and timing of development expenditures. Our booked proved undeveloped reserves must be developed within five years from the date of initial booking under SEC reserve rules. Changes in the timing of development plans that impact our ability to develop such reserves in the required time frame could result in fluctuations in reserves between periods as reserves booked in one period may need to be removed in a subsequent period. We must also analyze available geological, geophysical, production and engineering data in preparing reserve estimates. The extent, quality and reliability of this data can vary with the uncertainty of decline curves and the ability to model heterogeneity of the porosity, permeability and pressure relationships in unconventional resources. The process also requires economic assumptions, based on historical data but projected into the future, about matters such as crude oil and natural gas prices, drilling and operating expenses, capital expenditures, taxes and availability of funds. The prices used in calculating our estimated proved reserves are, in accordance with SEC requirements, calculated by determining the unweighted arithmetic average of the first-day-of-the-month commodity prices for the preceding 12 months. Commodity prices declined significantly in the fourth quarter of 2014 and if such prices do not increase significantly, our future calculations of estimated proved reserves will be based on lower commodity prices which could result in our having to remove non-economic reserves from our proved reserves in future periods. Actual future production, crude oil and natural gas prices, revenues, taxes, development expenditures, operating expenses and quantities of recoverable crude oil and natural gas reserves will vary and could vary significantly from our estimates. Any significant variance could materially affect the estimated quantities and present value of our reserves, which in turn could have an adverse effect on the value of our assets. In addition, we may adjust estimates of proved reserves, potentially in material amounts, to reflect production history, results of exploration and development, prevailing crude oil and natural gas prices and other factors, many of which are beyond our control. THE PRESENT VALUE OF FUTURE NET REVENUES FROM OUR PROVED RESERVES WILL NOT NECESSARILY BE THE SAME AS THE CURRENT MARKET VALUE OF OUR ESTIMATED CRUDE OIL AND NATURAL GAS RESERVES AND, IN PARTICULAR, MAY BE REDUCED DUE TO THE RECENT SIGNIFICANT DECLINE IN COMMODITY PRICES. You should not assume the present value of future net revenues from our proved reserves is the current market value of our estimated crude oil and natural gas reserves. In accordance with SEC rules, we base the estimated discounted future net revenues from proved reserves on the 12-month unweighted arithmetic average of the first-day-of-the-month commodity prices for the preceding twelve months. Actual future prices may be materially higher or lower than the SEC pricing used in the calculations. Actual future net revenues from crude oil and natural gas properties will be affected by factors such as: - the actual prices we receive for sales of crude oil and natural gas; - the actual cost and timing of development and production expenditures; -14- - the timing and amount of actual production; and - changes in governmental regulations or taxation. The timing of both our production and our incurrence of expenses in connection with the development and production of crude oil and natural gas properties will affect the timing and amount of actual future net revenues from proved reserves, and thus their actual present value. In addition, the 10% discount factor we use when calculating discounted future net revenues may not be the most appropriate discount factor based on interest rates in effect from time to time and risks associated with our reserves or the crude oil and natural gas industry in general. WE MAY BE REQUIRED TO WRITE DOWN THE CARRYING VALUES OF OUR CRUDE OIL AND NATURAL GAS PROPERTIES IF CRUDE OIL PRICES REMAIN AT THEIR CURRENT LEVELS OR DECLINE FURTHER. Accounting rules require that we periodically review the carrying values of our crude oil and natural gas properties for possible impairment. Based on specific market factors, prices, and circumstances at the time of prospective impairment reviews, and the continuing evaluation of development plans, production data, economics and other factors, we may be required to write down the carrying values of our crude oil and natural gas properties. A write-down results in a non-cash charge to earnings. We have incurred impairment charges in the past and may incur additional impairment charges in the future, particularly if crude oil prices remain at their currently low levels or decline further, which could have a material adverse effect on our results of operations for the periods in which such charges are taken WE ARE SUBJECT TO SIGNIFICANT OPERATING HAZARDS AND UNINSURED RISK IN THE ENERGY INDUSTRY. Our proposed operations will be subject to all of the operating hazards and risks normally incident to exploring, drilling for and producing oil and gas, such as encountering unusual or unexpected formations and pressures, blowouts, environmental pollution and personal injury. We will maintain general liability insurance but we have not obtained insurance against such things as blowouts and pollution risks because of the prohibitive expense. Should we sustain an uninsured loss or liability, or a loss in excess of policy limits, our ability to operate may be materially adversely affected. WE ARE SUBJECT TO FEDERAL INCOME TAX LAWS AND CHANGES THEREIN WHICH COULD ADVERSELY IMPACT US. Federal income tax laws are of particular significance to the oil and gas industry in which we engage. Legislation has eroded various benefits of oil and gas producers and subsequent legislation could continue this trend. Congress is continually considering proposals with respect to Federal income taxation which could have a material adverse effect on our future operations and on our ability to obtain risk capital which our industry has traditionally attracted from taxpayers in high tax brackets. WE ARE SUBJECT TO SUBSTANTIAL GOVERNMENT REGULATION IN THE ENERGY INDUSTRY WHICH COULD ADVERSELY IMPACT US. The production and sale of oil and gas are subject to regulation by state and federal authorities, the spacing of wells and the prevention of waste. There are both federal and state laws regarding environmental controls which may necessitate significant capital outlays, resulting in extended delays, materially affect our earnings potential and cause material changes in the in our proposed business. We cannot predict what legislation, if any, may be passed by Congress or state legislatures in the future, or the effect of such legislation, if any, on us. Such regulations may have a significant affect on our operating results. -15- RISK FACTORS RELATED TO OUR STOCK THE REGULATION OF PENNY STOCKS BY SEC AND FINRA MAY DISCOURAGE THE TRADABILITY OF OUR SECURITIES. We are a "penny stock" company. Our securities are subject to a Securities and Exchange Commission rule that imposes special sales practice requirements upon broker-dealers who sell such securities to persons other than established customers or accredited investors. For purposes of the rule, the phrase "accredited investors" means, in general terms, institutions with assets in excess of $5,000,000, or individuals having a net worth in excess of $1,000,000, excluding the primary residence, or having an annual income that exceeds $200,000 (or that, when combined with a spouse's income, exceeds $300,000). For transactions covered by the rule, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser's written agreement to the transaction prior to the sale. Effectively, this discourages broker-dealers from executing trades in penny stocks. Consequently, the rule will affect the ability of purchasers in this offering to sell their securities in any market that might develop therefore because it imposes additional regulatory burdens on penny stock transactions. In addition, the Securities and Exchange Commission has adopted a number of rules to regulate "penny stocks". Such rules include Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Securities and Exchange Act of 1934, as amended. Because our securities constitute "penny stocks" within the meaning of the rules, the rules would apply to us and to our securities. The rules will further affect the ability of owners of shares to sell our securities in any market that might develop for them because it imposes additional regulatory burdens on penny stock transactions. Shareholders should be aware that, according to Securities and Exchange Commission, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include (i) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (ii) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (iii) "boiler room" practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (iv) excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and (v) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired consequent investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities. WE WILL PAY NO FORESEEABLE DIVIDENDS IN THE FUTURE. We have not paid dividends on our common stock and do not ever anticipate paying such dividends in the foreseeable future. OUR INVESTORS MAY SUFFER FUTURE DILUTION DUE TO ISSUANCES OF SHARES FOR VARIOUS CONSIDERATIONS IN THE FUTURE. There may be substantial dilution to our shareholders purchasing in this Offering as a result of future decisions of the Board to issue shares without shareholder approval for cash, services, or acquisitions. At December 31, 2014, we have warrants issued and outstanding exercisable into 1,160,000 shares of our common stock at ranges from $0.25 to $1.25 per share. In addition, we have options exercisable into 1,700,000 shares of our common stock at a price of $0.50 per share. The warrants and options are exercisable in whole or in part. The exercise of the warrants and/or options into shares of our common stock could have a dilutive effect to the holdings of our existing shareholders. The options are held by management of the Company. -16- RULE 144 SALES IN THE FUTURE MAY HAVE A DEPRESSIVE EFFECT ON OUR STOCK PRICE. All of the outstanding shares of common stock held by our present officers, directors, and affiliate stockholders are "restricted securities" within the meaning of Rule 144 under the Securities Act of 1933, as amended. As restricted Shares, these shares may be resold only pursuant to an effective registration statement or under the requirements of Rule 144 or other applicable exemptions from registration under the Act and as required under applicable state securities laws. Rule 144 provides in essence that a person who has held restricted securities for six months, under certain conditions, sell every three months, in brokerage transactions, a number of shares that does not exceed the greater of 1.0% of a company's outstanding common stock or the average weekly trading volume during the four calendar weeks prior to the sale. There is no limit on the amount of restricted securities that may be sold by a nonaffiliate after the owner has held the restricted securities for a period of six month. A sale under Rule 144 or under any other exemption from the Act, if available, or pursuant to subsequent registration of shares of common stock of present stockholders, may have a depressive effect upon the price of the common stock in any market that may develop. OUR COMMON STOCK MAY BE VOLATILE, WHICH SUBSTANTIALLY INCREASES THE RISK THAT YOU MAY NOT BE ABLE TO SELL YOUR SHARES AT OR ABOVE THE PRICE THAT YOU MAY PAY FOR THE SHARES. Because of the limited trading market for our common stock and because of the possible price volatility, you may not be able to sell your shares of common stock when you desire to do so. The inability to sell your shares in a rapidly declining market may substantially increase your risk of loss because of such illiquidity and because the price for our Securities may suffer greater declines because of our price volatility. The price of our common stock that will prevail in the market after this offering may be higher or lower than the price you may pay. Certain factors, some of which are beyond our control, that may cause our share price to fluctuate significantly include, but are not limited to the following: o Variations in our quarterly operating results; o Loss of a key relationship or failure to complete significant transactions; o Additions or departures of key personnel; and o Fluctuations in stock market price and volume. Additionally, in recent years the stock market in general, and the over-the-counter markets in particular, have experienced extreme price and volume fluctuations. In some cases, these fluctuations are unrelated or disproportionate to the operating performance of the underlying company. These market and industry factors may materially and adversely affect our stock price, regardless of our operating performance. In the past, class action litigation often has been brought against companies following periods of volatility in the market price of those companies common stock. If we become involved in this type of litigation in the future, it could result in substantial costs and diversion of management attention and resources, which could have a further negative effect on your investment in our stock. ANY NEW POTENTIAL INVESTORS WILL SUFFER A DISPROPORTIONATE RISK AND THERE WILL BE IMMEDIATE DILUTION OF EXISTING INVESTOR'S INVESTMENTS. Our present shareholders have acquired their securities at a cost significantly less than that which the investors purchasing pursuant to shares will pay for their stock holdings or at which future purchasers in the market may pay. Therefore, any new potential investors will bear most of the risk of loss. OUR BUSINESS IS HIGHLY SPECULATIVE AND THE INVESTMENT IS THEREFORE RISKY. Due to the speculative nature of our business, it is probable that the investment in shares offered hereby will result in a total loss to the investor. Investors should be able to financially bear the loss of their entire investment. Investment should, therefore, be limited to that portion of -17- discretionary funds not needed for normal living purposes or for reserves for disability and retirement. ITEM 1B. UNRESOLVED STAFF COMMENTS ---------------------------------- Not Applicable. ITEM 2. PROPERTIES ------------------- REAL ESTATE. None. PATENTS AND PATENT APPLICATIONS. None. OIL AND GAS PROPERTIES. Our oil and natural gas properties are located in the Uintah Basin, Utah in two fields, the Natural Buttes Field in Uintah County and the Greater Cisco Springs Field in Grand County and the Mason Lakes Field, the Ragged Point Field in Musselshell County, Montana and the Medina County field in Ohio. The following is a description of our properties in the Uintah Basin. NATURAL BUTTES The Company purchased a farmout of deep right interests in approximately 5,366 gross and 4,887 net acres in the central part of the Uintah Basin at Natural Buttes in Utah in July 2011, amended in December 2011. The purchase price of the farmout interest was $478,200, made up of $303,000 in cash, $175,000 in notes payable and $200 in common stock (2,000,000 shares.) The upper zones above approximately 9,800 feet are precluded in the farmout and the overall targets will be zones from 9,800 feet to 16,000 feet. During the year ended December 31, 2014, due to decreases in gas prices, the Company did not expend any funds as far as improvement of the well. In 2013, the Company expended $223,554 to further evaluate the best method to apply to enhance well production. During the year ended December 31, 2012, the Company subsequently expended an additional $198,500 in cash for the completion of a gas pipeline connection, surface equipment and initial well rework on the 22-1 Well. Since the leases are Held By Production and given low gas prices, the Company had placed expenditures for additional production enhancements on hold. CISCO PACIFIC On May 9, 2012, the Company and Pacific Energy and Mining Company ("Pacific") entered into an Asset Purchase and Sale Agreement ("The Pacific Agreement"). On May 30, 2012, the Company closed the transaction. As part of the Pacific Agreement, the Company acquired certain oil and gas wells and related assets in the Greater Cisco area of the Uintah Basin in Grand County, Utah. The assets acquired include 4,783 gross acres in the Cisco Fields with an 80% Net Revenue Interest (NRI) and approximately 3,827 net acres. The property includes 27 wells that need to be re-worked, connected to a gas pipeline, or offset drilled. In exchange for such oil and gas wells and related assets, the Company paid $325,000 in a combination of cash and a convertible promissory note, as follows: $175,000 cash; and a $150,000 convertible promissory note. The convertible promissory note has an interest rate of 8% and is due May 30, 2013. The -18- convertible promissory note and accrued interest could have been converted into shares of the Company's restricted common stock at $1.00 per share, but the note was instead repaid on June 1, 2013. During 2014 and 2013, the Company did expend some development costs to assess the potential for additional production enhancement from existing wells. This included pulling pumps, rods and tubing, cleaning casing, logging and clearing lower well bores. Much of this work was done in anticipation of establishing wells on which to test the Company's lateral drilling technology.. On June 17, 2013, the Company expanded its holdings in the Cisco Springs area when it acquired a 100 percent Working Interest in Pride Ventures interest in approximately 4,400 acres. The property included 9 gas wells that need to be re-worked or offset drilled. The leases acquired also included a natural gas gathering system connected to a local pipeline that greatly simplifies collection and sale of natural gas from existing Company gas wells in the area. In exchange for such mineral estates, the Company paid a total of $100,000 in a combination of cash and stock as follows: - $75,000 in cash; and - $25,000 in the form of 50,000 shares of the Company's restricted common stock. MUSSELSHELL COUNTY, MONTANA - MASON LAKES FIELD On June 14, 2013, the Company entered into a Purchase and Sale agreement with Jake Oil, LLC and Mr. Eric Olsen and acquired all right and title to oil and gas leases in the Federal Unit for the 1st Cat Creek formation for 559 gross acres in the Musselshell County, Montana. The property included 6 wells in a field to be water flooded that needed the wells and field gathering system to be re-worked. During the second half of 2013 the Company worked to bring field production back online. As of the end of 2013, new production lines had been installed, existing lines repaired along with installation of oil/water separators and tank relocation. The injection well received State approval for use and the field began its initial trial production, with the water source well, water injection well and two production wells operating. The Company plans to rework the two production wells with larger pumping systems and increase fluids production in the first half of 2014. The Company believes it currently has sufficient capital to complete this project. After evaluation the increased production, the current field development plan, which calls for the drilling of several production and injection wells, will be re-evaluated for implementation. In exchange for such mineral estates, the Company paid a total of $25,000 in a combination of cash and Carried Working Interest as follows: - $25,000 in cash; and - 5 percent Carried Working Interest On June 14, 2013, the Company acquired all right and title to additional oil and gas leases for 722 gross acres in the Mason Lakes Field area from S & L Energy, Inc. Approximately 120 gross acres are for formations other than the 1st Cat Creek formation Federal Unit mentioned previously. The other 602 gross acres are held by production through the Mason Lakes Federal Unit. The Company plans to create a drilling development plan for this acreage in the next 12 to 24 months. Initial target production zones are from 4,000 to 5,500 feet deep and include the 1St Cat Creek and Amsden formations. Deeper drilling prospects such as the Heath shale will also be evaluated for future opportunity. In exchange for such oil and gas leases, the Company paid $101,100 in a combination of cash and stock, as follows: - $65,000 in cash; and - $36,100 payable in restricted common stock valued at $0.58 per share (2/3 of the June 4, 2013 closing price of $0.87) for a total of 62,242 shares. -19- MEDINA COUNTY, OHIO In October 2014, the Company acquired a 75% interest in an exploratory well in Medina County, Ohio in exchange for an investment of $150,000. The Company will retain a 75% non-operated interest in this initial well and any future wells developed on this property. Hinto has also established a 36 square mile AMI (area of mutual interest) with the operator, which could provide for additional drilling opportunities. The Operator drilled and completed the well during December 2014 - January 2015. In mid-January, the state of Ohio approved the well for production and currently pumping times and rates are being determined.. In addition, as the well is producing gas in addition to oil, the Operator is taking steps to link to a pipeline to sell the gas production. TITLE TO PROPERTIES As is customary in the oil and natural gas industry, we generally conduct a preliminary title examination prior to the acquisition of properties or leasehold interests. Prior to commencement of operations on such acreage, a thorough title examination will usually be conducted and any significant defects will be remedied before proceeding with operations. We believe the title to our leasehold properties is good, defensible and customary with practices in the oil and natural gas industry, subject to such exceptions that we believe do not materially detract from the use of such properties. With respect to our properties of which we are not the record owner, we rely instead on contracts with the owner or operator of the property or assignment of leases, pursuant to which, among other things, we generally have the right to have our interest placed on record. Our properties are generally subject to royalty, overriding royalty and other interests customary in the industry, liens incident to agreements, current taxes and other burdens, minor encumbrances, easements and restrictions. We do not believe any of these burdens will materially interfere with our use of these properties. SUMMARY OF OIL AND NATURAL GAS RESERVES The following disclosures for the year ended December 31, 2013 does not include any reserves attributable to our interests in the Natural Buttes or Musselshell County, Montana areas. The disclosures for the year ended December 31, 2014, does not include any reserves attributable to our 75% non-operating interest in the working interest in the lease in Medina County, Ohio, as drilling work was in process at December 31, 2014. PROVED RESERVES The following table sets forth our estimated net proved reserves as of December 31, 2014 and 2013. RESERVES 2014 2013 ---------------------- ------------------------ ESTIMATED PROVED RESERVES DATA: OIL NATURAL GAS OIL NATURAL GAS (BBLS) (MSCF) (BBLS) (MSCF) ---------- ----------- ---------- ------------- Proved developed reserves 70,828 61,521 23,000 20,800 Proved undeveloped reserves 41,515 419,233 313,000 282,010 ---------- ----------- ---------- ------------- Total proved reserves 112,343 480,754 336,000 302,810 ========== =========== ========== ============= Estimates of proved developed and undeveloped reserves are inherently imprecise and are continually subject to revision based on production history, results of additional exploration and development, price and production cost changes and other factors. See "-- Qualifications of Technical Persons and Internal Controls Over Reserves Estimation Process." -20- PROVED UNDEVELOPED RESERVES Our proved undeveloped reserves at December 31, 2014 and 2013 were 41,515 Bbls of oil and 419,233 MScf of natural gas and 313,000 Bbls of oil and 282,010 Mscf of gas, respectively. QUALIFICATIONS OF TECHNICAL PERSONS AND INTERNAL CONTROLS OVER RESERVES ESTIMATION PROCESS Our reserve report for the years ended December 31, 2014 and 2013 was prepared by RSM Resources, LLC, by an independent petroleum engineer ("RSM"). RSM estimated, in accordance with petroleum engineering and evaluation principles set forth in the Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserve Information promulgated by the Society of Petroleum Engineers ("SPE Standards") and definitions and guidelines established by the SEC, 100% of the proved reserve information for our onshore properties as of December 31, 2014 and 2013. The principal person at RSM who prepared the reserve report is Mr. Richard K. Dembowski. Mr. Dembowski is the principal engineer at RSM Resources, LLC. RSM has over 25 years in the oil and gas industry in such areas as technical consulting, litigation support and reserve reporting. Mr. George Harris, the Company's Chief Executive Officer and Chief Financial Officer, is primarily responsible for the determination of and the presentation of the reserves presented by the Company. The technical persons responsible for preparing the reserves estimates presented herein meet the requirements regarding qualifications, independence, objectivity and confidentiality set forth in the Standards Pertaining to the Estimating and Auditing of Oil and Natural Gas Reserves Information promulgated by the Society of Petroleum Engineers. Our internal staff of geoscience professionals who work closely with our independent petroleum engineer to ensure the integrity, accuracy and timeliness of data furnished to them in their reserves estimation process. We review with them our properties and discuss methods and assumptions used in their preparation of our fiscal year-end reserves estimates. While we have no formal committee specifically designated to review reserves reporting and the reserves estimation process, a copy of each of the RSM reserve report is reviewed with representatives of RSM and our internal technical staff before we disseminate any of the information. Additionally, our senior management reviews and approves the final reserve report and any significant internally estimated changes to our proved reserves on an annual basis. Estimates of oil and natural gas reserves are projections based on a process involving an independent third party engineering firm's collection of all required geologic, geophysical, engineering and economic data, and such firm's complete external preparation of all required estimates and are forward-looking in nature. These reports rely upon various assumptions, including assumptions required by the SEC, such as constant oil and natural gas prices, operating expenses and future capital costs. The process also requires assumptions relating to availability of funds and timing of capital expenditures for development of our proved undeveloped reserves. These reports should not be construed as the current market value of our reserves. The process of estimating oil and natural gas reserves is also dependent on geological, engineering and economic data for each reservoir. Because of the uncertainties inherent in the interpretation of this data, we cannot be certain that the reserves will ultimately be realized. Our actual results could differ materially. See "Note 13 -- Supplemental Information Relating to Oil and Natural Gas Producing Activities (Unaudited)" to our audited consolidated financial statements for additional information regarding our oil and natural gas reserves. Under SEC rules, proved reserves are those quantities of oil and natural gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations. The term "reasonable certainty" implies a high degree of confidence that the quantities of oil and/or natural gas actually recovered will equal or exceed the estimate. To achieve reasonable certainty, RSM employs technologies consistent with the standards established by the -21- Society of Petroleum Engineers. The technologies and economic data used in the estimation of our proved reserves include, but are not limited to, well logs, geologic maps and available downhole and production data, seismic data and well test data. SUMMARY OF OIL AND NATURAL GAS PROPERTIES AND PROJECTS PRODUCTION, PRICE AND COST HISTORY The following table presents net production sold, average sales prices and production costs and expenses for the year ended December 31, 2014 and 2013. During the year ended December 31, 2014 and 2013, the Company did not have any production of or sales of natural gas. For the Years Ending December 31, 2014 2013 -------------- ---------------- Revenue Oil sales $ 475,630 $ 65,615 Net production sold Oil (Bbl) 6,580 1,262 Average sales prices Oil ($/Bbl) $72.28 $51.91 Costs and expenses (per Bbl) Production expenses $59.20 $251.09

~~Page~~DEVELOPED ~~TABLE~~AND OFUNDEVELOPED ~~CONTENTS~~ACREAGE ~~PART~~The Ifollowing ~~ITEM~~table 1presents ~~Business~~our 2total ~~ITEM~~gross 1and A.net ~~Risk~~developed ~~Factors~~and 12undeveloped ~~ITEM~~acreage 1by B.region ~~Unresolved~~as ~~Staff~~of ~~Comments~~December 1931, ~~ITEM~~2014 ~~2 Properties 19 ITEM 3 Legal Proceedings 23 ITEM 4 Mine~~ and ~~Safety~~2013: ~~Disclosure~~2014 242013 ~~PART~~---- II---- ~~ITEM~~Developed 5Acres ~~Market~~Undeveloped ~~for~~Acres ~~Registrant's~~Developed ~~Common~~Acres ~~Equity,~~Undeveloped ~~Related~~Acres ~~Stockholder~~----------------------- ~~Matters~~---------------------- 25----------------------- ~~and~~---------------------- ~~Issuer~~Gross(1) ~~Purchases~~Net of(2) ~~Equity~~Gross ~~Securities~~Net ~~ITEM~~Gross 6Net ~~Selected~~Gross ~~Financial~~Net ~~Data~~----------- 27----------- ~~ITEM~~----------- 7---------- ~~Management's~~----------- ~~Discussion~~----------- ~~and~~----------- ~~Analysis~~---------- ofNatural ~~Financial~~Buttes ~~Condition~~80 ~~and~~64 285,575 ~~Results~~5,079 of80 ~~Operations~~64 ~~ITEM~~5,575 75,079 A.Cisco ~~Quantitative~~Springs ~~and~~550 ~~Qualitative~~496 ~~Disclosures~~8,938 ~~About~~8,610 ~~Market~~550 ~~Risk~~496 338,938 ~~ITEM~~ 8,610 ~~Financial~~Mason ~~Statements~~Lakes ~~and~~520 ~~Supplementary~~494 ~~Data~~602 33562 ~~ITEM~~520 9494 ~~Changes~~602 in562 ~~and~~Ragged ~~Disagreements~~Point ~~with~~20 ~~Accountants~~15 on44 ~~Accounting and~~ 33 ~~Financial~~- ~~Disclosure~~- ~~ITEM~~- 9- A.----------- ~~Controls~~----------- ~~and~~----------- ~~Procedures~~---------- 34----------- ~~ITEM~~----------- 9B----------- ~~Other~~---------- ~~Information~~Total ~~35 PART III ITEM 10 Directors~~1,170 ~~Executive Officers~~1,069 and Corporate Governance 36 ITEM 11 Executive Compensation 38 ITEM 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 44 ITEM 13 Certain Relationships and Related Transactions15,159 ~~and Director 45 Independence ITEM~~ 14,284 ~~Principal~~1,150 ~~Accounting~~1,054 ~~Fees and Services 48 PART IV ITEM~~ 15,115 ~~Exhibits~~14,251 ~~Financial~~=========== ~~Statement~~=========== ~~Schedules~~=========== 49========== ~~SIGNATURES~~=========== 51=========== =========== ==========

(1) "Gross" means the total number of acres in which we have a working interest. (2) "Net" means the sum of the fractional working interests that we own in gross acres. -22-

~~Type~~PRODUCTIVE WELLS The following table presents the total gross and net productive wells by area and by oil or natural gas completion as of ~~Equity~~December ~~South~~31, ~~Uintah~~2014 ~~Balance~~and ~~Issued~~2013: By2014 ~~Hinto~~2013 ---- ---- OIL WELLS NATURAL GAS WELLS OIL WELLS NATURAL GAS WELLS --------------------- -------------------- ---------------------- -------------------------- GROSS(1) NET(2) GROSS NET GROSS NET GROSS NET ---------- ---------- --------- ---------- ~~Common~~---------- ~~Stock~~----------- ~~11,446,931~~------------ ~~shares~~------------- ~~11,446,931~~Natural ~~shares~~Buttes ~~Warrants~~- (- 1) ~~6,700,000~~0.62 ~~6,700,000~~- ~~Promissory~~- ~~Note~~1 ~~(2)~~0.62 ~~$375,000~~Cisco ~~$375,000~~Springs (13,4) ~~The~~34 ~~warrants~~28 ~~have~~7 ~~exercise~~7 ~~prices~~34 ~~ranging~~28 ~~from~~7 $07 Mason Lakes 5 4.5075 to- $3- 5 4.0075 ~~per~~- ~~share~~- ~~and~~Ragged ~~terms~~Point ~~ranging~~8 ~~from~~8 2- to- 5- ~~years.~~- ~~(2)~~- ~~The~~- ~~promissory~~Ohio ~~note~~- ~~has~~- a- ~~provision~~- to- ~~convert~~- ~~into~~- ~~shares~~- of---------- ~~common~~---------- ~~stock~~--------- at---------- $0---------- ----------- ------------ ------------- TOTAL 40 33.2075 ~~per~~8 ~~share~~7.62 32 25.75 8 7.62 ========== ========== ========= ========== ========== =========== ============ =============

(1) "Gross" means the total number of wells in which we have a working interest. (2) "Net" means the sum of the fractional working interest that we own in gross wells. (3) The Company has done minimal rework on the 27 oil wells and as it begins a more intensive rework effort it may discover that some of these well may need to be plugged or abandoned. (4) Cisco Springs - The Company has done minimal rework on the 7 gas wells and as it begins a more intensive rework effort, it may discover that some of these well may need to be plugged or abandoned. DRILLING ACTIVITY The Company's operational activities are focused on re-work of existing wells for production purposes. During 2014, the Company expended $1,045,300 in cash for rework on wells not only in the Mason Lake Field, but also the Cisco Field and the Ragged Point Field. In addition, at December 31, 2014, the Company had advanced funds of $140,000 of the $150,000 in connection with its 75% non-operating interest in the well in Medina County, Ohio. During 2013, Company has expended $223,554 in cash for re-work on wells not only in the Natural Buttes field, but also in the Mason Lakes field. At December 31, 2014, the Company had no wells being drilled. ITEM 3. LEGAL PROCEEDINGS -------------------------- Hinto anticipates that it (including current and any future subsidiaries) will from time to time become subject to claims and legal proceedings arising in the ordinary course of business. It is not feasible to predict the outcome of any such proceedings and we cannot assure that their ultimate disposition will not have a materially adverse effect on the Company's business, financial condition, cash flows or results of operations. The Company is not a party to any pending legal proceedings, nor is the Company aware of any civil proceeding or government authority contemplating any legal proceeding as of the date of this filing. ITEM 4. MINING AND SAFETY DISCLOSURE. -------------------------------------- Not Applicable. -23- PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES -------------------------------------------------------------------------------- MARKET INFORMATION There is a limited public trading market for the common stock. The Company's common stock is listed for trading on the OTCBB and the Over The Counter Markets OTCQB and has the symbol "HENI." HIGH LOW QUARTER ENDED: ---------- ---------- December 31, 2014 $ 0.71 $ 0.25 September 30, 2014 $ 0.77 $ 0.51 June 30, 2014 $ 0.80 $ 0.64 March 31, 2014 $ 0.81 $ 0.66 QUARTER ENDED: December 31, 2013 $ 0.89 $ 0.69 September 30, 2013 $ 1.03 $ 0.75 June 30, 2013 $ 1.01 $ 0.79 March 31, 2013 $ 0.99 $ 0.30 HOLDERS There are approximately 137 holders of record of Hinto's common stock as of December 31, 2014. DIVIDEND POLICY Holders of the Company's common stock are entitled to receive such dividends as may be declared by Hinto's board of directors. The Company has not declared or paid any dividends on Hinto's common shares and it does not plan on declaring any dividends in the near future. The Company currently intends to use all available funds to finance the operation and expansion of its business.

~~Developed~~RECENT ~~Acres~~SALES ~~Undeveloped~~OF ~~Acres~~UNREGISTERED SECURITIES During the years ended December 31, 2014 and 2013, the Company made the following sales of its unregistered shares. DATE OF TITLE OF NO. OF CLASS OF SALE SECURITIES SHARES CONSIDERATION PURCHASER ------------------- --------------- --------- ----------------~~---------~~ ~~Gross (1) Net(2) Gross Net~~ ----------------- -------------~~---~~ ----------------- ----------------- ~~Natural~~January ~~Buttes~~2013 80Common 64Shares 5850,~~575~~000 5$425,~~079~~000 ~~Cisco~~Business ~~Pacific~~Associate ~~270~~through ~~216~~February 42013 February Common Shares 10,~~783~~000 3Services Business Associate 2013 March 2013 Common Shares 50,~~827~~000 ~~-----------------~~Interest Business Associate April 2013 Common Shares 850,000 $425,000 Business Associate through June 30, 2013 May 2013 Common Shares 25,000 Services Business Associate April 2013 Common Shares 336,000 $168,000 Warrant Holders Through June 30, 2013 -24-~~--------------~~ June 2013 Common Shares 50,000 Acquisition of Oil Business Associate and Gas Leases June 2013 Common Shares 62,242 Acquisition of Oil Business Associate and Gas Leases April & May Class A --~~---------------~~ $575,000 Business Associates 2013 Convertible Promissory Notes April 2013 Warrant 100,000 Attached to Convertible Business Associate Promissory Note July 2013 Common Shares 664,000 $332,000 Warrant Holders August 2013 Common Shares 23,000 $11,500 Business Associate August 2013 Common Shares 25,000 Services Business Associate October 2013 Common Shares 30,000 Interest Business Associate January 2014 Convertible Promissory ---~~-------------~~ ~~Total~~$2,000,000 ~~350~~Business ~~280~~Associate 10Note February 2014 Common Shares 850,~~358~~000 8$425,~~906~~000 ~~=================~~Business ~~================~~Associates ~~=================~~February ~~================~~2014 ~~(1)~~Common ~~"Gross"~~Shares ~~means~~5,000 ~~the~~Services ~~total~~Business ~~number~~Associates ofFebruary ~~acres~~2014 inCommon ~~which~~Shares we53,124 ~~have~~Interest aBusiness ~~working~~Associate ~~interest.~~May ~~(2)~~2014 ~~"Net"~~Warrant ~~means~~60,000 ~~the~~Services ~~sum~~Business ofAssociate ~~the~~June ~~fractional~~2014 ~~working~~Common ~~interests~~Shares ~~that~~155,000 weServices ~~own~~Business inAssociate ~~gross~~June ~~acres.~~2014 Common Shares 180,000 $90,000 Business Associate June 2014 Common Shares 29,590 Interest Business Associate August 2014 Common Shares 169,209 Interest Business Associate August 2014 Common Shares 90,000 Services Business Associates August 2014 Common Shares 206,303 Interest Business Associates December 2014 Warrant 100,000 Financing Business Associate -25- December 2014 Convertible Promissory --- $400,000 Business Associate Note December 2014 Options 1,700,000 Services Officers and Directors

EXEMPTION FROM REGISTRATION CLAIMED All of the above sales by the Company of its unregistered securities were made by the Company in reliance upon Rule 506 of Regulation D and Section 4(2) of the Securities Act of 1933, as amended (the "1933 Act"). All of the individuals and/or entities that purchased the unregistered securities were either primarily existing shareholders, sophisticated shareholders of the acquire, South Uintah, consultants or sophisticated investors known to the Company and its management, through pre-existing business relationships. All purchasers were provided access to all material information, which they requested, and all information necessary to verify such information and were afforded access to management of the Company in connection with their purchases. All purchasers of the unregistered securities acquired such securities for investment and not with a view toward distribution, acknowledging such intent to the Company. All certificates or agreements representing such securities that were issued contained restrictive legends, prohibiting further transfer of the certificates or agreements representing such securities, without such securities either being first registered or otherwise exempt from registration in any further resale or disposition. ISSUER PURCHASES OF EQUITY SECURITIES Hinto did not repurchase any shares of its common stock during the years ended December 31, 2014 and 2013. ITEM 6. SELECTED FINANCIAL DATA -------------------------------- Not applicable. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS -------------------------------------------------------------------------------- THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH OUR UNAUDITED FINANCIAL STATEMENTS AND NOTES THERETO INCLUDED HEREIN. IN CONNECTION WITH, AND BECAUSE WE DESIRE TO TAKE ADVANTAGE OF, THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, WE CAUTION READERS REGARDING CERTAIN FORWARD LOOKING STATEMENTS IN THE FOLLOWING DISCUSSION AND ELSEWHERE IN THIS REPORT AND IN ANY OTHER STATEMENT MADE BY, OR ON OUR BEHALF, WHETHER OR NOT IN FUTURE FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. FORWARD-LOOKING STATEMENTS ARE STATEMENTS NOT BASED ON HISTORICAL INFORMATION AND WHICH RELATE TO FUTURE OPERATIONS, STRATEGIES, FINANCIAL RESULTS OR OTHER DEVELOPMENTS. FORWARD LOOKING STATEMENTS ARE NECESSARILY BASED UPON ESTIMATES AND ASSUMPTIONS THAT ARE INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC AND COMPETITIVE UNCERTAINTIES AND CONTINGENCIES, MANY OF WHICH ARE BEYOND OUR CONTROL AND MANY OF WHICH, WITH RESPECT TO FUTURE BUSINESS DECISIONS, ARE SUBJECT TO CHANGE. THESE UNCERTAINTIES AND CONTINGENCIES CAN AFFECT ACTUAL RESULTS AND COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN ANY FORWARD LOOKING STATEMENTS MADE BY, OR ON OUR BEHALF. WE DISCLAIM ANY OBLIGATION TO UPDATE FORWARD-LOOKING STATEMENTS. THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S REPORT ON THE COMPANY'S FINANCIAL STATEMENTS AS OF DECEMBER 31, 2014, AND FOR EACH OF THE YEARS IN THE TWO-YEAR PERIOD THEN ENDED, INCLUDES A "GOING CONCERN" EXPLANATORY PARAGRAPH, THAT DESCRIBES SUBSTANTIAL DOUBT ABOUT THE COMPANY'S ABILITY TO CONTINUE AS A GOING CONCERN. -26- PLAN OF OPERATIONS While we have generated increased revenues from our operational activities, these revenues are not sufficient to support our operational activities, which are focused on re-working our existing properties and seeking attractive property acquisitions in order to reach production goals. We have minimal capital and moderate cash. We will continue to need cash infusions from investors or shareholders to provide capital, or loans from any sources, none of which have been arranged nor assured. During the year ended December 31, 2014, we continued our re-work efforts with our Mason Lakes, Montana property, suffering delays during the first quarter due to the severe winter conditions. During the second and third quarters, we saw progress from our re-work and production enhancement efforts and are now producing between 20 to 30 barrels of oil per day from the field. During the third quarter we brought 2 additional wells into production. We continue our re-work efforts on our Cisco, Utah properties and have focused our efforts on specific wells in the property in order to increase production on existing producing wells. On August 13, 2014, the Company and Ragged Point Partners, LLC, entered into a Purchase and Sale Agreement, in which the Company acquired all right and title to oil and gas leases for a total of 640 gross acres in the Ragged Point Oil Field in Musselshell County, Montana. In exchange for the leases, Company paid $150,000 in cash and has a 100% working interest. The leases consist of 8 oil wells and 1 water supply well. The Company has begun the early analysis of the field and wells and is developing a re-work plan for the wells. The Company has initially placed 2 wells on production. On October 15, 2014, the Company entered into an agreement to take a 75% non-operating interest in 64 gross acres and an exploratory well to be drilled in Medina County, Ohio. The Company has also established a 36 square mile AMI (area of mutual interest) with the operator, which could provide for additional drilling opportunities. The Operator completed the well during the first quarter of 2015. Medina County is located on the Appalachian geosyncline which includes the Berea, Clinton and Rose Run sands, the Trenton Limestone and the Ohio shale stratigraphic levels. FINANCING EFFORTS On January 22, 2014, the Company issued a Secured Convertible Promissory Note in exchange for cash of $2,000,000 in order to support continuing operations, seek attractive property acquisitions, fund a project to develop the capacity to do short radius lateral drilling and continue the Company's re-completion and drilling plans in its oil and gas fields in Utah and Montana. The Secured Convertible Promissory Note has a term of 3 years and accrues interest at a rate of 10% per annum with quarterly interest payments starting in July 2014. The Note is convertible into shares of the Company's common stock at a rate of $1.25 per share. Since the stock price was below this at the time of signing the note was issued at a premium so no value is apportioned to the conversion feature when recording the issuance per ASC 470-20-05. The debt and its interest are reported as if it were a nonconvertible debt. Upon Conversion, the stock may be valued at either the book value or the market value. The Note has provisions for issuance of up to 480,000 warrants exercisable for shares of the Company's common stock, such warrants to be issued to the Note holder based on the amount of note principal converted into common stock, if any. The warrants, if issued, would have a term of 3 years from the issuance of the promissory note and an exercise price of $2.00 per share. The Note is secured by the assets consisting of the Company's leases and wells in the Mason Lakes Field in Musselshell County, Montana. On December 31, 2014, the Company issued a Secured Convertible Promissory Note in exchange for cash of $400,000 in order to support continuing operations. The funds were received from the holder of the $2,000,000 secured convertible -27- promissory note disclosed above. As a result of the $400,000 investment certain terms of the $2,000,000 convertible promissory note were amended. The term of the $2,000,000 Convertible Promissory Note was extended for an additional year and the exercise price lowered to $1.00. The Secured Convertible Promissory Note has a term of 3 years and accrues interest at a rate of 10% per annum with quarterly interest payments. The Note is convertible into shares of the Company's common stock at a rate of $1.25 per share. Since the stock price was below this at the time of signing the note was issued at a premium so no value is apportioned to the conversion feature when recording the issuance per ASC 470-20-05. The debt and its interest are reported as if it were a nonconvertible debt. Upon Conversion, the stock may be valued at either the book value or the market value. We will require substantial additional capital to support our existing and proposed future energy operations. We have ONLY DURING THE LATTER HALF OF 2014, STARTED REALIZING REOCCURRING AND CONSISTENT REVENUE, ALTHOUGH INSUFFICIENT TO FULLY SUPPORT CURRENT OPERATIONS. We have NO committed source for any additional funds as of the date hereof. No representation is made that any funds will be available when needed. In the event funds cannot be raised when needed, we may not be able to carry out our business plan, may never achieve sales or royalty income, and could fail in business as a result of these uncertainties. Decisions regarding future prospect acquisitions or other participation activities will be made on a case-by-case basis. We may, in any particular case, decide to participate or decline participation. If participating, we may pay our proportionate share of costs to maintain our proportionate interest through cash flow or debt or equity financing. If participation is declined, we may elect to farmout, non-consent, sell or otherwise negotiate a method of cost sharing in order to maintain some continuing interest in the prospect. RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2014 COMPARED TO THE YEAR ENDED DECEMBER 31, 2013 During the years ended December 31, 2014, the Company recognized revenues of $475,630 from its operational activities compared to $65,615 during the year ended December 31, 2013. Revenues increased by $410,015, primarily as result of increased production of our Mason Lakes Field. Management expects that production in 2015 to continue to increase, as the field in Montana continues to produce on a consistent basis, continued rework efforts in the Cisco and Medina fields and as it looks to grow its production through acquisitions, though given current oil industry conditions, management expects average sales prices to be lower than in 2014. Although management expects to increase production in 2015, management does not expect revenues to be sufficient to cover the near term costs of operations and administrative expenses without additional drilling or acquisitions. During the Years Ended December 31, 2014 2013 ------------------ -------------------- Revenues $475,630 $65,615 Number of Barrels 6,580 bbls 1,262 bbls Average Price Per Barrel $72.28 $51.97 During the year ended December 31, 2014 and 2013, the Company recognized a direct cost of revenue of $501,901 and $389,866, respectively. An increase of $112,035, which is direct result of costs incurred reworking wells to increase production at our Mason Lakes Field during 2014. Direct cost of revenue consists of the following items: -28- INCREASE / 2014 2013 (DECREASE) ------------- ------------- --------------- Field Expenses $ 235,456 $ 318,021 $ (82,565) Well Stimulation 67,790 19,305 48,485 Field utilities 56,699 13,344 43,355 Taxes 29,604 935 28,669 Freight 7 3,920 (3,913) Depletion 26,106 3,896 22,210 Amortization and depreciation 86,239 30,445 55,794 ------------- ------------- --------------- TOTAL $ 501,901 $ 389,866 $ 112,035 During the years ended December 31, 2014, we recognized total operational expenses of $2,066,825 compared to $932,764 during the year ended December 31, 2013, an increase of $1,134,058. The increase was a result of increases of $599,553 in consulting fees, a $436,263 increase in oil gas operating expenses, a $64,370, increase in payroll and a $219,173 increase in investor relation expenses offset by a $112,340 decrease in legal expenses. Increases in consulting and payroll were a result of the addition of staff and the increase in oil and gas operation expenses was a direct result of our increased activities in Montana. During the year ended December 31, 2014, we recognized a net loss of $2,285,340 compared to $1,332,312 during the year ended December 31, 2013. The increase of $953,028 was primarily a result of the $112,035 increase in direct revenue costs, combined with the $1,134,058 increase in operational expenses and an increase of $183,296 in interest expense, offset by the and increase in revenue of $410,015 and a one-time gain on the write off of accrued liabilities of $50,000. LIQUIDITY At December 31, 2014, the Company had total current assets of $404,718, consisting of $356,506 in cash, $30,249 in accounts receivable and $54,164 in deposits. At December 31, 2014, the Company had total current liabilities of $543,325, consisting of accounts payable of $389,683, accrued liabilities of $153,642. At December 31, 2014, the Company had working capital deficit of $139,147. During the year ended December 31, 2014, the Company used $1,027,661 in its operations. During the year ended December 31, 2014, we recognized a net loss of $2,285,340 which was reconciled for non-cash items including: $208,481 in accrued interest converted to stock, $125,000 stock issued for services, $470,900 in options issued to management, $133,238 in amortization, depletion and depreciation expenses and a $50,000 gain on the discount of a promissory note. During the year ended December 31, 2013, the Company used $1,270,927 in its operations. During the year ended December 31, 2013, we recognized a net loss of $1,314,497, which was reconciled for the non-cash items consisting of a $40,123 in interest converted to common stock, $30,000 in stock issued for services, $$40,006 in amortization, depreciation and depletion expense and $38,637 in asset remediation expense. During the year ended December 31, 2014, we used $1,138,548 in our investing activities. $302,000 of which was used to purchase of leases, $133,678 to purchase machinery and equipment, $183,778 in the development of a proprietary technology process and $513,492 in the re-work of wells. During the year ended December 31, 2013, we used $480,566 in our investing activities. $140,000 of which was used to purchase properties, $42,567 to purchase machinery and equipment, $223,554 in the re-work of wells and $74,445 in the development of our technological process. During the year ended December 31, 2014, we received $2,425,000 from our financing activities compared to $1,791,500 during the year ended December 31, 2013. -29- On January 22, 2014, the Company issued a Secured Convertible Promissory Note in exchange for cash of $2,000,000 in order to support continuing operations and the Company's re-completion and drilling plans in its oil and gas fields in Utah and Montana. The Secured Convertible Promissory Note has a term of 3 years and accrues interest at a rate of 10% per annum with quarterly interest payments starting in July 2014. The Note is convertible into shares of the Company's common stock at a rate of $1.25 per share. Since the stock price was below this at the time of signing the note was issued at a premium so no value is apportioned to the conversion feature when recording the issuance per ASC 470-20-05. The debt and its interest are reported as if it were a nonconvertible debt. Upon Conversion, the stock may be valued at either the book value or the market value. The Note has provisions for issuance of up to 480,000 warrants exercisable for shares of the Company's common stock, such warrants to be issued to the Note holder based on the amount of note principal converted into common stock, if any. The warrants, if issued, would have a term of 3 years from the issuance of the promissory note and an exercise price of $2.00 per share. The Note is secured by the assets consisting of the Company's leases and wells in the Mason Lake Field in Musselshell County, Montana. On December 31, 2014, the Company issued a Secured Convertible Promissory Note in exchange for cash of $400,000 in order to support continuing operations. The funds were received from the holder of the $2,000,000 secured convertible promissory note disclosed above. As a result of the $400,000 investment certain terms of the $2,000,000 convertible promissory note were amended. The term of the $2,000,000 Convertible Promissory Note was extended for an additional year and the exercise price lowered to $1.00. The Secured Convertible Promissory Note has a term of 3 years and accrues interest at a rate of 10% per annum with quarterly interest payments. The Note is convertible into shares of the Company's common stock at a rate of $1.00 per share. Since the stock price was below this at the time of signing the note was issued at a premium so no value is apportioned to the conversion feature when recording the issuance per ASC 470-20-05. The debt and its interest are reported as if it were a nonconvertible debt. Upon Conversion, the stock may be valued at either the book value or the market value. SHORT TERM. On a short-term basis, we have not generated revenues sufficient to cover operations. Based on prior history, we will continue to have insufficient revenue to satisfy current and recurring liabilities as the Company continues exploration activities. CAPITAL RESOURCES The Company has only common stock as its capital resource. We have no material commitments for capital expenditures within the next year, however if operations are commenced, substantial capital will be needed to pay for participation, investigation, exploration, acquisition and working capital. NEED FOR ADDITIONAL FINANCING We do not have capital sufficient to meet its cash needs. The Company will have to seek loans or equity placements to cover such cash needs. Once exploration commences, its needs for additional financing is likely to increase substantially. No commitments to provide additional funds have been made by the Company's management or other stockholders. Accordingly, there can be no assurance that any additional funds will be available to us to allow us to cover the Company's expenses as they may be incurred. -30- The Company will need substantial additional capital to support its proposed future energy operations. We have insufficient revenues to cover our corporate costs. The Company has NO committed source for any funds as of the date hereof. No representation is made that any funds will be available when needed. In the event funds cannot be raised when needed, we may not be able to carry out our business plan, may never achieve sufficient sales or royalty income, and could fail in business as a result of these uncertainties. Decisions regarding future participation in exploration wells or geophysical studies or other activities will be made on a case-by-case basis. The Company may, in any particular case, decide to participate or decline participation. If participating, we may pay the proportionate share of costs to maintain the Company's proportionate interest through cash flow or debt or equity financing. If participation is declined, the Company may elect to farmout, non-consent, sell or otherwise negotiate a method of cost sharing in order to maintain some continuing interest in the prospect. CRITICAL ACCOUNTING POLICIES CASH AND CASH EQUIVALENTS The Company considers all highly liquid investments with an original maturity of three months or less and money market instruments to be cash equivalents. OIL AND GAS PROPERTIES, FULL COST METHOD The Company uses the full cost method of accounting for oil and gas producing activities. Costs to acquire mineral interests in oil and gas properties, to drill and equip exploratory wells used to find proved reserves, and to drill and equip development wells including directly related overhead costs and related asset retirement costs are capitalized. Under this method, all costs, including internal costs directly related to acquisition, exploration and development activities are capitalized as oil and gas property costs. Properties not subject to amortization consist of exploration and development costs which are evaluated on a property-by-property basis. Amortization of these unproved property costs begins when the properties become proved or their values become impaired. The Company assesses the realization of unproved properties, taken as a whole, if any, on at least an annual basis or when there has been an indication that impairment in value may have occurred. Impairment of unproved properties is assessed based on management's intention with regard to future exploration and development of individually significant properties and the ability of the Company to obtain funds to finance such exploration and development. If the results of an assessment indicate that the properties are impaired, the amount of the impairment is added to the capitalized costs to be amortized. Costs of oil and gas properties will be amortized using the units of production method. The Company performs a quarterly "ceiling test" calculation to test its oil and gas properties for possible impairment. The primary components impacting this calculation are commodity prices, reserve quantities added and produced, overall development costs, depletion expense, and tax effects. If the net capitalized cost of the Company's oil and gas properties subject to amortization (the carrying value) exceeds the ceiling limitation, the excess would be charged to expense. The ceiling limitation is equal to the sum of the present value discounted at 10% of estimated future net cash flows from proved reserves, the cost of properties not being amortized, the lower of cost or estimated fair value of unproved properties included in the costs being amortized, and all related tax effects. At December 31, 2014, the calculated value of the ceiling limitation exceeded the carrying value of the Company's oil and gas properties subject to the test, and no impairment was necessary. IMPAIRMENT The Company reviews long-lived assets held for use, principally oil and gas leases, for impairment when events or circumstances indicate that their carrying value may not be recoverable. Impairment exists if the carrying amount of the long-lived asset is not recoverable from the discounted cash flows expected from -31- its use and eventual disposition. We determine the amount of the impairment loss by comparing the carrying value of the long-lived asset to its estimated fair value. In the absence of quoted market prices, we determine estimated fair value generally based on the present value of future probability weighted cash flows expected from the continued use and value at sale of the long-lived asset. REVENUE AND ACCOUNTS RECEIVABLE The Company recognizes revenue for its production when the quantities are delivered to, or collected by, the purchaser. Prices for such production are generally defined in sales contracts and are readily determinable based on certain publicly available indices. All transportation costs are included in lease operating expenses. Accounts receivable -- oil and natural gas sales consist of uncollateralized accrued revenues due under normal trade terms, generally requiring payment within 30 to 60 days of production. The Company reviews accounts receivable periodically and reduces the carrying amount by a valuation allowance that reflects its best estimate of the amount that may not be collectible. No valuation allowance was recognized as of December 31, 2014 and 2013. DEPENDENCE ON MAJOR CUSTOMERS For the fiscal years ended December 31, 2014 and 2013, the Company's revenues were attributable to sales of oil to two customers. The Company believes that there are potential alternative purchasers and that it may be necessary to establish relationships with new purchasers. However, there can be no assurance that the Company can establish such relationships and that those relationships will result in an increased number of purchasers. Although the Company is exposed to a concentration of credit risk, the Company believes that all of its purchasers are credit worthy. The Company had no bad debt for the fiscal years ended December 31, 2014 and 2013. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ------------------------------------------------------------------- Our operations do not employ financial instruments or derivatives which are market sensitive. Short term funds are held in non-interest bearing accounts and funds held for longer periods are placed in interest bearing accounts. Large amounts of funds, if available, will be distributed among multiple financial institutions to reduce risk of loss. The Company's cash holdings do not generate interest income. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ---------------------------------------------------- The audited financial statements of Hinto Energy, Inc. for the years ended December 31, 2014 and 2013 for the, appear as pages 48 through 73 at the end of the document. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE -------------------------------------------------------------------------------- None. ITEM 9A. CONTROLS AND PROCEDURES -------------------------------- The Company maintains a system of disclosure controls and procedures that are designed for the purposes of ensuring that information required to be disclosed in the Company's SEC reports is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to the Company's management as appropriate to allow timely decisions regarding required disclosure. Management, consisting of the Company's Chief Executive Officer and Chief Financial Officer (the same individual) after evaluating the effectiveness of the Company's disclosure controls and procedures as defined in Exchange Act Rules 13a-14(c) as of December 31, 2013 (the "Evaluation Date") concluded that -32- as of the Evaluation Date, the Company's disclosure controls and procedures were not effective to ensure that material information relating to the Company would be made known to them by individuals within those entities, particularly during the period in which this annual report was being prepared and that information required to be disclosed in the Company's SEC reports is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms, as discussed further below. Hinto's management is responsible for establishing and maintaining adequate internal control over financial reporting for the company in accordance with as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company's internal control over financial reporting is designed 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. The Company's internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company's assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that the Company's receipts and expenditures are being made only in accordance with authorizations of Hinto's management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on Hinto's financial statements. We have identified certain material weaknesses in internal control over financial reporting relating to a shortage of accounting and reporting personnel due to limited financial resources and the size of our Company, as detailed below: (1) The Company currently does not have, but is in the process of developing formally documented accounting policies and procedures, which includes establishing a well-defined process for financial reporting. (2) Due to the limited size of our accounting department, we currently lack the resources to handle complex accounting transaction. We believe this deficiency could lead to errors in the presentation and disclosure of financial information in our annual, quarterly, and other filings. (3) As is the case with many companies of similar size, we currently a lack of segregation of duties in the accounting department. Until our operations expand and additional cash flow is generated from operations, a complete segregation of duties within our accounting function will not be possible. Considering the nature and extent of our current operations and any risks or errors in financial reporting under current operations and the fact that we have been a small business with limited employees, such items caused a weakness in internal controls involving the areas disclosed above. We have concluded that our internal controls over financial reporting were ineffective as of December 31, 2014, due to the existence of the material weaknesses noted above that we have yet to fully remediate. This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to permanent rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this annual report. -33- There was no change in our internal control over financial reporting that occurred during the fiscal year ended December 31, 2014, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION --------------------------- Not applicable. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE ---------------------------------------------------------------- The following table sets forth information as to persons who currently serve as Hinto Energy, Inc. directors or executive officers, including their ages as of December 31, 2014. NAME AGE POSITION TERM ----------------- ----- ------------------------------------------------- ------ George Harris 65 Chief Executive Officer, Annual Chief Financial Officer and Director Gary Herick 51 Vice President of Finance, Secretary and Director Annual J. David Keller 60 Vice President of Exploration and Development and Director Annual Max Sommer* 83 Director Annual Kevin Blair 43 Director Annual All current directors of the Company were elected by the shareholders on August 18, 2011. The Company's officers were appointed by the Board of Directors on August 18, 2011. With the exception of Mr. Keller, the above officers and directors hold the same positions with South Uintah, Hinto's wholly-owned subsidiary. *On February 28, 2015, Mr. Sommer resigned from the Company's Board of Directors. The officers are elected by the board of directors at the first meeting after each annual meeting of the Company's shareholders and hold office until their successors are duly elected and qualified under Hinto's bylaws. The directors named above will serve until the next annual meeting of Hinto's stockholders. Thereafter, directors will be elected for one-year terms at the annual stockholders' meeting. Officers will hold their positions at the pleasure of the board of directors absent any employment agreement. There is no arrangement or understanding between the directors and officers and any other person pursuant to which any director or officer was or is to be selected as a director or officer. BIOGRAPHICAL INFORMATION GEORGE HARRIS, CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL OFFICER & DIRECTOR. Mr. Harris was appointed the Chief Executive Officer of the Company on June 29, 2012 and its Chief Financial Officer since June 2011. Mr. Harris also serves as the Chief Financial Officer of South Uintah Gas Properties, Inc. From January 2008 to April 2009, Mr. Harris served as the President and Chief Financial Officer for China Wi-Max Communications, Inc. Mr. Harris served as a Senior Vice President at Falkenberg Capital Corporation, a boutique investment bank to the telecommunications community from March 2006 to January 2008. Mr. Harris' experience includes active roles in several technology startups and in his role at Falkenberg, he worked closely with companies that deliver telecommunications and data services utilizing wired and wireless technologies. Mr. Harris is also the President of Harris Products, Inc. and Integrated Components, Inc., where he developed and managed component manufacturing facilities based in the United -34- States and Southern China. Mr. Harris was formerly the Chief Financial Officer at Farm Credit Banks of St. Louis, Missouri and managed a large financial organization with Lucent Technologies. Mr. Harris has been a Certified Public Accountant since 1977 in the state of California, where he worked for Arthur Young and Company, and earned a Bachelor of Science degree in Accounting and an MBA from Pepperdine University. Mr. Harris enhances the Company's Board of Directors, with not only for his management experience, but also with his accounting and public company experience. GARY HERICK, VICE PRESIDENT OF FINANCE & DIRECTOR. Mr. Herick has been a licensed Securities Representative since 1985, involved in different aspects of the business including: IPO's, Retail Accounts, Investment Advisory Accounts, Commodities, Alternative Investments and Venture Capital Funding. From 2001 to 2005, he handled accounts as a Registered Investment Advisor specializing in Alternative Investments and Stock Analysis for managed accounts with Herick Asset Management. He attended the University of Florida from 1981-1985. Mr. Herick enhances the Board of Directors with not only his securities background, but also provides the Board with his knowledge and experience in venture capital. J. DAVID KELLER, VICE PRESIDENT OF EXPLORATION & DEVELOPMENT & DIRECTOR. Mr. Keller has been the Managing Partner and Exploration and Development Manager of Powderhorn Energy of Boulder, Colorado. Mr. Keller founded Powderhorn Energy in 2009. Powderhorn Energy focuses on oil and gas opportunities in the Rocky Mountain Basins. Mr. Keller is responsible for structuring projects to achieve and surpass industry average profitability, cash flow and, especially, upside potential. From 2006 through May 2009, Mr. Keller was the Chief Geophysicist for TTI Exploration in Boulder, Colorado. While there he was responsible for all geoscience technology for project evaluation, exploration, development and exploitation. Mr. Keller received his Bachelor of Science in Geoscience from the University of Texas, Dallas in 1980 and his Master of Science in Geophysics from the Colorado School of Mines in 1987. Mr. Keller provides the Board of Directors with both geology experience and oil and gas industry experience. KEVIN BLAIR, DIRECTOR. Mr. Blair has been the Principal and Attorney for General Capital Partners, LLC of Denver, Colorado, since January 2010. There he has complete business development responsibilities including strategic planning, negotiation of agreements, acquisition of properties, supervision of subcontractors, supervision of personnel, and financial reporting. He was a Private Equity Broker at Capwest Securities, Inc. (Denver, Colorado, from January 2007 to 2010), a federally licensed broker dealer specializing in syndications of private debt and equity securities marketed exclusively to high net worth clients for the purpose of acquiring real estate and energy properties. He is an Attorney and Mergers & Acquisitions Intermediary at Merchant Banking Associates, LLC (Denver, Colorado, from January 2000 to December 2006). Mr. Blair's education is as follows: LLM, University of Denver College of Law, In Progress, Juris Doctorate, University of Denver College of Law, May 1994, Bachelor of Science, Colorado School of Mines, Civil Engineering, May 1989. -35- His Skills, Licenses and Associations include: Admitted to the Colorado Bar, Series 7 Federal Securities License, Series 63 Federal Securities License, Completed Landman Training Course, Real Estate Broker in Colorado, Minnesota, Alabama, and Louisiana, Member of the International Business Brokers Association, Certified Business Intermediary and a Member of the Association for Corporate Growth. Mr. Blair provides the Board of Directors with not only legal experience but also securities and investment experience. MAX P. SOMMER, FORMER DIRECTOR. Mr. Sommer served as a director of the Company from August 2011 through February 2015. Mr. Since 1997, Mr. Sommer has served as the President, Rose Run Energy Company, Inc., providing Consulting and Oil and Gas Production activities mostly in the Appalachian Region. Mr. Sommer provided prospects to Oil and Gas Partnership which drilled and participated in 140 wells. Rose Run Energy sold its production in 2009. Mr. Sommer served as a director of Intercontinental Energy Corporation from 1976-1977 and as a director of Gerber Energy Corporation from 1977-1980, both public reporting companies. Starting in 2013, Mr. Sommer has provided Hinto Energy with consulting services in connection with its oil and gas production activities. Mr. Sommer's received his doctorate degree in Geology-Paleontology in 1955 from the University of Basel, Switzerland. Mr. Sommer's brings to the Board of Directors fifty-five years of experience in operations and management of geological and geophysical exploration activities for oil, gas and minerals in various countries. Mr. Sommer provides the Board of Directors with his experience and knowledge of not only geology, but also oil and gas production. COMMITTEES OF THE BOARD OF DIRECTORS The Company is managed under the direction of its board of directors. EXECUTIVE COMMITTEE The Company does not have an executive committee, at this time. AUDIT COMMITTEE The Company does not have an audit committee at this time. CONFLICTS OF INTEREST - GENERAL. The Company's directors and officers are, or may become, in their individual capacities, officers, directors, controlling shareholder and/or partners of other entities engaged in a variety of businesses. Thus, there exist potential conflicts of interest including, among other things, time, efforts and corporation opportunity, involved in participation with such other business entities. While each officer and director of the Company's business is engaged in business activities outside of its business, the amount of time they devote to our business will be up to approximately 25 hours per week. Mr. Harris, the Company's Chief Executive Officer and Chief Financial Officer, devotes up to 40 hours per week to the Company's business. CONFLICTS OF INTEREST - CORPORATE OPPORTUNITIES Presently no requirement contained in the Company's Articles of Incorporation, Bylaws, or minutes which requires officers and directors of the Company's business to disclose to Hinto business opportunities which come to their attention. The Company's officers and directors do, however, have a fiduciary -36- duty of loyalty to Hinto to disclose to it any business opportunities which come to their attention, in their capacity as an officer and/or director or otherwise. Excluded from this duty would be opportunities which the person learns about through his involvement as an officer and director of another company. The Company has no intention of merging with or acquiring an affiliate, associate person or business opportunity from any affiliate or any client of any such person. ITEM 11. EXECUTIVE COMPENSATION -------------------------------- The following table sets forth the compensation paid to officers and board members during the fiscal years ended December 31, 2014, 2013 and 2012. The table sets forth this information for Hinto Energy, Inc. including salary, bonus, and certain other compensation to the Board members and named executive officers for the past three fiscal years. The compensation paid to Mr. Harris, Herick and Keller in 2011 was paid by South Uintah, the Company's majority shareholder, at the time.

~~Oil~~SUMMARY ~~Wells~~EXECUTIVES ~~Natural~~COMPENSATION ~~Gas~~TABLE ~~Wells~~NON-EQUITY NON-QUALIFIED INCENTIVE DEFERRED ALL PLAN COMPENSATION OTHER STOCK OPTION COMPENSA-~~--------------------------------~~ EARNINGS COMPENSA-~~---------------------------------~~ ~~Gross~~SALARY BONUS AWARDS AWARDS TION TION TOTAL NAME & POSITION YEAR (1$) ~~Net~~(2$) ~~Gross~~(1$) ~~Net~~(2$) ($) ($) ($) ($) ----------------- ------- --------- ----------- ------ ---- ---------~~---~~ ~~Natural Buttes~~ - - ~~1 0.08 Cisco Pacific(3) 27 21~~ - - -------- --------- ------------~~----~~ ---------~~--------~~ -----------~~-----~~ ~~Total~~George 27Harris, 21CEO 1& 2014 187,500 0~~.08~~ ~~=================~~0 ~~================~~277,000 ~~=================~~0 ~~================~~0 0 464,500 CFO (1) ~~"Gross"~~2013 ~~means~~153,000 ~~the~~0 ~~total~~0 ~~number~~0 0 0 0 153,000 2012 127,000 0 0 0 0 0 0 127,000 Gary Herick, VP of ~~wells~~2014 in179,000 ~~which~~0 we0 ~~have~~69,250 a0 ~~working~~0 ~~interest.~~0 248,250 Finance (2) ~~"Net"~~2013 ~~means~~125,000 ~~the~~0 ~~sum~~0 of0 ~~the~~0 ~~fractional~~0 ~~working~~0 ~~interest~~125,000 ~~that~~2012 we140,000 ~~own~~0 in0 ~~gross~~0 ~~wells.~~0 ~~(3)~~0 ~~The~~0 ~~Company~~140,000 ~~has~~J. ~~not~~David ~~become~~Keller, ~~done~~VP ~~minimal~~of ~~rework~~2014 on0 ~~the~~0 0 27,700 ~~wells~~0 ~~and~~0 as0 it27,700 ~~begins~~Exploration a2013 ~~more~~10,000 ~~intensive~~0 ~~rework~~0 ~~effort,~~0 ~~such~~0 ~~work~~0 it0 ~~may~~10,000 ~~discover~~& ~~that~~Development ~~some~~(3) of2012 ~~these~~77,613 ~~well~~0 ~~may~~0 ~~need~~0 to0 be0 ~~plugged~~0 or77,613 ~~abandoned.~~------------------------

(1) Mr. Harris was appointed the Chief Financial Officer on August 18, 2011 and the Chief Executive Officer on June 29, 2012. He serves in the same capacity for South Uintah. Mr. Harris salary was paid pursuant to a consulting agreement with and by South Uintah. In December 2014, Mr. Harris was issued an option exercisable for 1,000,000 shares of the Company's common stock. The option has an exercise price of $0.50 per share, a term of 3 years and is fully vested. The option, using the Black-Scholes pricing module, has a value of $277,000. (2) Mr. Herick was appointed the Vice President of Finance and the Secretary of the Company on August 2011. He serves in the same capacity for South Uintah. Mr. Herick salary was paid pursuant to a consulting agreement with and by South Uintah. In December 2014, Mr. Herick was issued an option exercisable for 250,000 shares of the Company's common stock. The option has an exercise price of $0.50 per share, a term of 3 years and is fully vested. The option using the Black-Scholes pricing module, has a value of $69,250. (3) Mr. J. David Keller was appointed the Vice President of Exploration and Development on August 18, 2011. Mr. Keller holds the same position with South Uintah. In December 2014, Mr. Keller was issued an option exercisable for 100,000 shares of the Company's common stock. The option has an exercise price of $0.50 per share, a term of 3 years and is fully vested. The option, using the Black-Scholes pricing module has a value of $27,700. -37- OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END The following table sets forth certain information concerning outstanding equity awards held by the Chief Executive and Financial Officer and the Company's most highly compensated executive officers for the fiscal year ended December 31, 2014 (the "Named Executive Officers"):

~~DATE~~---------------- OF------------------------------------------------------------------ ~~SALE~~------------------------------------------- ~~TITLE~~OPTION OFAWARDS ~~SECURITIES~~STOCK ~~NO.~~AWARDS ~~OF SHARES CONSIDERATION CLASS OF PURCHASER~~ ---------------- -- ----------- --------------- ------------- ---------- ----------- ---------- --------- ---------- ------------ ~~10/1/2011~~Equity ~~Common~~Equity ~~Shares~~incentive ~~420,000~~incentive ~~$210,000~~Market ~~Business~~plan ~~through~~plan ~~Associates~~value ~~12/31/2011~~awards: ~~1/23/12~~awards: ~~Common~~Equity ~~Shares~~of ~~11,446,931~~Number ~~Shares~~Market or incentive shares of ~~South~~payout ~~Uintah~~plan ~~Shareholders~~Number of ~~Pursuant~~unearned tovalue ~~the~~of ~~Amended~~awards: ~~South~~of ~~Uintah~~units ~~Gas~~shares, ~~Share~~unearned ~~Exchange~~Number ~~and~~of ~~Properties~~shares ~~Acquisition~~of ~~Agreement~~units ~~1/23/12~~or ~~Warrants 2~~shares,~~000,000~~ ~~Warrants~~Number of ~~South~~Number ~~Uintah~~of ~~Warrant~~securities ~~holders~~or ~~Pursuant~~units tostock ~~the~~other ~~Amended~~units ~~South~~or ~~Uintah~~securities ~~Gas~~securities ~~Share~~underlying ~~Exchange~~of ~~and~~stock ~~Properties~~that ~~Acquisition~~rights ~~Agreement~~others ~~1/23/12~~underlying ~~Warrants~~underlying ~~4,700,000~~unexercised ~~Warrants~~Option ofthat ~~South~~have ~~Uintah~~that ~~Warrant~~rights ~~holders~~unexercised ~~Pursuant~~unexercised tounearned ~~the~~exercise ~~Amended~~Option ~~South~~have ~~Uintah~~not ~~Gas~~not ~~Share~~have ~~Exchange~~not ~~and~~that ~~Properties~~have ~~Acquisition~~options ~~Agreement~~ (~~Directors~~#) ~~and~~options ~~Officers~~(#) ~~2/29/12~~options ~~Common~~price ~~Shares~~expiration ~~69,000~~vested ~~Services~~vested ~~Business~~vested ~~Associate~~not ~~3/31/12~~vested ~~Common~~Name ~~Shares~~exercisable ~~410,000~~unexercisable (#) ($~~205,000~~) ~~Business~~date ~~Associate~~(#) ~~April~~($) ~~2012~~(#) ($) ---------------- ~~Common~~------------- ~~Shares~~--------------- ~~55,000~~------------- ~~Services~~---------- ~~Business~~----------- ~~May~~---------- ~~2012~~--------- ~~Associate~~---------- ~~May~~----------- ~~2012~~George ~~Common Shares 205~~1,000 ~~$102~~,~~500~~000 ~~Business~~0 ~~Associate~~0 ~~June~~0.50 ~~2012~~12/31/17 ~~Common~~0 ~~Shares~~0 ~~191,618~~0 ~~Outstanding~~0 ~~Invoices~~Harris ~~Business~~(1) ~~Associate/Affiliate~~---------------- ~~May~~------------- ~~2012~~--------------- ~~Common~~------------- ~~Shares~~---------- ~~25,000~~----------- ~~Interest~~---------- ~~Business~~--------- ~~Associate~~---------- ~~May~~----------- ~~2012~~Gary ~~Convertible~~Herick, ~~- $25~~250,000 ~~Business~~0 ~~Promissory~~0 ~~Note~~0.50 ~~Associate~~12/31/17 ~~Sept~~0 ~~2012~~0 ~~Common~~VP ~~Shares~~of ~~50,724~~Finance ~~Conversion~~(2) of---------------- ~~Convertible~~------------- ~~Business~~--------------- ~~Promissory~~------------- ~~Note~~---------- ~~Associate~~----------- ~~Sep~~---------- ~~t2012~~--------- ~~Common~~---------- ~~Shares~~----------- J. David 100,000 ~~$50,000~~0 ~~Business~~0 ~~Associate~~0.50 ~~Sept~~12/31/17 ~~2012~~0 ~~Common~~0 ~~Shares~~0 230 Keller,~~250~~ ~~Consulting~~VP ~~Services~~of ~~Business~~Exploration ~~Associate~~& ~~Dec~~Develop. ~~2012~~(3) ~~Common~~---------------- ~~Shares~~------------- ~~200,000~~--------------- ~~$100,000~~------------- ~~Business~~---------- ~~Associate~~----------- ~~Dec~~---------- ~~2012~~--------- ~~Common~~---------- ~~Shares 10,000 Consulting Services Business~~-----------

OPTION/SAR GRANTS IN THE LAST FISCAL YEAR In August, 2011, the Board of Directors and the stockholders of Hinto approved the 2011 Hinto Energy, Inc.'s Stock Option Award and Incentive Plan ("the 2011 Plan.") There are 2,000,000 shares of the Company's common stock reserved under the 2011 Plan. During the year ended December 31, 2013 no options were issued under the 2011 Plan. During the year ended December 31, 2014, the Board of Directors authorized the issuance of options exercisable for 1,700,000 shares to officers and directors of the Company. The options have a term of 3 years and an exercise price of $0.50 per share. The options were issued fully vested. -38- CONSULTING AGREEMENTS WITH OFFICERS AND DIRECTORS OF SOUTH UINTAH Messrs. George Harris, Gary Herick, Kevin Blair, J. David Keller and Max Sommer have entered into Consulting Agreements with South Uintah for their services. They do not have any such Agreements with Hinto. Mr. Harris has entered into a Consulting Agreement on June 1, 2011 with South Uintah to provide services to South Uintah as a director and Chief Financial Officer. The Consulting Agreement has a term of 1 year unless terminated with a 30 days notice by either party. The Consulting Agreement provides for Mr. Harris to receive a minimum $5,000 per month beginning April 15, 2011 to perform such services. In July 2011, the amount was increased to $10,000 per month and in May 2013 it was increased to $15,000 per month. In addition, Mr. Harris was issued 300,000 shares of South Uintah common stock and a warrant exercisable for 300,000 shares of South Uintah common stock, which pursuant to the Amended Share Exchange Agreement were exchanged for shares and warrants of Hinto. During the year ended December 31, 2012, the Consulting Agreement's term ran out, the Consulting Agreement has not been terminated and rather runs on a month to month basis. Mr. Herick has entered into a Consulting Agreement on April 15, 2011 with South Uintah to provide services to South Uintah as a director and secretary. The Consulting Agreement has a term of 1 year unless terminated with a 30 days notice by either party. The Consulting Agreement provides for Mr. Herick to receive $10,000 per month beginning July 1, 2011 to perform such services. In addition, Mr. Herick was issued a warrant exercisable for 1,000,000 shares of South Uintah common stock, which pursuant to the Amended Share Exchange Agreement were exchanged for shares and warrants of Hinto. During the year ended December 31, 2012, the Consulting Agreement's term ran out, the Consulting Agreement has not been terminated and rather runs on a month to month basis. Mr. J. David Keller has entered into a Corporate Advisor/Consulting Agreement on August 4, 2011 with South Uintah to provide services as a director and the Vice President Exploration and Development to South Uintah. The Agreement has a term of 1 year unless terminated with a 30 days notice by either party. The Agreement provides for a cash retainer of $5,000 for the month of July 2011 and then $10,000 for each month thereafter. The Agreement provides for Mr. Keller to be issued 300,000 shares of South Uintah common stock and a warrant exercisable for 300,000 shares of South Uintah common stock for such services, which pursuant to the Amended Share Exchange Agreement were exchanged for shares and warrants of Hinto. Mr. Keller became an employee of South Uintah on December 16, 2011, with a monthly base salary of $10,000. In 2012, Mr. Keller took a full time job elsewhere, though he has agreed to consult on an as needed basis with the Company. Mr. Max Sommer entered into a Corporate Advisor/Director Agreement on July 12, 2011 with South Uintah to provide services as a director to South Uintah. The Agreement has a term of 1 year unless terminated with a 30 days notice by either party. The Agreement provides for Mr. Blair to be issued 100,000 shares of South Uintah common stock and a warrant exercisable for 200,000 shares of South Uintah common stock for such services, which pursuant to the Amended Share Exchange Agreement were exchanged for shares and warrants of Hinto. In July 2012, Mr. Sommer started to receive $5,000 per month for his services. During the year ended December 31, 2012, the Consulting Agreement's term ran out, the Consulting Agreement was not terminated and rather ran on a month to month basis. On February 28, 2015, Mr. Sommer resigned as a director and his Consulting Agreement was terminated at that time. All of our officers and/or directors will continue to be active in other companies. All officers and directors have retained the right to conduct their own independent business interests. It is possible that situations may arise in the future where the personal interests of the officers and directors may conflict with our interests. Such conflicts could include determining what portion of their working time will be spent on our business and what portion on other business interest. To the best ability and in the best judgment of our officers and directors, any conflicts of interest between us and the personal interests of our officers and directors will be resolved in a fair manner which will protect our interests. Any transactions between us and entities affiliated with our officers and directors will be on terms which are fair and equitable to us. Our Board of Directors -39- intends to continually review all corporate opportunities to further attempt to safeguard against conflicts of interest between their business interests and our interests. We have no intention of merging with or acquiring an affiliate, associated person or business opportunity from any affiliate or any client of any such person. DIRECTOR COMPENSATION All of the Company's officers and/or directors will continue to be active in other companies. All officers and directors have retained the right to conduct their own independent business interests. The Company does not pay any Directors fees for meeting attendance. The following table sets forth certain information concerning compensation paid to the Company's directors during the year ended December 31, 2014:

~~Associate~~DIRECTORS' ~~Dec~~COMPENSATION ~~2012~~--------------- ~~Common~~----------- ~~Shares~~--------- 50----------- --------------- --------------- ---------------- ---------- Fees Non-equity Non-qualified earned or incentive deferred paid in Stock plan compensation All other cash awards Option compensation earnings compensation Total Name ($) ($) awards ($) ($) ($) ($) ($) --------------- ----------- --------- ----------- --------------- --------------- ---------------- ---------- George $187,500 $ -0- $277,000 ~~Interest~~$ ~~Business~~-0- ~~Associate~~$ ~~Dec~~-0- ~~2012~~$-0- ~~Common~~$464,500 ~~Shares~~Harris (1) --------------- ----------- --------- ----------- --------------- --------------- ---------------- ---------- Gary $179,~~400~~000 $ -0- $ 69,250 $ -0- $ -0- $ -0- $248,250 Herick (1) --------------- ----------- --------- ----------- --------------- --------------- ---------------- ---------- J. David $-0- $ -0- $ 27,000 ~~Litigation~~$ ~~Settlement~~-0- ~~Business~~$ ~~Associate~~-0- ~~Dec~~$ ~~2012~~-0- ~~Warrants~~$27,000 ~~800~~Keller (1) --------------- ----------- --------- ----------- --------------- --------------- ---------------- ---------- Kevin $-0- $ -0- $ 27,000 ~~Litigation~~$ ~~Settlement~~-0- ~~Business~~$ ~~Associate~~-0- ~~Dec~~$ ~~2012~~-0- ~~Subscription~~$27,000 ~~500~~Blair --------------- ----------- --------- ----------- --------------- --------------- ---------------- ---------- Max $ 60,000 $~~250~~ -0- $ -0- $ -0- $ -0- $ -0- $60,000 ~~Business~~Sommer(2) ~~Agreement~~--------------- ~~Associate~~----------- --------- ----------- --------------- --------------- ---------------- ----------

(1) Mr. Harris, Herick, and Keller's compensation discussed in the table above and in this footnote were paid for their services as officers of the Company as discussed in the Executive Compensation table. (2) In December 2014, Mr. Harris, Herick, Keller and Blair were issued options exercisable for shares of the Company's common stock. The options have an exercise price of $0.50 per share, a term of 3 years and are fully vested. The options were valued using the Black-Scholes pricing module. The individuals were issued options with valuations as follows: Name Number of Black-Scholes Options Valuation -------------------------- ----------------- --------------------- George Harris 1,000,000 $ 277,000 Gary Herick 250,000 $69,250 J. David Keller 100,000 $27,000 Kevin Blair 100,000 $27,000 -40- (3) Mr. Sommer receives a monthly fee of $5,000 for providing geological and oil and gas production consulting services to the Company. Mr. Sommer resigned as a director of the Company on February 28, 2015. INDEMNIFICATION OF DIRECTORS AND OFFICERS Hinto's officers and directors are indemnified as provided by the Wyoming Revised Statutes and the bylaws. Under the Wyoming Revised Statutes, director immunity from liability to a company or its shareholders for monetary liabilities applies automatically unless it is specifically limited by a company's Articles of Incorporation. The Company's Articles of Incorporation do not specifically limit the directors' immunity. Excepted from that immunity are: (a) a willful failure to deal fairly with Hinto or its shareholders in connection with a matter in which the director has a material conflict of interest; (b) a violation of criminal law, unless the director had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful; (c) a transaction from which the director derived an improper personal profit; and (d) willful misconduct. The Company's bylaws provide that it will indemnify the directors to the fullest extent not prohibited by Wyoming law; provided, however, that it may modify the extent of such indemnification by individual contracts with the directors and officers; and, provided, further, that the Company shall not be required to indemnify any director or officer in connection with any proceeding, or part thereof, initiated by such person unless such indemnification: (a) is expressly required to be made by law, (b) the proceeding was authorized by the board of directors, (c) is provided by the Company, in sole discretion, pursuant to the powers vested under Wyoming law or (d) is required to be made pursuant to the bylaws. The Company's bylaws provide that it will advance to any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director or officer of the Company, or is or was serving at the request of Hinto as a director or executive officer of another company, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request therefore, all expenses incurred by any director or officer in connection with such proceeding upon receipt of an undertaking by or on behalf of such person to repay said amounts if it should be determined ultimately that such person is not entitled to be indemnified under the bylaws or otherwise. The Company's bylaws provide that no advance shall be made by HInto to an officer except by reason of the fact that such officer is or was the Company's director in which event this paragraph shall not apply, in any action, suit or proceeding, whether civil, criminal, administrative or investigative, if a determination is reasonably and promptly made: (a) by the board of directors by a majority vote of a quorum consisting of directors who were not parties to the proceeding, or (b) if such quorum is not obtainable, or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, that the facts known to the decision-making party at the time such determination is made demonstrate clearly and convincingly that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of Hinto. EQUITY COMPENSATION PLAN INFORMATION In August 2011, the Board of Directors and the stockholders of Hinto approved the 2011 Hinto Energy, Inc.'s Stock Option Award and Incentive Plan ("the 2011 Plan.") There are 2,000,000 shares of the Company's common stock reserved under the 2011 Plan. During the years ended December 31, 2013 and no options were issued under the 2011 Plan. Any options issued under the 2011 Plan are done at the determination of and the approval of the Board of Directors. During the year ended December 31, 2014, the Board of Directors authorized the issuance of options exercisable for 1,700,000 shares to officers and directors of the Company. The options have a term of 3 years and an exercise price of $0.50 per share. The options were issued fully vested. -41- ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. -------------------------------------------------------------------------------- The following table sets forth information with respect to the beneficial ownership of Hinto's outstanding common stock by: o each person who is known by Hinto to be the beneficial owner of five percent (5%) or more of Hinto common stock; o Hinto chief financial officer, its other executive officers, and each director as identified in the "Management -- Executive Compensation" section; and o all of the Company's directors and executive officers as a group. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock and options, warrants and convertible securities that are currently exercisable or convertible within 60 days of the date of this document into shares of the Company's common stock are deemed to be outstanding and to be beneficially owned by the person holding the options, warrants or convertible securities for the purpose of computing the percentage ownership of the person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. The information below is based on the number of shares of Hinto`s common stock that we believe was beneficially owned by each person or entity as of December 31, 2014. AMOUNT AND NATURE OF PERCENT OF BENEFICIAL COMMON STOCK OWNER ISSUED AND NAME AND ADDRESS OF BENEFICIAL OWNER * COMMON STOCK* OUTSTANDING (1) ----------------------------------------------- --------------- ---------------- George Harris, Chief Executive Officer, 537,500 2.45% Chief Financial Officer and Director (2) Gary Herick, VP of Finance& Director (3) 1,210,000 5.53% J. David Keller, VP of Exploration & 525,000 2.40% Development & Director (4) Kevin Blair, Director (5) 325,000 1.48% Max Sommer, Former Director (6) 96,099 0.43% Bridge Industries, LLC (7) 1,400,000 6.40% Malcolm Gray (8) 3,340,000 15.27% Michael A. Littman (9) 1,171,618 5.35% ----------------------------------------------- --------------- ---------------- All Directors and Executive Officers as 2,597,500 11.88% a Group (5 persons) --------------- ---------------- *The Address for the above individuals and entities is c/o 5350 S. Roslyn Street, Suite 400, Greenwood Village, Colorado 80111. -42- (1) Based upon 21,859,995 shares of issued and outstanding common stock at December 31, 2014. (2) Mr. Harris holds an option exercisable for 1,000,000 shares of the Company's common stock. The option has an exercise price of $0.50 per share, a term of 3 years and is fully vested. (3) Mr. Herick has direct ownership of 50,000 shares and indirect ownership of 1,160,000 shares of common stock. Arrowhead Consulting, LLC, which Mr. Herick has voting control of holds 660,000 shares of common stock and an option exercisable for 250,000 shares of the Company's common stock. The option has an exercise price of $0.50 per share, a term of 3 years and is fully vested. Mr. Herick has beneficial ownership of 500,000 shares of common stock through his wife's ownership of Whitemoon Energy, LLC which holds the shares. (4) Mr. Keller holds 525,000 shares of common stock and an option to purchase an additional 100,000 shares of common stock. The option has an exercise price of $0.50 per share, a term of 3 years and is fully vested. (5) Mr. Blair holds 325,000 shares of common stock and warrants to purchase an additional 100,000 shares of common stock. The option has an exercise price of $0.50 per share, a term of 3 years and is fully vested. (6) Mr. Sommer holds 200,000 shares of common stock. On February 28, 2015, Mr. Sommer resigned as a director of the Company. (7) Bridge Industries, LLC holds 1,400,000 shares of common stock and warrants exercisable into 800,000 shares of common stock. The warrants have exercise prices of 200,000 shares at $0.25 per share, 200,000 shares at $0.50 per share, 200,000 shares at $1.00 per share and 200,000 shares at $1.25 per share. The warrants have a term of 5 years. (8) Mr. Gray owns 1,840,000 shares directly and 1,500,000 shares indirectly through TaraSales, Inc. (9) Mr. Littman holds 221,618 shares of common stock directly and 250,000 shares of common stock indirectly through his wife. Mr. Littman has the ability to vote the 700,000 shares held by the M.A. Littman Pension Plan. Rule 13d-3 under the Securities Exchange Act of 1934 governs the determination of beneficial ownership of securities. That rule provides that a beneficial owner of a security includes any person who directly or indirectly has or shares voting power and/or investment power with respect to such security. Rule 13d-3 also provides that a beneficial owner of a security includes any person who has the right to acquire beneficial ownership of such security within sixty days, including through the exercise of any option, warrant or conversion of a security. Any securities not outstanding which are subject to such options, warrants or conversion privileges are deemed to be outstanding for the purpose of computing the percentage of outstanding securities of the class owned by such person. Those securities are not deemed to be outstanding for the purpose of computing the percentage of the class owned by any other person. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ------------------------------------------------------- Other than the stock transactions discussed below, the Company has not entered into any transaction nor is there any proposed transactions in which any of the founders, directors, executive officers, shareholders or any members of the immediate family of any of the foregoing had or is to have a direct or indirect material interest. CONSULTING AGREEMENTS WITH OFFICERS AND DIRECTORS Messrs. George Harris, Gary Herick, Kevin Blair, David Keller and Max Sommer have entered into Consulting Agreements with South Uintah for their services. Mr. Herick has entered into a Consulting Agreement on April 15, 2011 with South Uintah to provide services to South Uintah as a director and secretary. The Consulting Agreement has a term of 1 year unless terminated with a 30 days notice by either party. The Consulting Agreement provides for Mr. Herick to receive $10,000 per month beginning April 15, 2011 to perform such services. In addition, Mr. Herick was issued a warrant exercisable for 1,000,000 shares of South Uintah common stock, which pursuant to the Amended Share Exchange Agreement were exchanged for shares and warrants of Hinto. During the year ended -43- December 31, 2012, the Consulting Agreement's term ran out, the Consulting Agreement has not been terminated and rather runs on a month to month basis. Mr. Harris has entered into a Consulting Agreement on June 1, 2011 with South Uintah to provide services to South Uintah as a director and Chief Financial Officer. The Consulting Agreement has a term of 1 year unless terminated with a 30 days notice by either party. The Consulting Agreement provides for Mr. Harris to receive a minimum $5,000 per month beginning July 1, 2011 to perform such services. In July 2011, the amount was increased to $10,000 per month and in May 2013 it was increased to $15,000 per month. In addition, Mr. Harris was issued 300,000 shares of South Uintah common stock and a warrant exercisable for 300,000 shares of South Uintah common stock, which pursuant to the Amended Share Exchange Agreement were exchanged for shares and warrants of Hinto. During the year ended December 31, 2012, the Consulting Agreement's term ran out, the Consulting Agreement has not been terminated and rather runs on a month to month basis. Mr. Kevin Blair has entered into a Corporate Advisor/Director Agreement on July 12, 2011 with South Uintah to provide services as a director to South Uintah. The Agreement has a term of 1 year unless terminated with a 30 days notice by either party. The Agreement provides for Mr. Blair to be issued 100,000 shares of South Uintah common stock and a warrant exercisable for 100,000 shares of South Uintah common stock for such services, which pursuant to the Amended Share Exchange Agreement were exchanged for shares and warrants of Hinto. During the year ended December 31, 2012, the Consulting Agreement's term ran out, the Consulting Agreement has not been terminated and rather runs on a month to month basis. Mr. Max Sommer entered into a Corporate Advisor/Director Agreement on July 12, 2011 with South Uintah to provide services as a director to South Uintah. The Agreement had a term of 1 year unless terminated with a 30 days notice by either party. The Agreement provides for Mr. Sommer to be issued 100,000 shares of South Uintah common stock and a warrant exercisable for 200,000 shares of South Uintah common stock for such services, which pursuant to the Amended Share Exchange Agreement were exchanged for shares and warrants of Hinto. In July 2012, Mr. Sommer started to receive $5,000 per month for his services. During the year ended December 31, 2012, the Consulting Agreement's term ran out, the Consulting Agreement was terminated and rather ran on a month to month basis. On February 28, 2015, Mr. Sommer resigned as a director of the Company. EQUITY ISSUANCES TO OFFICERS AND DIRECTORS In December 2014, Mr. Harris, Herick, Keller and Blair were issued options exercisable for shares of the Company's common stock. The options have an exercise price of $0.50 per share, a term of 3 years and are fully vested. The options were valued using the Black-Scholes pricing module. The individuals were issued options with valuations as follows: Name Number of Black-Scholes Options Valuation -------------------------- ----------------- --------------------- George Harris 1,000,000 $277,000 Gary Herick 250,000 $69,250 J. David Keller 100,000 $27,000 Kevin Blair 100,000 $27,000 DIRECTOR INDEPENDENCE Our board of directors undertook its annual review of the independence of the directors and considered whether any director had a material relationship with us or our management that could compromise his ability to exercise independent judgment in carrying out his responsibilities. As a result of this review, the board of directors affirmatively determined that Mr. Blair is "independent" as such term is used under the rules and regulations of the Securities and Exchange Commission. Messrs. Harris, Herick and David Keller as Officers of the Company and Mr. Sommer as a paid consultant, are not considered to be "independent." -44- ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES ----------------------------------------------- GENERAL. BF Borger's CPA LLC ("Borgers") is the Company's principal auditing accountant firm. The Company's Board of Directors has considered whether the provisions of audit services are compatible with maintaining their independence. The following table represents aggregate fees billed to the Company for the years ended December 31, 2014 and 2013. Year Ended December 31, 2014 2013 ------------------------- ------------------------ Audit Fees $30,138 $25,380 Audit-related Fees $0 $0 Tax Fees $0 $0 All Other Fees $0 $0 ------------------------- ------------------------ Total Fees $30,138 $25,380 All audit work was performed by the auditors' full time employees. -45- PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES ------------------------------------------------- The following is a complete list of exhibits filed as part of this Form 10K. Exhibit number corresponds to the numbers in the Exhibit table of Item 601 of Regulation S-K.

~~Name Age Position Term~~ --------------- --------- -------- --------------------------------------------------- -------------- --- NUMBER DESCRIPTION 3.1 Articles of Incorporation of Hinto Energy, Inc. (1) 3.2 Bylaws of Hinto Energy, Inc. (1) 3.3 Amendment to Articles of Incorporation of Hinto Energy, Inc. (7) 3.4 Articles of Incorporation of South Uintah Gas Properties, Inc. (8) 3.5 Amendment to Articles of Incorporation of South Uintah Gas (8) Properties, Inc. 3.6 Bylaws of South Uintah Gas Properties, Inc. (8) 4.1 Form of Vesting Warrants (8) 4.2 Form of $0.50 Warrants (8) 4.3 2011 Stock Option Plan Filed Herewith 10.1 Farmout Agreement (2) 10.2 Extension to Farmout Agreement (2) 10.3 Extension to Farmout Agreement - 2009 (3) 10.4 Extension to Farmout Agreement -~~------~~ 2010 (4) 10.5 Share Purchase Agreement (5) 10.6 Share Acquisition and Exchange Agreement (6) 10.7 Amended Share Exchange and Acquisition Agreement, dated (8) January 23, 2012 10.8 Asset Purchase & Sales Agreement, dated May 9, 2012 (9) 10.9 Consulting Agreement with George Harris, 63dated June 1, 2011 (10) 10.10 Corporate Advisor Director Consulting Engagement Agreement with (11) Gary Herick, dated April 15, 2011 10.11 Consulting Agreement with Kevin Blair, dated June 1, 2011 (11) 10.12 Consulting Agreement with David Keller, dated August 4, 2011 (11) 10.13 Consulting Agreement with Max Sommer, dated June 1, 2011 (11) 23.1 Consent of Geologist Filed Herewith 31.1 Certification of Chief Financial Officer & Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act Filed Herewith 32.1 Certification of Chief Financial Officer ~~Annual~~& ~~and~~Principal ~~Director~~Executive ~~Gary~~Officer ~~Herick~~pursuant 47to ~~Vice~~Section ~~President~~906 of ~~Finance~~the Sarbanes-Oxley Act Filed Herewith 99.1 Reserve Report, ~~Secretary~~dated ~~and~~April ~~Director~~7, ~~Annual~~2015 JFiled Herewith 101.INS ~~David~~XBRL ~~Keller~~Instance 58Document ~~Vice~~Filed ~~President~~Herewith(12) of101.SCH ~~Exploration~~XBRL ~~and~~Taxonomy ~~Development~~Extension ~~and~~Schema ~~Director~~Document ~~Annual~~Filed ~~Max~~Herewith(12) ~~Sommer~~101.CAL 81XBRL ~~Director~~Taxonomy ~~Annual~~Extension ~~Kevin~~Calculation ~~Blair~~Linkbase 41Document ~~Director~~Filed ~~Annual~~Herewith(12) 101.DEF XBRL Taxonomy Extension Definition Linkbase Document Filed Herewith(12) 101.LAB XBRL Taxonomy Extension Label Linkbase Document Filed Herewith(12) 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document Filed Herewith(12) --------------- ---------------------------------------------------------------------- ---------------------

(1)Incorporated by reference from the exhibits included in the Company's SB-2 Registration Statement filed with the Securities and Exchange Commission (www.sec.gov), dated November 13, 2007. (2)Incorporated by reference from the exhibits included in the Company's second Amended Registration Statement filed on Form S-1/A with the Securities and Exchange Commission (www.sec.gov), dated April 23, 2008. -46- (3)Incorporated by reference from the exhibits included in the Company's fifth Amended Registration Statement filed on Form S-1/A with the Securities and Exchange Commission (www.sec.gov), dated December 2, 2009. (4)Incorporated by reference from the exhibits included in the Company's sixth Amended Registration Statement filed on Form S-1/A with the Securities and Exchange Commission (www.sec.gov), dated April 27, 2011. (5)Incorporated by reference from the exhibits included in the Company's Form 8K filed with the Securities and Exchange Commission (www.sec.gov), dated July 12, 2011. (6)Incorporated by reference from the exhibits included in the Company's Form 8K filed with the Securities and Exchange Commission (www.sec.gov), dated August 5, 2011. (7)Incorporated by reference from the exhibits included in the Company's Form 8K filed with the Securities and Exchange Commission (www.sec.gov), dated August 17, 2011. (8)Incorporated by reference from the exhibits included in the Company's Form 8K filed with the Securities and Exchange Commission (WWW.SEC.GOV), dated January 23, 2012. (9)Incorporated by reference from the exhibits included in the Company's Form 8K filed with the Securities and Exchange Commission (www.sec.gov), dated June 1, 2012. (10)Incorporated by reference from the Company's Registration Statement No. 333-182538 on Form S-1 filed with the Securities and Exchange Commission (www.sec.gov), dated July 3, 2012. (11)Incorporated by reference from the Company's Amended Annual Report on Form 10-K/A filed with the Securities and Exchange Commission (www.sec.gov), dated October 28, 2014. (12)Pursuant to Rule 406T of Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections. -47- HINTO ENERGY, INC. CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 -48- REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Hinto Energy, Inc.: We have audited the accompanying balance sheets of Hinto Energy, Inc. ("the Company") as of December 31, 2014 and 2013, and the related statement of operations, stockholders' equity (deficit) and cash flow for the years ended December 31, 2014 and 2013. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Hinto Energy, Inc., as of December 31, 2014 and 2013 and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles in the United States of America. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the Company's internal control over financial reporting. Accordingly, we express no such opinion. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company's significant operating losses raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ B F Borgers CPA PC B F Borgers CPA PC Denver, CO April 15, 2015 -49-

~~SUMMARY~~HINTO ~~EXECUTIVES~~ENERGY, ~~COMPENSATION~~INC. ~~TABLE~~CONSOLIDATED ~~Non~~BALANCE SHEETS December 31, December 31, 2014 2013 -~~equity~~-------------- ~~Non~~-~~qualified~~-------------- ~~incentive~~Assets ~~deferred~~Current ~~All~~Assets: ~~Stock~~Cash ~~Option~~$ ~~plan~~356,506 ~~compensation~~$ ~~other~~97,716 ~~Salary~~Accounts ~~Bonus~~Receivable ~~awards~~30,249 ~~awards~~29,886 ~~compen-~~Deposits ~~earnings~~17,963 ~~compensation~~2,013 --------------- --------------- Total ~~sation~~Current ~~Name~~Assets &404,718 ~~Position~~129,615 ~~Year~~--------------- ~~($)~~--------------- ~~($)~~Property ~~($)~~and ~~($)~~Equipment: ~~($)~~Machinery, ~~($)~~net (of accumulated depreciation of $)28,471 (and $)7,754, respectively 164,274 51,313 Development of Technological Process 258,223 74,445 --------------- -------- ------- Total Property and Equipment 422,497 125,758 Oil and Natural Gas Properties: Proved Properties 1,224,255 1,004,300 Unproved Properties - - Other Property and Equipment 1,090,601 437,109 Less Accumulated Depreciation and Depletion (165,544) (58,624) ------- -------- -------- ------- Total Oil and Natural Gas Properties 2,149,312 1,382,785 --------------- --------------- Other Assets: Deposits 162,500 135,500 --------------- --------------- ~~George~~Total ~~Harris,~~Assets ~~CEO~~$ ~~2012~~3,139,027 ~~127~~$ 1,~~000~~773,658 0=============== 0=============== 0Liabilities 0and 0Stockholders' 0(Deficit) ~~127,000~~Equity &Current ~~CFO~~liabilities ~~(1)~~Accounts ~~2011~~payable 60$ 389,~~000~~682 0 $55 0127,602 0Accrued 0liabilities 0169,629 6044,~~055~~136 ~~Gary~~Subscriptions ~~Herick~~received - 425,000 VPNotes ofpayable, ~~2012~~other ~~140~~- 115,000 0--------------- 0--------------- 0Total 0Current 0Liabilities 0559,311 ~~140~~711,~~000~~738 ~~Finance~~Asset &recovery ~~Secretary~~obligations ~~2011~~168,714 85110,759 Long term note payable 2,975,000 0575,000 ~~$200~~--------------- 0--------------- 0Total 0liabilities 0$ 853,~~200~~703,025 $ 1,397,497 --------------- --------------- Stockholders' (2Deficit) JEquity Preferred stock, $0.001 ~~David~~par ~~Keller~~value; 25,000,000 VPshares ~~2012~~authorized, 77no shares issued and outstanding - - Common stock,~~613~~ $0.001 0par 0value; 050,000,000 0shares 0authorized, 7721,~~613~~859,994 ~~Exploration~~and &20,151,769 ~~2011~~shares 55issued and outstanding at December 31,~~000~~ 02014 ~~$52~~and 02013, 0respectively 021,860 020,152 55Additional paid-in capital 5,~~052~~635,616 ~~Development~~4,292,143 Subscription receivable - (330,000) ~~Roy~~Common C.stock, ~~Smith~~subscribed - 30,000 ~~2011~~Accumulated 0deficit 0(6,221,474) 0(3,936,134) 0--------------- 0--------------- 0Total 0Stockholders' 0(Deficit) ~~President~~Equity (4563,998) ~~2010~~376,161 0--------------- 0--------------- 0Total 0liabilities 0and 0stockholders' 0equity 0$ 3,139,027 $ 1,773,658 =============== ===============

See the notes to these consolidated financial statements. -50-

~~Option~~HINTO ~~Awards~~ENERGY, ~~Stock~~INC. ~~awards~~CONSOLIDATED ~~----------------~~STATEMENTS ~~------------~~OF ~~-------------~~OPERATIONS ~~-------------~~FOR ~~---------~~THE ~~----------~~YEARS ENDED DECEMBER 31, 2014 and 2013 2014 2013 -------- --------- ---------- -------~~---~~ ~~Equity incentive Equity plan incentive awards~~Revenue: ~~Market~~$ ~~plan~~475,630 ~~Market~~$ ~~Number~~65,615 ~~value~~Direct ~~awards:~~Cost ~~or Equity~~ of ofRevenue ~~Number~~389,556 ~~payout~~316,888 ~~incentive~~Depreciation ~~shares~~and ~~shares~~depletion ~~of value of plan or of unearned unearned awards: units units shares~~105,897 ~~shares~~72,978 Number of Number of of of units or units or securities Number of securities stock stock other others underlying securities underlying that that rights rights unexercised underlying unexercised Option have have that that options unexercised unearned exercise Option not not have not have not (#) options (#) options price expiration vested vested vested vested Name exercisable unexercisable (#) ($) date (#) ($) (#) ($) ---------------- -~~-----------~~ ------------- ----~~---------~~ ~~---------~~(19,823) ~~----------~~(324,251) ~~--------~~Operational ~~---------~~expenses: ~~----------~~Operating ~~----------~~Lease ~~----------------~~expense ~~------------~~596,885 General and Administrative expense 520,620 582,997 Consulting fees 949,320 349,767 ------------- ----~~---------~~ --------- ---------- Total operational expenses 2,066,825 932,764 -------- --------- ---------- -------~~---~~ ~~George~~Other 0Income 0(Expenses) 0Gain 0on 0write 0off 0of 0accrued 0debt ~~Harris~~50,000 ~~(1)~~11,250 ~~----------------~~Interest ~~------------~~income ~~-------------~~2,766 -~~------------~~ ~~---------~~Litigation ~~----------~~Settlement ~~--------~~Expense -~~--------~~ ~~----------~~(570) ~~----------~~Finance ~~----------------~~Expense -~~-----------~~ ~~-------------~~(17,815) ~~-------------~~Interest ~~---------~~expense ~~----------~~(251,458) (68,162) -------- --------- ---------- -------~~---~~ ~~Gary~~Total ~~Herick,~~other 0income 0(expense) ~~0 0 0 666~~(198,~~667~~692) ~~200,000 0 0 VP of Finance~~ (275,297) ---------------- -~~-----------~~ ------------- ----~~---------~~ ~~---------~~Net ~~----------~~loss ~~--------~~$ ~~---------~~(2,285,340) ~~----------~~$ ~~----------~~(1,332,312) ~~----------------~~================= ~~------------~~================= ~~-------------~~Per ~~-------------~~share ~~---------~~information ~~----------~~Net ~~--------~~loss ~~---------~~per ~~----------~~common ~~----------~~share J.Basic ~~David~~$ (0.10) 0$ (0.07) 0Fully 0diluted 0* 0* 0================= 0================= ~~Keller,~~Weighted VPaverage number of ~~Exploration~~common &stock ~~Develop.~~outstanding ~~(3)~~21,268,455 ~~----------------~~18,581,806 ~~------------~~================= ~~-------------~~================= ~~-------------~~* ~~---------~~Not ~~----------~~provided ~~--------~~as ~~---------~~it ~~----------~~is anti-~~---------~~dilutive

See the notes to these consolidated financial statements. -51-

~~DIRECTORS~~HINTO ENERGY, INC. CONSOLIDATED STATEMENT OF STOCKHOLDER'S ~~COMPENSATION~~(DEFICIT) ~~---------------~~EQUITY ~~-----------~~FOR ~~----------~~THE ~~----------~~YEARS ~~---------------~~ENDED ~~---------------~~DECEMBER 31, 2014 and 2013 Common Stock Common ---------------- ---------- ~~Fees~~Stock ~~Non-equity~~Additional ~~Non-qualified~~Total ~~earned~~Number orSubscription ~~incentive~~Subscribed ~~deferred~~ paid -in ~~Stock~~Accumulated ~~Option~~Stockholders' ~~plan~~of ~~compensation~~Shares ~~All~~Amount ~~other~~Receivable ~~cash~~For ~~awards~~Capital ~~awards~~Deficit ~~compensation~~Equity ~~earnings compensation Total Name ($) ($) ($) ($) ($) ($) ($)~~ ------------~~---~~ ----------- ---------- -~~---------~~ ----------~~-----~~ ------------~~---~~ -------------~~---~~ ---------- ---~~------------~~ ~~-----------~~Balance -~~---------~~ ~~----------~~January ~~---------------~~1, ~~---------------~~2013 ~~----------------~~16,236,527 ~~---------- George~~ $~~127~~ 16,~~000~~237 $ -0- $ -0- $ ~~-0-~~2,315,515 $ ~~-0-~~(2,603,822) $~~-0-~~ ~~$127~~(272,~~000~~070) ~~Harris~~Issuance (of Shares for cash 1),663,000 1,663 - -~~-------------~~ 829,843 -~~----------~~ 831,506 Issuance of shares for warrant exercise 2,000,000 2,000 -~~---------~~ -~~---------~~ 998,000 -~~--------------~~ 1,000,000 Issuance of shares for services 60,000 60 -~~--------------~~ -~~---------------~~ 29,940 -~~---------~~ 30,000 Issuance of shares for interest 80,000 80 -~~--------------~~ -~~----------~~ 40,043 -~~---------~~ 40,123 Issuance of shares for leases 112,242 112 -~~---------~~ -~~--------------~~ 60,987 -~~--------------~~ 61,099 Common stock subscribed for -~~---------------~~ -~~---------~~ ~~Gary~~(30,000) ~~$140~~30,000 $- -0 - $Issuance of Warrant with convertible note -0 - $- -0 17,815 - $17,815 Net Loss -0 - $- -0 - ~~$140~~(1,~~000~~332,312) ~~Herick~~ (1,332,312) ------------~~---~~ ----------- ----------- ---------- ------------~~---~~ --------------- -------------~~---~~ Balance -~~---------~~ December 31, 2013 20,151,769 20,152 (30,000) 30,000 4,292,143 (3,936,134) 376,161 ------------~~---~~ ----------- ----------- ---------- ------------~~---~~ --------------- -------------~~---~~ ~~----------~~Issuance J.of ~~David~~Shares ~~$77~~for cash 910,~~613~~000 $910 -0 - $454,090 -0- $455,000 ~~-0-~~Issuance $of shares for services 250,000 250 -0 - $124,750 -0- ~~$77~~125,~~613~~000 ~~Keller~~Issuance ~~(1)~~of ~~---------------~~shares ~~-----------~~for ~~----------~~interest ~~----------~~458,225 ~~---------------~~458 -~~--------------~~ -~~---------------~~ ~~----------~~208,023 -~~--------------~~ ~~-----------~~208,481 ~~----------~~Common ~~----------~~stock ~~---------------~~subscribed ~~---------------~~for -~~---------------~~ -~~---------~~ ~~Kevin~~30,000 $2(30,000) $- -0 - $Common ~~-0-~~stock $issued ~~-0-~~in $exchange for bond cash 120,000 120 -0 - $59,880 -0- $260,~~032~~000 ~~Blair~~Common stock canceled (130,000) (30) 30 - Warrant issued for services - - - - 25,800 - 25,800 Management's options issued - - -~~------~~ -~~----------~~ 470,900 -~~---------~~ 470,900 Net Loss -~~---------~~ -~~--------------~~ -~~--------------~~ -~~---------------~~ -~~---------~~ (2,285,340) (2,285,340) ------------~~---~~ ----------- ----------- ---------- ------------~~---~~ --------------- -------------~~---~~ Balance -~~---------~~ ~~Max~~December ~~$27~~31,~~500~~ $2014 ~~-0-~~21,859,994 $ ~~-0-~~21,860 $ -0- $ -0- $ ~~-0-~~5,635,616 $~~27,500~~ ~~Sommer~~(16,221,474) ~~---------------~~$ ~~-----------~~(563,998) ~~----------~~============ ~~----------~~========== ~~---------------~~=========== ~~---------------~~========== ~~----------------~~============ ~~----------~~============= =============

See the notes to these consolidated financial statements. -52-

~~Amount~~HINTO ~~and~~ENERGY, ~~Amount~~INC. ~~and~~CONSOLIDATED ~~Nature~~STATEMENT ofOF ~~Nature~~CASH ofFLOWS ~~Total~~FOR ~~Number~~THE ~~Percent~~YEARS ofENDED ~~Beneficial~~DECEMBER ~~Beneficial~~31, of2014 ~~Shares Common Stock Owner Owner Vested Beneficially Issued~~ and ~~Name~~2013 ~~and~~2014 ~~Address~~2013 ~~of Beneficial Owner * Common Stock* Warrants Held Outstanding (1)~~ ------------------------------------------- Cash Flows from Operating Activities: Net Loss $ (2,285,340) $ (1,332,312) Adjustments to net loss for non-cash items: Accrued interest converted to stock 208,481 40,123 Stock issued for services 125,000 30,000 Options issued to management 470,900 - Finance cost of warrant issuance - 17,815 Amortization, Depreciation and Depletion 133,238 42,144 Asset remediation expenses - 38,637 Gain on discount of promissory note (50,000) - Adjustments to reconcile net loss to net cash used in operating activities: (Increase) in accounts receivable (363) (29,886) (Increase) in deposits and advances (15,950) (141,991) Increase in accounts payable 262,079 98,632 Increase (decrease) in accrued liabilities 124,294 (34,089) --------------------- ------------------ Net Cash Used by Operating Activities (1,027,661) (1,270,927) --------------------- ------------------ ~~George~~Cash ~~Harris,~~Flows ~~Chief~~from ~~Executive~~Investing ~~Officer,~~Activities ~~550~~Purchase of leases (302,000) ~~550~~(140,000) 1New well development (5,~~100,000~~600) ~~3.38%~~- ~~Chief~~Purchase ~~Financial~~of ~~Officer~~machinery and ~~Director~~equipment (3133,678) ~~Gary Herick~~(42,567) VPDevelopment of ~~Finance,~~technological ~~1,500,000~~process ~~333~~(183,~~333~~778) 1(74,~~833,333~~445) ~~9.23%~~Well ~~Secretary~~rework &(513,492) ~~Director~~ (4223,554) J.--------------------- ~~David~~------------------ ~~Keller,~~Net VPCash ofUsed ~~Exploration~~in &Investing ~~525,000~~Activities ~~525,000~~ (1,~~050~~138,~~000~~548) ~~3.23%~~(480,566) ~~Development~~--------------------- &------------------ ~~Director~~Cash ~~(5)~~Flows ~~Kevin~~from ~~Blair,~~Financing ~~Director~~Activities: ~~(6)~~Proceeds ~~325,000~~from ~~325~~convertible promissory notes 2,400,000 ~~650~~75,000 ~~2.00%~~Payments ~~Max~~on ~~Sommer,~~other ~~Director~~notes payable (765,000) ~~200~~(290,000) ~~200~~Proceeds from sale of common stock 90,000 ~~400~~581,~~000~~500 ~~1.23%~~Increase ~~Craig~~in ~~Phillips~~stock ~~(8)~~subscriptions ~~900~~payable - 425,000 ~~333,333~~Proceeds ~~1,233,333~~from ~~5.54%~~the ~~Michael~~exercise A.of ~~Littman~~warrants ~~(9)~~- 1,~~761~~000,~~618~~000 ~~333,333 2,094,951 10.84%~~ --------------------- ------------------~~--------~~ Net Cash Provided by Financing Activities 2,425,000 1,791,500 --------------- ------~~----------~~ --------------- ---~~-------------~~ ~~All~~Net ~~Directors~~Increase ~~and~~in ~~Executive~~Cash ~~Officers as 3~~258,~~100,000~~791 140,~~933,333~~007 ~~5,033,333~~Cash ~~19.09%~~and aCash ~~Group~~Equivalents (5- ~~persons)~~Beginning of Period 97,716 57,709 --------------- ------ ---------- -------- Cash and Cash Equivalents - End of Period $ 356,506 $ 97,716 ===================== ================== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for interest expense $ $ - $ - ===================== ================== Cash paid for income taxes $ $ - $ - ===================== ================== SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES: Issuance of common stock for interest $ 208,481 $ 40,123 ===================== ================== Issuance of common stock for leases $ - $ 61,099 ===================== ================== Subscription Receivable $ (90,000) $ 30,000 ===================== ================== Warrant issued for services $ 28,500 $ - ===================== ================== Amortization of Warrant issued for services $ 16,181 $ -~~--------------~~ ===================== ==================

See the notes to these consolidated financial statements. -53- HINTO ENERGY, INC. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2014 and 2013 NOTE 1 - BUSINESS AND BASIS OF PRESENTATION ------------------------------------------- BUSINESS Hinto Energy, Inc. ("the Company") was incorporated in February 13, 1997 in the state of Wyoming. The Company and its wholly-owned subsidiary, South Uintah Gas Properties, Inc. ("South Uintah") are involved in the acquisition and development of oil and gas prospects in the rocky mountain region. The Company has oil and gas leases, wells and new drilling prospects in both Utah and Montana. BASIS OF PRESENTATION The Company's fiscal year end is December 31st. The Company's financial statements are presented on the accrual basis of accounting under GAAP (Generally Accepted Accounting Principles). CONSOLIDATION The accompanying audited consolidated financial statements include the accounts of Hinto Energy, Inc. and its wholly owned subsidiary, South Uintah Gas Properties, Inc. (collectively the "Company"). All intercompany balances and transactions have been eliminated in consolidation. NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES ---------------------------------------- USE OF ESTIMATES The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. CASH AND CASH EQUIVALENTS The Company considers all highly liquid investments with an original maturity of three months or less and money market instruments to be cash equivalents. PROPERTY AND EQUIPMENT Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed principally on the straight-line method over the estimated useful life of each type of asset which ranges from five to seven years. Maintenance and repairs are charged to expense as incurred; improvements and betterments are capitalized. Upon retirement or disposition, the related costs and accumulated depreciation are removed from the accounts, and any resulting gains or losses are credited or charged to income. -54- HINTO ENERGY, INC. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2014 and 2013 Life in December 31, December 31, Asset Type Years 2014 2013 ------------------------------- ------------ ------------------ --------------- Machinery 5 - 7 $ 192,745 $ 59,067 ------------ ------------------ --------------- Subtotal 192,745 59,067 Less Accumulated Depreciation (28,471) (7,754) ------------ ------------------ --------------- Net Book Value $ 164,274 $ 51,313 ============ ================== =============== OIL AND GAS PROPERTIES, FULL COST METHOD The Company uses the full cost method of accounting for oil and gas producing activities. Costs to acquire mineral interests in oil and gas properties, to drill and equip exploratory wells used to find proved reserves, and to drill and equip development wells including directly related overhead costs and related asset retirement costs are capitalized. Under this method, all costs, including internal costs directly related to acquisition, exploration and development activities are capitalized as oil and gas property costs. Properties not subject to amortization consist of exploration and development costs which are evaluated on a property-by-property basis. Amortization of these unproved property costs begins when the properties become proved or their values become impaired. The Company assesses the realization of unproved properties, taken as a whole, if any, on at least an annual basis or when there has been an indication that impairment in value may have occurred. Impairment of unproved properties is assessed based on management's intention with regard to future exploration and development of individually significant properties and the ability of the Company to obtain funds to finance such exploration and development. If the results of an assessment indicate that the properties are impaired, the amount of the impairment is added to the capitalized costs to be amortized. COSTS OF OIL AND GAS PROPERTIES WILL BE AMORTIZED USING THE UNITS OF PRODUCTION METHOD. The Company performs a quarterly "ceiling test" calculation to test its oil and gas properties for possible impairment. The primary components impacting this calculation are commodity prices, reserve quantities added and produced, overall development costs, depletion expense, and tax effects. If the net capitalized cost of the Company's oil and gas properties subject to amortization (the carrying value) exceeds the ceiling limitation, the excess would be charged to expense. The ceiling limitation is equal to the sum of the present value discounted at 10% of estimated future net cash flows from proved reserves, the cost of properties not being amortized, the lower of cost or estimated fair value of unproved properties included in the costs being amortized, and all related tax effects. At December 31, 2014, the calculated value of the ceiling limitation exceeded the carrying value of the Company's oil and gas properties subject to the test, and no impairment was necessary. IMPAIRMENT The Company reviews long-lived assets held for use, principally oil and gas leases, for impairment when events or circumstances indicate that their carrying value may not be recoverable. Impairment exists if the carrying amount of the long-lived asset is not recoverable from the discounted cash flows expected from its use and eventual disposition. We determine the amount of the impairment loss -55- by comparing the carrying value of the long-lived asset to its estimated fair value. In the absence of quoted market prices, we determine estimated fair value generally based on the present value of future probability weighted cash flows expected from the continued use and value at sale of the long-lived asset. REVENUE AND ACCOUNTS RECEIVABLE The Company recognizes revenue for its production when the quantities are delivered to, or collected by, the purchaser. Prices for such production are generally defined in sales contracts and are readily determinable based on certain publicly available indices. All transportation costs are included in lease operating expenses. Accounts receivable -- oil and natural gas sales consist of uncollateralized accrued revenues due under normal trade terms, generally requiring payment within 30 to 60 days of production. The Company reviews accounts receivable periodically and reduces the carrying amount by a valuation allowance that reflects its best estimate of the amount that may not be collectible. No valuation allowance was recognized as of December 31, 2014 and 2013. DEPENDENCE ON MAJOR CUSTOMERS During the fiscal years ended December 31, 2014 and 2013, the Company's revenues were attributable to sales of oil to two customers. The Company believes that there are potential alternative purchasers and that it may be necessary to establish relationships with new purchasers. However, there can be no assurance that the Company can establish such relationships and that those relationships will result in an increased number of purchasers. Although the Company is exposed to a concentration of credit risk, the Company believes that all of its purchasers are credit worthy. The Company had no bad debt for the fiscal years ended December 31, 2014 and 2013. ASSET RETIREMENT OBLIGATIONS Asset retirement obligations ("AROs") associated with the retirement of tangible long-lived assets are recognized as liabilities with an increase to the carrying amounts of the related long-lived assets in the period incurred. The cost of the tangible asset, including the asset retirement cost, is depreciated over the useful life of the asset. AROs are recorded at estimated fair value, measured by reference to the expected future cash outflows required to satisfy the retirement obligations discounted at the Company's credit-adjusted risk-free interest rate. Accretion expense is recognized over time as the discounted liabilities are accreted to their expected settlement value. If estimated future costs of AROs change, an adjustment is recorded to both the ARO and the long-lived asset. Revisions to estimated AROs can result from changes in retirement cost estimates, revisions to estimated inflation rates and changes in the estimated timing of abandonment. NET LOSS PER SHARE Basic net loss per common share is calculated by dividing the net loss applicable to common shares by the weighted average number of common and common equivalent shares outstanding during the period. For the years ended December 31, 2014 and 2013, there were no potential common equivalent shares used in the calculation of weighted average common shares outstanding as the effect would be anti-dilutive because of the net loss. -56- HINTO ENERGY, INC. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2014 and 2013 STOCK-BASED COMPENSATION The Company adopted the provisions of and accounts for stock-based compensation using an estimate of value in accordance with the fair value method. Under the fair value recognition provisions of this statement, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the requisite service period, which generally is the vesting period. The Company elected the modified-prospective method, under which prior periods are not revised for comparative purposes. The valuation method applies to new grants and to grants that were outstanding as of the effective date and are subsequently modified. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company's financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and notes payable are carried at cost, which approximates fair value due to the short-term maturity of these instruments. OTHER COMPREHENSIVE INCOME The Company has no material components of other comprehensive income (loss) and accordingly, net loss is equal to comprehensive loss in all periods. INCOME TAXES Provision for income taxes represents actual or estimated amounts payable on tax return filings each year. Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the accompanying balance sheets, and for operating loss and tax credit carry forwards. The change in deferred tax assets and liabilities for the period measures the deferred tax provision or benefit for the period. Effects of changes in enacted tax laws on deferred tax assets and liabilities are reflected as adjustment to the tax provision or benefit in the period of enactment. RECENT ACCOUNTING PRONOUNCEMENTS In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern: Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. This update requires an entity's management to evaluate for each annual and interim reporting period whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued or available to be issued. The update further requires certain disclosures when substantial doubt is alleviated as a result of consideration of management's plans, and requires an express statement and other disclosures when substantial doubt is not alleviated. This amendment is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and financial statement disclosures. -57- HINTO ENERGY, INC. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2014 and 2013 There were accounting standards and interpretations issued during the year ended December 31, 2014, none of which are expected to have a material impact on the Company's financial position, operations or cash flows. NOTE 3 - GOING CONCERN AND MANAGEMENTS' PLAN -------------------------------------------- The Company's consolidated financial statements for the years ended December 31, 2013 and 2014 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company reported a net loss of $2,285,340 and $1,332,312 for the years ended December 31, 2014 and 2013, respectively, and an accumulated deficit of $6,221,474 as of December 31, 2014. At December 31, 2014, the Company had a working capital deficit of $(154,593). The future success of the Company is dependent on its ability to attract additional capital and ultimately, upon its ability to develop future profitable operations. There can be no assurance that the Company will be successful in obtaining such financing, or that it will attain positive cash flow from operations. Management believes that actions presently being taken to revise the Company's operating and financial requirements provide the opportunity for the Company to continue as a going concern. NOTE 4 - OIL AND GAS LEASES --------------------------- Oil and gas properties consisted of the following as of December 31, 2013 and 2012: December 31, December 31, 2014 2013 ------------------- ------------------ Proved properties $ 1,224,255 $ 1,004,300 Unproved properties - - ------------------- ------------------ $ 1,224,255 $ 1,004,300 Accumulated depletion 32,820 5,942 ------------------- ------------------ $ 1,191,435 $ 998,358 =================== ================== During the years ended December 31, 2014 and 2013, the Company recognized a depletion expense of $32,820 and $5,942, respectively. MUSSELSHELL COUNTY, MONTANA On June 14, 2013, the Company and Jake Oil, LLC ("Jake") entered into a Purchase and Sale Agreement, whereby, the Company acquired all right and title to oil and gas leases for a total of 559 gross acres in the Unit for the 1st Cat Creek formation in Musselshell County, Montana. In exchange for such oil and gas leases, the Company paid $25,000 in cash and a 5% carried working interest. The property includes 6 wells in a field being water flooded, with 4 oil wells placed on production, a water source well and an injection well. Additional drilling may be performed to maximize the oil recovery from the formation. -58- HINTO ENERGY, INC. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2014 and 2013 In addition, the Company and S&L Energy, Inc. ("S&L") entered into a Purchase and Sale Agreement, whereby the Company acquired all right and title to oil and gas leases for a total of 722 gross acres in the Musselshell County, Montana. The property includes 120 acres for all zones other than the 1st Cat Creek. The 1st Cat Creek formation on the 120 acres was previously acquired from Jake Oil LLC. In exchange for such oil and gas leases, the Company paid $101,100 in a combination of cash and stock, as follows: $65,000 in cash; and $36,100 payable in restricted common stock valued at $0.58 per share (2/3 of the June 4, 2013 closing price of $0.87) for a total of 62,242 shares. The properties are located in the Mason Lake field in Central Montana in the Amsden (Alaska Bench) Formation which is late Mississippian to Early Pennsylvanian in age. The Amsden formation is a combination of sandstone, shale and limestone, which was deposited under marine conditions in the Paleozoic Era. The Amsden Formation overlays the Tensleep Formation and is above the Heath Formation, traditionally known as the Pennsylvanian Tyler Sand Play area. The 1st Cat Creek is at a depth of approximately 4,200 feet and is above the Amsden formation. During the six months ended December 31, 2013, the Company spent $116,447 for development costs in connection with the re-working of this field. RAGGED POINT, MONTANA On August 13, 2014, the Company and Ragged Point Partners, LLC, entered into a Purchase and Sale Agreement, in which the Company acquired all right and title to oil and gas leases for a total of 640 gross acres in the Ragged Point Oil Field in Musselshell County, Montana. In exchange for the leases, Company paid $150,000 in cash and has a100% working interest. The leases consist of 8 oil wells and 1 water supply well. The Company has begun the early analysis of the field and wells and is developing a re-work plan for the wells. The Company has initially placed 2 wells on production. CISCO, UTAH On May 9, 2012, the Company and Pacific Energy and Mining Company ("Pacific") entered into an Asset Purchase and Sale Agreement ("The Pacific Agreement"). On May 30, 2012, the Company closed the transaction. As part of the Pacific Agreement, the Company acquired certain oil and gas wells and related assets in the Greater Cisco area of the Uintah Basin in Grand County, Utah. The assets acquired include 4,783 gross acres in the Cisco Fields with an 80% Net Revenue Interest (NRI) and approximately 3,827 net acres. The property includes 27 wells that need to be re-worked, connected to a gas pipeline, or offset drilled. In exchange for such oil and gas wells and related assets, the Company paid $325,000 in a combination of cash and a convertible promissory note, as follows: $175,000 cash; and a $150,000 convertible promissory note. The convertible promissory note had an interest rate of 8% and was paid in full on May 20, 2013. -59- HINTO ENERGY, INC. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2014 and 2013 During the year ended December 31, 2013, the Company expended $100,243 in connection with the re-work of the wells on this property. On June 4, 2013, the Company and Pride Ventures, LLC and James Woolsey entered into a Purchase and Sale Agreement, whereby, the Company acquired all right and title to certain mineral estates in Grand County, Utah. The transaction had a closing date of June 17, 2013. The mineral estates include 4,435 acres, 9 well bores and space to drill additional wells. In addition, the Company acquired Pride's natural gas gathering system, which interconnects with the Company's existing gathering system, thereby reducing new pipe gathering system construction by several miles. The Company has acquired 100% of the working interests in the estates. In exchange for such mineral estates, the Company paid a total of $100,000 in a combination of cash and stock, as follows: (a) $75,000 in cash; and $25,000 in the form of 50,000 shares of the Company's restricted common stock. The properties are located in Grand County, Utah in the Greater Cisco area of the Uintah Basin and are located in the vicinity of the Company's existing properties in the Greater Cisco area. During the year ended December 31, 2013, the Company spent $6,863 development costs in connection with the re-working of this field. NATURAL BUTTES The Company purchased a farmout of deep right interests in approximately 5,366 gross and 4,887 net acres in the central part of the Uintah Basin at Natural Buttes in Utah during July 2011 such purchase agreement was amended in December 2011. The final purchase price of the farmout interest was $478,200, made up of $303,000 in cash, $175,000 in notes payable and $200 in common stock (2,000,000 shares.) The upper zones above approximately 9,800 feet are precluded in the farmout and the overall targets will be zones from 9,800 feet to 16,000 feet. During the year ended December 31, 2013, the Company did not expend any development costs in connection with the re-working of this well. The Company has not abandoned the well, rather management refocused it re-work efforts on those properties that are oil producing and closer to revenue production. The well is connected to a pipeline and produces gas, thereby holding the lease by production. The Company intends to focus efforts on the well during 2014. During the year ended December 31, 2012, the Company expended $198,500 in cash for the completion of a gas pipeline connection, surface equipment and initial well rework on the 22-1 Well. MEDINA COUNTY, OHIO In October 2014, the Company acquired a 75% non-operated interest in an exploratory well in Medina County, Ohio in exchange for an investment of $150,000. The Company will retain a 75% non-operated interest in this initial well and any future wells developed on this property. Hinto has also established a 36 square mile AMI (area of mutual interest) with the operator, which could provide for additional drilling opportunities. At December 31, 2014, the Company had provided $140,000. -60- HINTO ENERGY, INC. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2014 and 2013 The Operator drilled and completed the well during December 2014 - January 2015. In mid-January, the state of Ohio approved the well for production and currently tanks are being moved to the site and production will begin the latter half of January 2015. In addition, as the well is producing gas in addition to oil, the Operator is taking steps to link to a pipeline to sell the gas production. NOTE 5 - CONVERTIBLE PROMISSORY NOTE, SHORT TERM ------------------------------------------------ In May 2012, the Company, as part of the purchase of Cisco Pacific, issued the seller a $150,000 convertible promissory note. On May 31, 2013, the outstanding principal and accrued interest was paid in full for cash of $162,000. NOTE 6 - SUBSCRIPTIONS RECEIVED ------------------------------- During the year ended December 31, 2013, the Company had outstanding subscriptions receivable of $425,000 to purchase 850,000 shares of the Company's restricted common stock at $0.50 per share. The Company issued the 850,000 shares in February 2014. NOTE 7 - NOTES PAYABLES, OTHER ------------------------------ On July 15, 2011, as part of the purchase of the Natural Buttes properties, South Uintah entered into two promissory notes. The first was for $100,000 had a term of the earlier of July 5, 2013 or the completion of a $2 Million stock offering. The second note was for $250,000, had a due date of July 5, 2013 and a conversion rate of $5 per share. Both notes were non-interesting bearing. In December 2011, as part of the amendment of the purchase agreement for the Natural Buttes, the terms and the amounts of the notes were modified. The amount of the $100,000 note was reduced to $75,000 and the due date changed to July 5, 2013. The $250,000 note was reduced to $100,000, the conversion rate of $5 removed and the due date of the note remained at July 5, 2013. At December 31, 2013, the Company owed $100,000 under the note. In January 2014, the Company negotiated a discharge of the $100,000 note for $50,000. In July 2012, the Company re-negotiated the terms of the original $75,000 note in exchange for $5,000 principal payment on the note. As a result, the Company re-issued the note for a principal of $70,000, a new due date of July 5, 2013 and for payments of $5,000 to be made on a monthly basis. As of December 31, 2013, the Company had made total principal payments of $55,000 leaving a principal balance of $15,000 on the note. The Holder of the note verbally agreed to the extension of the term of the note and final payment was made in March 2014. NOTE 8 - LONG TERM NOTE PAYABLES, CONVERTIBLE --------------------------------------------- $2 MILLION CONVERTIBLE PROMISSORY NOTE On January 22, 2014, the Company issued a Secured Convertible Promissory Note in exchange for cash of $2,000,000 in order to support continuing operations and the Company's re-completion and drilling plans in its oil and gas fields in Utah and Montana. The Secured Convertible Promissory Note has a term of 3 years and accrues interest at a rate of 10% per annum with quarterly interest payments starting in -61- July 2014. The Note is convertible into shares of the Company's common stock at a rate of $1.25 per share. Since the stock price was below this at the time of signing the note was issued at a premium so no value is apportioned to the conversion feature when recording the issuance per ASC 470-20-05. The debt and its interest are reported as if it were a nonconvertible debt. Upon Conversion, the stock may be valued at either the book value or the market value. The Note has provisions for issuance of up to 480,000 warrants exercisable for shares of the Company's common stock, such warrants to be issued to the Note holder based on the amount of note principal converted into common stock, if any. The warrants, if issued, would have a term of 3 years from the issuance of the promissory note and an exercise price of $2.00 per share. The Note is secured by the assets consisting of the Company's leases and wells in the Mason Lake Filed in Musselshell County, Montana. During the year ended December 31, 2014, the Company paid accrued interest of $132,054 through the issuance of 297,809 shares of its restricted common stock. At December 31, 2014, the note has accrued interest of $50,411. On December 31, 2014, the Company issued a Secured Convertible Promissory Note in exchange for cash of $400,000 in order to support continuing operations. The funds were received from the holder of the $2,000,000 secured convertible promissory note disclosed above. As a result of the $400,000 investment certain terms of the $2,000,000 convertible promissory note were amended. The term of the $2,000,000 Convertible Promissory Note was extended for an additional year and the exercise price lowered to $1.00. In addition the terms of the $500,000 Convertible Promissory Note, discussed below, were extended a year and its exercise price lowered to $1.00. The $400,000 Secured Convertible Promissory Note has a term of 3 years and accrues interest at a rate of 10% per annum with quarterly interest payments. The Note is convertible into shares of the Company's common stock at a rate of $1.00 per share. Since the stock price was below this at the time of signing the note was issued at a premium so no value is apportioned to the conversion feature when recording the issuance per ASC 470-20-05. The debt and its interest are reported as if it were a nonconvertible debt. Upon Conversion, the stock may be valued at either the book value or the market value. In December 2011, the Company, in exchange for cash, issued a $500,000, secured three-year note payable, convertible at a $1 per share and bearing interest at 10% per annum, with interest payable quarterly. The note is secured by a well bore held by South Uintah in the Natural Buttes area. During the quarter ended June 30, 2013, the Company issued the holder a Class A Promissory Note, as a replacement of the original note, with the terms described above, plus 100,000 warrants to purchase common shares with a purchase price of $2.00 per share. The Warrant would have a term of 3 years from the issuance date of the Class A Promissory Note. In December 2014, the note terms were revised to the extend payment to December 31, 2017. During the year ended December 31, 2013, the Company paid accrued interest through the issuance of 80,000 shares of its restricted common stock valued at $0.50 per share. During the year ended December 31, 2014, the Company paid accrued interest through the issuance of 160,416 shares of its restricted common stock valued at prices from $0.40 to $0.50. During the year ended December 31, 2013, the Company issued its Class A Secured Convertible Promissory Notes ("Class A Promissory Notes") in exchange for $75,000, used to support ongoing operations. The Class A Promissory Notes have a term of 3 years an accrue interest at a rate of 12% per annum. The Class A Promissory Notes are convertible into shares of the Company's common stock at a rate of $1.00 per share. In addition, for every $5.00 in principal converted, -62- HINTO ENERGY, INC. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2014 and 2013 the note holder will receive a warrant to purchase one (1) common share with a purchase price of $2.00 per share. The Warrant would have a term of 3 years from the issuance date of the Class A Promissory Note. At December 31, 2014, the Company had $575,000 in outstanding Class A Promissory Notes and has accrued $17,014 in interest in connection with the Class A Promissory Notes. NOTE 9 - COMMITMENTS & CONTINGENCIES ------------------------------------ LEASES The Company sub-lets furnished office space from a third party on a month to month basis. The Company has approximately 400 square feet and pays $1,000 per month for the space. GENERAL There have been significant changes in the U.S. economy, oil and gas prices and the finance industry which have adversely affected and may continue to adversely affect the Company in its attempt to obtain financing or in its process to develop commercially feasible oil and gas production. Federal, state and local authorities regulate the oil and gas industry. In particular, gas and oil production operations and economics are affected by environmental protection statutes, tax statutes and other laws and regulations relating to the petroleum industry, as well as changes in such laws, changing administrative regulations and the interpretations and application of such laws, rules and regulations. The Company believes it is in compliance with all federal, state and local laws, regulations, and orders applicable to the Company and its properties and operations, the violation of which would have a material adverse effect on the Company or its financial condition. OPERATING HAZARDS AND INSURANCE The gas and oil business involves a variety of operating risks, including the risk of fire, explosions, blow-outs, pipe failure, abnormally pressured formation, and environmental hazards such as oil spills, gas leaks, ruptures or discharges of toxic gases, the occurrence of any of which could result in substantial losses to the Company due to injury or loss of life, severe damage to or destruction of property, natural resources and equipment, pollution or other environmental damage, cleanup responsibilities, regulatory investigation and penalties and suspension of operations. The Company to date has not acquired its own insurance coverage over its interests in the properties, instead the Company has relied on the third party operators for its properties to maintain insurance to cover its operations; however, the Company may purchase additional insurance coverage when necessary. There can be no assurance that insurance, if any, will be adequate to cover any losses or exposure to liability. Although the Company believes that the policies obtained by the third party operators provide coverage in scope and in amounts -63- HINTO ENERGY, INC. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2014 and 2013 customary in the industry, they do not provide complete coverage against all operating risks. An uninsured or partially insured claim, if successful and of significant magnitude, could have a material adverse effect on the Company and its financial condition via its contractual liability to the prospect. TITLE TO PROPERTIES The Company's practice has been to acquire ownership or leasehold rights to oil and natural gas properties from third parties. Most of the Company's current operations are conducted on properties acquired from third parties. Our existing rights are dependent on those previous third parties having obtained valid title to the properties. Prior to the commencement of gas drilling operations on those properties, the third parties customarily conduct a title examination. The Company generally does not conduct examinations of title prior to obtaining its interests in its operations, but rely on representations from the third parties that they have good, valid and enforceable title to the oil and gas properties. Based upon the foregoing, we believe that we have satisfactory title to our producing properties in accordance with customary practices in the gas industry. The Company is not aware of any title deficiencies as of the date of these financial statements. NOTE 10 - STOCKHOLDERS' EQUITY ------------------------------ PREFERRED STOCK The authorized preferred stock of the Company is 25,000,000 shares. Preferred stock can be designated in any series or classes and with those rights, privileges and preferences to be determined at the discretion of the Company's Board of Directors. At December 31, 2013, the Company has not designated any series of preferred stock or issued any shares of preferred stock. COMMON STOCK The authorized common stock of the Company is 50,000,000 shares of common stock with a $0.001 par value. At December 31, 2014, the Company had 21,859,994 shares of its common stock issued and outstanding. During the year ended December 31, 2014, the Company issued 910,000 shares of its restricted common stock as payment for an outstanding subscription agreement of $455,000. During the year ended December 31, 2014, the Company issued 120,000 shares of its restricted common stock as in exchange for $60,000. During the year ended December 31, 2014, the Company issued 250,000 shares of its restricted common stock for services valued at $125,000. During the year ended December 31, 2014, the Company issued 458,226 shares of its restricted stock as a payment of $208,481 in interest on its outstanding long term $2,500,000 in convertible promissory notes. During the year ended December 31, 2014, the Company rescinded a transaction from 201l to purchase an interest in certain wells in Oklahoma after the outcome of certain litigation the seller was involved in. In connection with the purchase of a 5% interest the Company issued 30,000 shares of its restricted common stock valued at $15,000. Due to a failure to perform, the Company rescinded the transaction and the 30,000 shares have been returned and cancelled. -64- HINTO ENERGY, INC. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2014 and 2013 2013 During the year ended December 31, 2013, the Company issued 1,163,000 shares of its restricted common stock for $581,500 at a price of $0.50 per share. During the year ended December 31, 2013, the Company issued 500,000 shares of its restricted common stock as payment for an outstanding subscription agreement of $250,000. During the year ended December 31, 2013, the Company issued 2,000,000 shares of its restricted common stock upon the exercise of warrants at $0.50 per share. During the year ended December 31, 2013, the Company issued 60,000 shares of its restricted common stock for investor relation services valued at $30,000. During the year ended December 31, 2013, the Company issued 80,000 shares of its restricted stock as a payment of $40,123 in interest on its outstanding long term $500,000 convertible note payable. During the year ended December 31, 2013, the Company issued 50,000 shares of its restricted common stock as part of the purchase price of oil and gas leases in Cisco, Utah as described in Note 3. The shares were valued at $0.50 per share for a total value of $25,000. During the year ended December 31, 2013, the Company issued 62,242 shares of its restricted common stock as part of the purchase price of oil and gas leases in Montana, as described in Note 3. The shares were valued at $0.58 per share for a total value of $36,100. SUBSCRIPTION RECEIVABLE In December 2013, the Company received a subscription for 110,000 shares of its restricted common stock for $55,000. Prior to December 31, 2013, the Company received $25,000 of the funds and is owed the remaining $30,000. During March 2014, the Company received the remaining $30,000 and issued the shares of common stock. STOCK OPTION PLAN On August 17, 2011, the Company's shareholders approved the 2011 Hinto Energy, Inc. Stock Option and Award Incentive Plan ("Plan"). The Plan provides for the grant of stock options to directors, officers, employees, consultants, and advisors of the Company. The Plan is administered by a committee consisting of members of the Board of Directors (the "Stock Option Committee"), or in its absence, the Board of Directors. The Plan provides for a total of 2,000,000 shares of common stock to be reserved for issuance subject to options. During the year ended December 31, 2013, the Board did not approve the grant of any options to purchase shares of common stock, nor the conditions, performance or vesting requirements. During the year ended December 31, 2014, the Board approved the issuance of options to members of management of the Company. 1,700,000 fully vested options were issued. The options have a term of 3 years and an exercise price of $0.50 -65- HINTO ENERGY, INC. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2014 and 2013 per share. Using Black-Scholes, the Company valued the options at $470,900. The value of the options were expensed to consulting expense in full. The fair value of the options granted was estimated as of the grant date using the Black-Scholes option pricing model with the following assumptions: Volatility 142% Expected Warrant Term 1.5 years Risk-free interest rate 1.33% Expected dividend yield 0.00% The expected term of the options and warrants granted and sold were estimated to be the contractual term. The expected volatility was based on an average of the volatility disclosed based upon comparable companies who had similar expected option terms. The risk-free rate was based on the one-year U.S. Treasury bond rate. A summary of warrant activity for the years ended December 31, 2014 and 2013 is presented below: Weighted Average Aggregate Weighted Number Exercise Exercise Intrinsic Average of Options Price Price Value (1) Life ------------ -------- ---------- ----------- -------- Balance, January 1, 2014 - - - - - Granted 1,700,000 $0.50 $0.50 - 3 years Exercised - - - - - Expired - - - - - ------------ -------- ---------- ----------- -------- Balance, December 31, 2014 1,700,000 $0.50 $0.50 3 years ============ (1) The aggregate value of the options is less than zero, as the market price of the shares on December 31, 2014 was $0.46 per share, less than the exercise price of the option shares. WARRANTS ISSUANCES In May 2014, as part of a Consulting Agreement for one-year, the Company issued a warrant exercisable for 60,000 shares of the Company's restricted common stock. The warrant has a term of 3 years and an exercise price of $0.65 per share. The Warrant has a vesting rate of 5,000 shares per month. Using Black-Scholes, the Company valued the warrant at $25,800 and is amortizing the value of the warrant over the year period of the Consulting Agreement. The fair value of the warrant granted was estimated as of the grant date using the Black-Scholes option pricing model with the following assumptions: Volatility 156% Expected Warrant Term 1.5 years Risk-free interest rate 0.09% Expected dividend yield 0.00% -66- HINTO ENERGY, INC. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2014 and 2013 The expected term of the options and warrants granted and sold were estimated to be the contractual term. The expected volatility was based on an average of the volatility disclosed based upon comparable companies who had similar expected option terms. The risk-free rate was based on the one-year U.S. Treasury bond rate. In December 2011, the Company, in exchange for cash, issued a $500,000, secured three-year note payable, convertible at a $1 per share and bearing interest at 10% per annum, with interest payable quarterly. The note is secured by a well bore held by South Uintah in the Natural Buttes area. During the year ended December 31, 2013, the Company paid accrued interest through the issuance of 80,000 shares of its restricted common stock valued at $0.50 per share. During the quarter ended June 30, 2013, the Company issued the holder a Class A Promissory Note, as a replacement of the original note, with the terms described above, plus 100,000 warrants to purchase common shares with a purchase price of $2.00 per share. The Warrant would have a term of 3 years from the issuance date of the Class A Promissory Note. The total fair value of the warrant at the date of grant was $17,815 and was recorded as a finance cost. The Company used the following assumptions to determine the fair value of warrant grant: Expected life 3 years Volatility 103% Risk-free interest rate 0.13% Dividend yield 0 EXERCISES During the year ended December 31, 2013, the Company received exercise notices and funds of $1,000,000 for the exercise of 2,000,000 shares. EXPIRATION During the year ended December 31, 2014 warrants exercisable for a total of 4,700,000 shares, at prices ranging from $1.00 to $3.00 and held by officers and directors of the Company expired. A summary of warrant activity for the years ended December 31, 2014 and 2013 is presented below: Weighted Average ----------- ------------- Remaining Shares Under Exercise Contractual Warrant Price Life ----------------- ----------- ------------- Balance at January 1, 2013 7,500,000 $1.25 2.44 Granted 100,000 2.00 4.96 Exercised (2,000,000) 0.50 - Expired - - - ----------------- ----------- ------------- Balance at December 31, 2013 5,600,000 $1.54 2.29 ----------------- ----------- ------------- Granted 260,000 0.53 3.00 Exercised - - - Expired (4,700,000) - - ----------------- ----------- ------------- Balance at December 31, 2014 1,1600,000 $0.81 2.65 ================= -67- HINTO ENERGY, INC. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2014 and 2013 NOTE 11 - INCOME TAXES ---------------------- The Company is subject to domestic income taxes. The Company has recognized minimal income during the years ended December 31, 2013 and 2012, and therefore has paid no income tax. Deferred income taxes arise from temporary timing differences in the recognition of income and expenses for financial reporting and tax purposes. The Company's deferred tax assets consist entirely of the benefit from net operating loss (NOL) carry-forwards. The NOL carry forwards expire in various years through 2031. The Company's deferred tax assets are offset by a valuation allowance due to the uncertainty of the realization of the NOL carry-forwards. NOL carry-forwards may be further limited by a change in company ownership and other provisions of the tax laws. The Company's deferred tax assets, valuation allowance, and change in valuation allowance are as follows: Estimated NOL Valuation Net Tax Carry-forward benefit Allowance Benefit ====================================================== December 31, 2013 $784,380 $(700,264) - December 31, 2012 $520,764 $(520,764) - NOTE 12 - SUBSEQUENT EVENTS --------------------------- On January 20, 2015, the Company in exchange for $50,000 issued a $50,000 unsecured convertible promissory note. The unsecured convertible promissory note has a term of 3 years, an annual interest rate of 10% and an exercisable into shares of the Company's common stock at $1.00 per share. NOTE 13 - SUPPLEMENTAL OIL AND GAS DISCLOSURE (unaudited) --------------------------------------------------------- ESTIMATED NET QUANTITIES OF OIL AND GAS RESERVES (unaudited) Users of this information should be aware that the process of estimating quantities of "proved" and "proved developed" natural gas and crude oil reserves is very complex, requiring significant subjective decisions in the evaluation of all available geological, engineering and economic data for each reservoir. The data for a given reservoir may also change substantially over time as a result of numerous factors including, but not limited to, additional development activity, evolving production history and continual reassessment of the viability of production under varying economic conditions. Consequently, material revisions to existing reserve estimates occur from time to time. Although every reasonable effort is made to ensure that reserve estimates reported represent the most accurate assessments possible, the significance of the subjective decisions required and variances in available data for various reservoirs make these estimates generally less precise than other estimates presented in connection with financial statements. Proved reserves are estimated quantities of natural gas, crude oil and condensate that geological and engineering data demonstrate, with reasonable certainty, to be recovered in future years from known reservoirs with existing -68- HINTO ENERGY, INC. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2014 and 2013 equipment under existing economic and operating conditions. Proved developed reserves are proved reserves that can be expected to be recovered through existing wells with existing equipment and under existing economic and operating conditions. OIL AND GAS RESERVES The following tables set forth our net proved oil and gas reserves, including the changes therein, and net proved developed reserves at December 31, 2014 and 2013. Net Proved Developed And Undeveloped Reserves -of OIL (UNAUDITED): Utah Montana Ohio Total ---------- --------- ------- ---------- Balance January 1, 2013 267,000 - - 267,000 Purchase of properties 68,597 - - 68.597 Extension / discoveries - - - - Production (878) - - (878) Revisions of previous estimates - - - - Disposition of properties - - - - ---------- --------- ------- ---------- Balance, December 31, 2013 336,475 - - 336,475 ---------- --------- ------- ---------- Purchase of properties - 41,096 - 41,096 Extension / discoveries (1) 16,014 31,687 - 47,701 Production (803) (5,777) - (6,580) Revisions of previous estimates (2) (312,929) - - (312,929) Disposition of properties - - - - ---------- --------- ------- ---------- Balance, December 31, 2014 38,757 67,066 - 105,763 ========== ========= ======= ========== (1) In 2013, the Company purchased the Mason Lake Oil Field in Montana and during the latter half of 2013, proceeded to conduct re-work efforts on the field. At the end of December 31, 2013, the field was still under re-work process and determination and was not included in the 2013 reserve study. The field was brought on production in 2014 and resulted in additions in extensions to our reserves. (2) At December 31, 2014, we revised our non-producing reserves for our Cisco Field in Utah by 312,929 barrels, primarily due to a combination of pricing revisions, brought on by commodity price declines and negative performance revisions. Net Proved Developed And Undeveloped Reserves of NATURAL GAS: 2014 2013 -------------- --------------- (unaudited) (unaudited) January 1st 282,013 147,000 Purchase of properties - 135,013 Revisions of previous estimates (1) 153,234 - Extension, discoveries, other estimates - - Production - - Disposition of properties - - -------------- --------------- December 31st 435,247 282,013 ============== =============== -69- HINTO ENERGY, INC. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2014 and 2013 (1) The Company's gas wells are located at its Cisco Field and Natural Buttes Field in Utah. At December 31, 2014, the Company had shut in the Cisco gas production due to the low price of gas and the intermittent inability to sell gas, as the local tap facility had various operational issues. During the fourth quarter of 2014, the gas facility took steps to reopen and in the latter part of the first quarter of 2015, the Company began selling gas from its Cisco Field wells. As a result of this a re-work on certain gas wells, the reserves for gas in our Cisco Field was upwardly revised. Net Proved Oil And Gas Reserves Consisted Of The Following At December 31, 2014 And 2013: Oil Reserves Gross Natural Gas Reserves Bbls Mcf 2014 2013 2014 2013 ------------ ------------ ------------- ------------ (unaudited) (unaudited) (unaudited) (unaudited) Proved developed producing 70,828 23,127 61,521 21,000 Proved developed non-producing 41,515 - - Proved undeveloped - 313,348 419,233 282,000 ------------ ------------ ------------- ------------ Total proven 112,343 336,475 480,754 303,000 ============ ============ ============= ============ Results Of Operations For Oil And Gas Producing Activities For The Year Ended December 31, 2014 And 2013: Year Ended December 31, 2014 2013 --------------- ------------- (unaudited) (unaudited) Revenue $ 475,630 $ 65,615 Operating expenses (includes re-working costs, not capitalized) 389,556 316,888 Amortization & depreciation 144,772 28,357 Depletion 32,820 3,896 -------------- -------------- Operating loss (91,518) (283,526) Income tax provision - - -------------- -------------- Results of operations for oil and gas properties $ (91,518) $ (283,526) ============== ============== -70- HINTO ENERGY, INC. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2014 and 2013 Cost Incurred For Oil And Gas Property Acquisition, Exploration And Development Activities For the Years Ended December 31, 2014 2013 ---------------- ----------------- (unaudited) (unaudited) Property acquisition Unproved $ 290,000 $ 226,100 Proved - - Exploration - - Development - 118,620 ---------------- ----------------- Total costs incurred $ 290,000 $ 344,720 ================ ================= AGGREGATE CAPITALIZED COSTS Capitalized costs relating to oil and gas activities for the years ended December 31, 2014 and 2013 are as follows: December 31, 2014 2013 --------------- ----------------- (unaudited) (unaudited) Proved $ 1,166,300 $ 1,004,300 Unproved 290,000 - Other Property and Equipment 950,601 437,109 --------------- ----------------- Total capitalized costs $ 2,406,901 $ 1,441,409 Accumulated depreciation and depletion (177,592) (58,264) --------------- ----------------- Net capitalized costs $ 2,229,309 $ 1,382,785 =============== ================= Standardized Measure of Discounted Future Net Cash Flows Information with respect to the standardized measure of discounted future net cash flows relating to proved reserves is summarized below. The price used to estimate the reserves is held constant over the life of the reserve. Future production and development costs are derived based on current costs assuming continuation of existing economic conditions. -71- HINTO ENERGY, INC. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2014 and 2013 The discounted future net cash flows related to proved oil and gas reserves at December 31, 2014 and 2013: December 31, 2014 Utah Montana Total ------------- ------------- ------------ (unaudited) (unaudited) (unaudited) Future cash inflows $ 1,347,995 $ 2,708,402 $ 4,056,397 Less future costs: Operational & Taxes (1,093,795) (996,794) (1,635,762) Development - - - ------------- ------------- ------------ Future net cash flows 709,063 1,711,608 2,420,671 10% discount factor (108,247) (261,264) (369,511) ============= ============= ============ Standardized measure of discounted costs future net cash flows $ 600,816 $ 1,450,344 $ 2,051,160 December 31, 2013 Utah Montana Total -------------- ------------ -------------- (unaudited) (unaudited) (unaudited) Future cash inflows $ 2,038,603 $ - $ 2,038,603 Less future costs: Operational & Taxes (1,093,795) - (1,093,795) Development - - - -------------- ------------ -------------- Future net cash flows 944,808 - 944,808 10% discount factor (410,980) - (410,980) ============== ============ ============== Standardized measure of discounted costs future net cash flows $ 533,828 $ - $ 533,828 CHANGES IN DISCOUNTED FUTURE NET CASH FLOWS

~~COMMON~~The ~~STOCK~~following summarizes the principal sources of change in the standardized measure of discounted future net cash flows during the years ended December 31, 2014 and 2013: December 31, 2014 Utah Montana Total -------------- ----------------~~-----~~ ----------------~~-------------------~~ ~~Number~~(unaudited) (unaudited) (unaudited) Beginning of ~~South~~the ~~Uintah~~period ~~Shares~~$ ~~Number~~533,828 of$ ~~Shares~~- of$ ~~Hinto~~533,828 ~~Issued~~Purchase ~~Issued~~of ~~George~~reserves ~~Harris~~- ~~550~~849,~~000~~649 ~~550~~849,~~000~~649 ~~Gary~~Changes ~~Herick~~in costs and prices (2457,164) 2(457,~~000~~164) Extension and discoveries - 810,~~000~~957 1810,~~640~~957 Sales of oil and natural gas produced during the period,~~000~~ ~~Max~~net ~~Sommer~~of ~~200~~production costs 293,~~000~~337 ~~200~~(210,~~000~~262) ~~Kevin~~83,075 ~~Blair~~Timing ~~325~~and other considerations 230,~~000~~815 ~~325~~- 230,~~000~~815 ~~David~~-------------- ~~Keller~~---------------- ~~525~~---------------- End of period $ 600,~~000~~816 ~~525~~$ 1,~~000~~450,344 $ 2,051,160

-72- HINTO ENERGY, INC. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2014 and 2013 December 31, 2013 Utah Montana Total ----------- ----------- ----------- (unaudited) (unaudited) (unaudited) Beginning of the period $6,547,000 $ - $6,547,000 Purchase of proved reserves 204,000 - 204,000 Changes in costs and prices (143,164) (143,164) Extension and discoveries - - - Sales of oil and natural gas produced during the period, net of production costs (65,000) - (65,000) Timing and other considerations (6,009,008) - (6,009,008) ---------- ----------- ----------- End of period $ 533,828 $ - $ 533,828 -73- SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. HINTO ENERGY, INC. Dated: April 15, 2015 By: /s/ George Harris ------------------------------------------ George Harris, Chief Financial Officer (Principal Executive Officer & Principal Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Dated: April 15, 2015 HINTO ENERGY, INC. /s/ George Harris ------------------------------------------- George Harris, Director /s/ Gary Herick ------------------------------------------- Gary Herick, Director /s/ J. David Keller ------------------------------------------- J. David Keller, Director -74-

----------------------------------- ----------------------------------- Number of South Uintah Warrants Number of Warrants of Hinto Issued Issued George Harris (1) 550,000 550,000 Gary Herick (2) 1,000,000 1,000,000 Max Sommer (3) 200,000 300,000 Kevin Blair (4) 325,000 325,000 David Keller (5) 525,000 525,000

Year Ended December 31, 2012 2011 ----------------------------- ---------------------------- Audit Fees $14,960 $1,500 Audit-related Fees $0 $0 Tax Fees $0 $0 All Other Fees $0 $0 ----------------------------- ---------------------------- Total Fees $14,960 $1,500

--------------- -------------------------------------------------------------------- ----------------- Number Description 3.1 Articles of Incorporation of Hinto Energy, Inc. (1) 3.2 Bylaws of Hinto Energy, Inc. (1) 3.3 Amendment to Articles of Incorporation of Hinto Energy, Inc. (7) 3.4 Articles of Incorporation of South Uintah Gas Properties, Inc. (8) 3.5 Amendment to Articles of Incorporation of South Uintah Gas (8) Properties, Inc. 3.6 Bylaws of South Uintah Gas Properties, Inc. (8) 4.1 Form of Vesting Warrants (8) 4.2 Form of $0.50 Warrants (8) 10.1 Farmout Agreement (2) 10.2 Extension to Farmout Agreement (2) 10.3 Extension to Farmout Agreement - 2009 (3) 10.4 Extension to Farmout Agreement - 2010 (4) 10.5 Share Purchase Agreement (5) 10.6 Share Acquisition and Exchange Agreement (6) 10.7 Amended Share Exchange and Acquisition Agreement, dated (8) January 23, 2012 10.8 Asset Purchase & Sales Agreement, dated May 9, 2012 (9) 31.1 Certification of Chief Financial Officer & Principal Executive Filed Herewith Officer pursuant to Section 302 of the Sarbanes-Oxley Act 32.2 Certification of Chief Financial Officer & Principal Executive Filed Herewith Officer pursuant to Section 906 of the Sarbanes-Oxley Act 101.INS XBRL Instance Document Filed Herewith(10) 101.SCH XBRL Taxonomy Extension Schema Document Filed Herewith(10) 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document Filed Herewith(10) 101.DEF XBRL Taxonomy Extension Definition Linkbase Document Filed Herewith(10) 101.LAB XBRL Taxonomy Extension Label Linkbase Document Filed Herewith(10) 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document Filed Herewith(10) --------------- ---------------------------------------------------------------------- ---------------------

HINTO ENERGY, INC. CONSOLIDATED BALANCE SHEETS December 31, December 31, 2012 2011 --------------- --------------- Assets Current Assets: Cash $ 57,709 $ 487,501 Accounts Receivable - - Deposits (4,474) 25,000 --------------- --------------- Total Current Assets 53,235 512,501 --------------- --------------- Property and Equipment: Machinery 16,500 --------------- --------------- Oil and Natural Gas Properties: Proved Properties 803,200 478,200 Unproved Properties - - Other Property and Equipment 213,555 - Less Accumulated Depreciation and Depletion (24,283) - --------------- --------------- Total Other Assets 992,472 478,200 --------------- --------------- Total Assets $ 1,062,207 $ 990,701 =============== =============== Liabilities and Stockholders' (Deficit) Equity Current liabilities Accounts payable $ 28,887 $ 71,315 Accrued liabilities 78,268 47,510 Convertible notes payable - 500,000 Subscription received 250,000 40,000 Notes payable, other 405,000 375,000 --------------- --------------- Total Current Liabilities 762,155 1,033,926 Asset recovery obligations 72,122 Long term note payable 500,000 500,000 --------------- --------------- Total liabilities $ 1,334,277 $ 1,533,926 --------------- --------------- Stockholders' (Deficit) Equity Preferred stock, $0.001 par value; 25,000,000 shares authorized, no shares issued and outstanding - - Common stock, $0.001 par value; 50,000,000 shares authorized, 16,236,527 and 11,375,000 shares issued and outstanding at December 31, 2012 and 2011, respectively 16,237 11,375 Additional paid-in capital 2,315,515 272,796 Deficit accumulated during the development stage (2,603,822) (827,295) --------------- --------------- Total Stockholders' (Deficit) Equity (272,070) (543,124) --------------- --------------- Total liabilities and stockholders' (deficit) equity $ 1,062,207 $ 990,701 =============== =============== See the notes to these consolidated financial statements.

HINTO ENERGY, INC. CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2012 AND FOR THE PERIOD OF MARCH 8, 2011 (INCEPTION) THROUGH DECEMBER 31, 2011 For The Year From March 8, Ended 2011 (Inception) December 31, Through 2012 December 31, 2011 --------------------- ------------------------ Revenue: $ 29,908 $ - Direct Cost of Revenue 107,982 - Accretion of asset recovery obligation 72,122 - Depreciation and Depletion 24,283 - --------------------- ------------------------ (174,479) Operational expenses: Office expenses 446,231 245,322 Goodwill write off - 339,195 Consulting fees 364,605 209,203 --------------------- ------------------------ Total operational expenses 810,836 793,720 --------------------- ------------------------ Other Income (Expenses) Litigation settlement expense (704,247) - Interest expense (86,965) (33,575) --------------------- ------------------------ Total other income (expense) (791,212) (33,575) --------------------- ------------------------ Net loss $ (1,776,527) $ (827,295) ===================== ======================== Less: Loss attributable to non-controlling interest 31,422 ------------------------ Net loss attributable to South Uintah Gas Properties, Inc. $ (795,873) ======================== Per share information Net loss per common share Basic $ (0.12) $ (0.14) Fully diluted * * ===================== ======================== Weighted average number of common stock outstanding 14,270,997 5,824,666 ===================== ======================== * Not provided as it is anti-dilutive See the notes to these consolidated financial statements.

HINTO ENERGY, INC. CONSOLIDATED STATEMENT OF STOCKHOLDER'S (DEFICIT) EQUITY FOR THE PERIOD FROM MARCH 8, 2011 (Inception) THROUGH DECEMBER 31, 2012 Deficit Stockholders' accumulated Equity South Additional During Uintah Gas Common Stock paid-in Development Properties Noncontrolling Stockholders' Number of Shares Amount Capital Stage Inc. Interest Equity --------------- -------- ----------- ----------- ----------- ------------ ------------ Issuance of Founder Shares for cash 1,000,000 $ 1,000 $ (900) $ - $ 100 - $ 100 Issuance of Founder Shares for cash 1,000,000 1,000 (900) - 100 - 100 Issuance of Founder Shares for services 5,500,000 5,500 (4,950) - 550 - 550 Issuance of Common Stock 2,000,000 2,000 (1,800) - 200 - 200 for oil and gas leases Shares cancelled in exchange for Hinto shares held by South Uintah (300,000) (300) 300 - - - - Issuance of shares for consulting 175,000 175 (157) - 18 - 18 Issuance of stock for cash by Hinto - - 147,000 - 147,000 63,000 210,000 Shareholder capital contribution - - 63,000 - 63,000 27,000 90,000 Minority interest at purchase of majority interest in subsidiary - - - - - (16,797) (16,797) Net Loss - - - (795,873) (795,873) (31,422) (827,295) Recapitalization, due to reverse merger 2,000,000 2,000 71,203 (31,422) 41,781 (41,781) - --------------- -------- ----------- ----------- ----------- ------------ ------------ Balance - December 31, 2011 11,375,000 11,375 # 272,796 # (827,295)# (543,124) - (543,124) --------------- -------- ----------- ----------- ----------- ------------ ------------ Issuance of Shares for cash 915,000 915 456,585 - 457,500 - 457,500 Conversion of notes to common stock 2,121,931 2,122 540,910 - 543,032 - 543,032 Issuance of shares for services 348,868 349 174,086 - 174,435 - 174,435 Issuance of shares for interest 75,728 76 37,738 - 37,814 - 37,814 Issuance of shares for litigation settlement 1,400,000 1,400 698,600 - 700,000 - 700,000 Issuance of warrants for litigation settlement - - 134,800 - 134,800 - 134,800 Net Loss - - - (1,776,527) (1,776,527) - (1,776,527) --------------- -------- ----------- ----------- ----------- ------------ ------------ Balance - December 31, 2012 16,236,527 $ 16,237 $ 2,315,515 $(2,603,822) $ (272,070) $ - $ (272,070) =============== ======== =========== =========== =========== ============ ============ See the notes to these consolidated financial statements.

HINTO ENERGY, INC. CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2012 AND FOR THE PERIOD FROM MARCH 8, 2011 (INCEPTION) THROUGH DECEMBER 31, 2011 For the Year From March 8, Ended 2011 (Inception) December 31, Through 2012 December 31, 2011 ----------------------------------------------- Cash Flows from Operating Activities: Net Loss $ (1,776,527) $ (827,295) Adjustments to net loss for non-cash items: Accrued interest converted to stock 37,814 - Stock issued for services 174,435 550 Litigation settlement expense 934,800 - Write down of goodwill in subsidiary - 339,195 Depreciation & Depletion Expense 24,283 - Asset Recovery Expense 72,122 - Adjustments to reconcile net loss to net cash used in operating activities: Increase in accounts receivable - - Decrease (increase) in deposits and advances 29,474 (25,000) (Decrease) increase in accounts payable (42,529) 15,441 Increase in accrued liabilities 23,886 47,510 --------------------- ------------------- Net Cash Used by Operating Activities (522,242) (449,599) --------------------- ------------------- Cash Flows from Investing Activities Investment to acquire 70% interest in subsidiary - (300,000) Purchase of Machinery (16,500) - Investment in well (213,550) - Purchase of Oil and Gas leases (175,000) (303,000) --------------------- ------------------- Net Cash Used in Investing Activities (405,050) (603,000) --------------------- ------------------- Cash Flows from Financing Activities: Proceeds from convertible promissory notes 25,000 1,000,000 Increase in stock subscriptions payable 210,000 40,000 Proceeds from other notes payable - 400,000 Payments on other notes payable (195,000) (200,000) Proceeds from shareholder contribution - 90,000 Proceeds from stock sales 457,500 210,100 --------------------- ------------------- Net Cash Provided by Financing Activities 497,500 1,540,100 --------------------- ------------------- Net Increase (decrease) in Cash (429,792) 487,501 Cash and Cash Equivalents - Beginning of Period 487,501 - --------------------- ------------------- Cash and Cash Equivalents - End of Period $ 57,709 $ 487,501 ===================== =================== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for interest expense $ - $ - ===================== =================== Cash paid for income taxes $ - $ - ===================== =================== SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES: Net deficit of subsidiary on purchase $ - $ (55,992) ===================== =================== Issuance of notes payable for assets $ 150,000 $ 175,000 ============================================ Issuance of common stock for deposits and accounts payable $ 199,309 $ 100 ===================== =================== Issuance of common stock for oil leases $ - $ 200 ===================== =================== See the notes to these consolidated financial statements.

Life in December 31, 2012 December 31, 2011 Asset Type Years --------------------------------- ------------ ------------------ ------------------ Machinery 5 - 7 $16,500 $ - ------------ ------------------ ------------------ Subtotal 16,500 - Less Accumulated Depreciation - - ------------ ------------------ ------------------ Net Book Value $16,500 $ - ============ ================== ==================

Proved properties $803,200 Unproved properties - ------------------- $ 803,200 Accumulated depletion 2,047 ------------------- $801,153 ===================

Weighted Average -------------------------------------- Shares Under Remaining Warrant Exercise Price Contractual Life ------------------ ------------------- ------------------ Outstanding at March 8, 2011 - $ - - Granted 6,700,000 1.31 1.71 Exercised - - - Expired - - - ------------------ ------------------- ------------------ Outstanding at December 31, 2011 6,700,000 $1.31 1.71 Granted 800,000 0.75 4.96 Exercised - - - Expired - - - ------------------ ------------------- ------------------ Outstanding at December 31, 2012 7,500,000 $1.25 2.44 ================== =================== ==================

2012 --------------- (unaudited) January 1, 2012 - Purchase of properties 267 Revisions of previous estimates - Extension, discoveries, other estimates - Production - Disposition of properties - --------------- December 31, 2012 267 ===============

2012 --------------- (unaudited) January 1, 2012 - Purchase of properties 147 Revisions of previous estimates - Extension, discoveries, other estimates - Production - Disposition of properties - --------------- December 31, 2012 147 ===============

Oil Natural Gas Reserves Reserves Gross Gross MBbls MMScf -------------- -------------- (unaudited) (unaudited) Proved developed producing 24 - Proved undeveloped 243 147 -------------- -------------- Total proven 267 147 ============== ============== Results of operations for oil and gas producing activities for the year ended December 31, 2012 The Year Ended December 31, 2012 (unaudited) Revenue $29,908 Operating expenses (re-working costs) 107,982 Depletion 2,407 ----------------- Operating loss (80,481) Income tax provision - ----------------- Results of operations for oil and gas properties $ (80,481) =================

(unaudited) Property acquisition Unproved $ - Proved 803,200 Exploration - Development 213,555 ----------------- Total costs incurred $ 1,016,755 ================= Aggregate capitalized costs Capitalized costs relating to oil and gas activities are as follows: December 31, 2012 (unaudited) Proved $ 1,016,755 Unproved - ----------------- Total capitalized costs $ 1,016,755 Accumulated depreciation and depletion (24,283) ----------------- Net capitalized costs $ 992,742 =================

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