Recent Events

9 Months Ended

Sep. 30, 2014

7.	Recent Events

On February 26, 2014, the Company completed the sale of a 46% working interest (comprising a 34.5% net revenue interest) in an oil, gas and mineral lease covering 430 acres in Duval County, Texas, to RTO Exploration, LLC (“Buyer”) for the purchase price of $400,000. In addition to the purchase price, in 2013 the Buyer paid a $10,000 non-refundable option payment to the Company. The purchase price was the result of negotiations between the Company and the Buyer.

On July 7, 2014, we assigned our interest in the Crouch, Lane Heady, Shillingburg, Duvalle 1&2 and RP Wilson well leases to DMV Pipeline LLC. We received $50,000 as consideration for the assignment of interest.

To account for the sale, we applied the two step process required by the full cost rules. First we calculated the impact of the sale of the working interest on the Company’s depletion rate, determining that the resulting change was not significant (less than 10%). Therefore, step two of the process (calculate loss or gain on sale) was not applicable, and we recognized the $50,000 proceeds as a direct reduction to the full cost pool.

United American Petroleum Corp. 10-Q