Oil and Gas Assets

9 Months Ended

Jan. 31, 2019

The following table summarizes the activity of the oil and gas assets by project for the nine months ended January 31, 2019:

	Oklahoma			Texas			Other (1)		Total
Balance May 1, 2018	$	3,779,414		$	-		$	100,000	$	3,879,414
Additions		688,218			2,430,139			-		3,118,357
Depreciation, depletion and amortization		(207,700	)		(123,883	)		-		(331,583	)
Balance January 31, 2019	$	4,259,932		$	2,306,256		$	100,000	$	6,666,188

(1)	Other property consists primarily of four used steam generators and related equipment that will be assigned to future projects. As of January 31, 2019, and April 30, 2018, management concluded that impairment was not necessary as all other assets were carried at salvage value.

Kern and Kay County Projects. On February 14, 2018, the Company entered into a Purchase and Exchange Agreement with Red Fork Resources (“Red Fork”), pursuant to which (i) the Company agreed to convey to Mountain View Resources, LLC, an affiliate of Red Fork, 100% of its 13.7% working interest in and to an area of mutual interest (“AMI”) in the Mountain View Project in Kern County, California, and (ii) Red Fork agreed to convey to the Company 64.7% of its 85% working interest in and to an AMI situated in Kay County, Oklahoma (the “Red Fork Exchange”). The fair value of the assets acquired was $108,333 as of the effective date of the agreement. Following the Red Fork Exchange, the Company and Red Fork each retained a 2% overriding royalty interest in the projects that they respectively conveyed. Under the terms of the Purchase and Exchange Agreement, all revenue and costs, expense, obligations and liabilities earned or incurred prior to January 1, 2018 (the “Effective Date”) shall be borne by the original owners of such working interests, and all of such revenue and costs, expense, obligations and liabilities that occur subsequent to the effective date shall be borne by the new owners of such working interests.

The acquisition of the additional concessions in Kay County, Oklahoma added additional prospect locations adjacent to the Company’s 106,000-acre concession in Osage County, Oklahoma. The similarity of the prospects in Kay and Kern County allows for the leverage of assets, infrastructure and technical expertise.

Oklahoma Properties. During the nine months ended January 31, 2019, the Company recorded additions related to development costs incurred of approximately $688,000 for proven oil and gas assets.

Texas Properties. Effective on September 24, 2018, the Company acquired a 66.67% membership interest in LBE Partners from ICO in exchange for 300,000 restricted shares of the Company’s common stock. LBE Partners has varying working interest in multiple oil and gas producing wells located in Texas. The Company recorded additions of approximately $2,430,000 for oil and gas assets related to this acquisition.

Petro River Oil Corp. 10-Q