NOTE 8 – STOCK-BASED COMPENSATION

During the three months ended December 31, 2019, upon the passing of a member of the management team, the Company modified a stock option grant for three million shares made to said management team member in June 2018 to vest such award immediately. The Company recorded approximately $8,000 in additional compensation expense related to this modification.

Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award using the Black Scholes option pricing model, and is recognized over the vesting period. The Company recognized $367,841 and $393,000 in stock-based compensation expense for the quarters ended December 31, 2019 and 2018, respectively. A portion of these costs, $186,675 and $318,658 were capitalized to unproved properties for the three months ended December 31, 2019 and December 31, 2018, respectively, with the remainder recorded as general and administrative expenses for each respective period.

The following table summarizes the Company’s stock option activity during the three months ended December 31, 2019:

As of December 31, 2019, there was approximately $0.6 million of unrecognized stock-based compensation expense to be recognized over a period of four months.