NOTE 4. ACQUISITION OF BOW ENERGY LTD., A RELATED PARTY On November 30, 2017, we signed an Arrangement Agreement (the Arrangement) to acquire Bow Energy Ltd, a Canadian company which was then publicly-traded on the Toronto Venture Exchange (Bow and the Acquisition). Bow is considered a related party due to the fact that the largest shareholder of Bow, BSIH Ltd. (BSIH), was affiliated with Petrolias CEO, Zel C. Khan. Bows offices are in Calgary, Alberta, Canada. On February 27, 2018, the Acquisition closed, and we acquired all of the issued and outstanding shares of capital stock of Bow (each a Bow Share). The Arrangement was approved at a special meeting of shareholders of Bow held on February 21, 2018. None of the related party shareholders were included in this meeting. The vote was strictly between the non-affiliated shareholders and final approval of the Arrangement was granted by the Court of Queens Bench of Alberta on February 23, 2018. BSIHs Chief Executive Officer, Ilyas Chaudhary, is the father of Petrolias CEO, Zel C. Khan. Mr. Chaudhary had a controlling interest in BSIH prior to the acquisition of Bow. Therefore, the Bow acquisition is a related party transaction. Under the terms of the Arrangement, Bow shareholders are deemed to have received 1.15 Petrolia common stock shares for each Bow Share. A total of 106,156,712 shares of the Companys common stock were issued to the Bow shareholders as a result of the Arrangement, plus additional shares in connection with the rounding described below. The Arrangement provided that no fractional shares would be issued in connection with the Arrangement, and instead, each Bow shareholder otherwise entitled to a fractional interest would receive the nearest whole number of Company shares. For example, where such fractional interest is greater than or equal to 0.5, the number of shares to be issued would be rounded up to the nearest whole number and where such fractional interest is less than 0.5, the number of shares to be issued would be rounded down to the nearest whole number. In calculating such fractional interests, all shares issuable in the name of or beneficially held by each Bow shareholder or their nominee as a result of the Arrangement shall be aggregated. The Arrangement provides that any certificate formerly representing Bow common stock not duly surrendered on or before the last business day prior to the third anniversary of the closing date will cease to represent a claim by, or interest of, any former shareholder of any kind of nature against Bow or the Company and on such date all consideration or other property to which such former holder was entitled shall be deemed to have been surrendered to the Company. The Company also assumed all of the outstanding warrants to purchase shares of common stock of Bow and certain options to purchase shares of common stock of Bow in connection with the Arrangement (i.e., each warrant/option to purchase one (1) share of Bow represents the right to purchase one (1) share of the Company following the closing). At the closing of the Acquisition, the Company issued the Bow shareholders the shares described above and assumed warrants to purchase 320,000 shares of common stock valued at $103,632. A subsidiary of Bow Energy Ltd., Bow Energy Pte. Ltd., owns 75% of the issued and outstanding shares of Renco Elang Energy Pte. Ltd. (REE) which owns a 75% working interest in a Production Sharing Contract referred to as South Block A (the Assets or SBA) located onshore, North Sumatra, Indonesia. REE is the operator of the Assets. Effectively, the Company has a 44.48% working interest in the Assets. On May 24, 2017, Bows wholly-owned subsidiary, Bow Energy International Holdings Inc. (BEIH), acquired all of Bukit Energy Inc.s shareholding interests in five Singapore holding companies (the Holding Companies) that own the interests in four Production Sharing Contracts (PSCs) and one non-conventional joint study agreement (JSA), all interests are located onshore in Sumatra, Indonesia. The Holding Companies being acquired were Bukit Energy Central Sumatra (Mahato) Pte. Ltd. (Mahato), Bukit Energy Palmerah Baru Pte. Ltd. (Palmerah Baru), Bukit Energy Resources Palmerah Deep Pte. Ltd. (Palmerah Deep), Bukit Energy Bohorok Pte. Ltd. (Bohorok), and Bukit Energy Resources North Sumatra Pte. Ltd. (Bohorok Deep), collectively referred to as the Bukit assets. The Holding Companies own the following interests in the conventional and non-conventional PSCs and non-conventional JSA: ? Bohorok PSC (conventional)  operated 50% participating interest, 465,266 net acres ? Palmerah Baru PSC (conventional)  operated 54% participating interest, 98,977 net acres ? Palmerah Deep PSC (non-conventional)- operated 69.36% participating interest, 170,398 net acres ? Mahato PSC (conventional)- 20% participating interest, 167,115 net acres, non-operated ? Bohorok Deep (non-conventional)- 20.25% participating interest in a JSA, non-operated with option to become operator The fair value of the 106,156,712 common shares issued as consideration for the acquisition of Bow ($34,607,088) was determined based on the acquisition date fair value of the shares. The purchase price allocation can be summarized as follows: Cash $ 3,784 Other current assets 4,763 Deposits 337,997 Furniture, equipment &amp; software 12,059 Unproved properties and properties not subject to amortization and excess purchase price 36,835,553 Accounts payable (1,157,876 ) Note payable $ (1,429,192 ) Acquisition costs included a grant of 100,000 shares ($37,000) of common stock as a bonus for the Bow Energy acquisition at a fair value of $0.37 per share. In addition, the Company incurred $103,632 in transaction costs associated with the issuance of warrants to purchase 320,000 shares of common stock in connection with the transaction. The amount of Bows loss included in Petrolias consolidated income statement for the year ended December 31, 2018 and the loss of the combined entity had the acquisition date been January 1, 2017, are as follows: Revenue Earnings (Loss) February 28, 2018 to December 31, 2018 $  $ (211,676 ) Supplemental pro forma from January 1, 2018 to December 31, 2018  (38,079,663 ) Supplemental pro forma from January 1, 2017 to December 31, 2017 $ 3,103,394 $ (3,961,356 )