SUPPLEMENTAL OIL AND GAS INFORMATION

12 Months Ended

Sep. 30, 2016

SUPPLEMENTAL OIL AND GAS INFORMATION [Abstract]

SUPPLEMENTAL OIL AND GAS INFORMATION

NOTE 19: SUPPLEMENTAL OIL AND GAS INFORMATION

Capitalized Costs Related to Oil and Gas Producing Activities

		September 30,			September 30,
		2016			2015
Evaluated oil and gas properties	$	20,393,715		$	19,856,659
Less accumulated depletion and impairment		(20,387,721	)		(19,540,800	)
Net capitalized costs for evaluated oil and gas properties	$	5,994		$	315,859

Costs incurred in Oil and Gas Property Acquisition, Exploration and Development Activities

		September 30,		September 30,
		2016		2015
Evaluated Property Acquisition Costs	$	–	$	–
Evaluated Exploration Costs		537,56		748,837
	$	537,56	$	748,837

Results of Operations from Oil and Gas Producing Activities

		September 30,			September 30,
		2016			2015
Revenue	$	351,312		$	452,686
Production costs		(533,381	)		(482,798	)
Depletion, depreciation and amortization		(604,591	)		(259,358	)
Impairment of oil and gas properties		(242,330	)		(898,861	)
Loss from oil and gas operations	$	(1,028,990	)	$	(1,188,331	)

Reserve Information

The following estimates of proved reserve and proved developed reserve quantities and related standardized measure of discounted net cash flow are estimates only, and do not purport to reflect realizable values or fair market values of the Company’s reserves. The Company emphasizes that reserve estimates are inherently imprecise and that estimates of new discoveries are more imprecise than those of producing oil and gas properties. Accordingly, these estimates are expected to change as future information becomes available. All of the Company’s reserves are located in the United States.

Future cash flows are computed by applying prices of oil which are based on the respective 12-month unweighted average of the first of the month prices to period end quantities of proved oil reserves. The 12-month unweighted average of the first of the month market prices used for the standardized measures below was $31.59/barrel and $46.14/barrel for liquids for September 30, 2016 and 2015. Future operating expenses and development costs are computed primarily by the Company’s petroleum engineers by estimating the expenditures to be incurred in developing and producing the Company’s proved natural gas and oil reserves at the end of the period, based on period end costs and assuming continuation of existing economic conditions.

Future income taxes are based on period end statutory rates, adjusted for tax basis and applicable tax credits. A discount factor of ten percent was used to reflect the timing of future net cash flows. The standardized measure of discounted future net cash flows is not intended to represent the replacement cost of fair value of the Company’s natural gas and oil properties. An estimate of fair value would also take into account, among other things, the recovery of reserves not presently classified as proved, anticipated future changes in prices and costs, and a discount factor more representative of the time value of money and the risks inherent in reserve estimate of natural gas and oil producing operations.

Proved Oil and Gas Reserve Quantities

	September 30,		September 30,
	2016		2015
	Oil		Oil
	(Mbbl)		(Mbbl)
Balance beginning of the year	211,097		33,090
Revisions of previous estimates	(199,213	)	186,546
Production	(8,424	)	(8,539	)
Balance end of the year	3,460		211,097

Standardized Measure of Discounted Future Net Cash Flow

		September 30,			September 30,
		2016			2015
Future cash inflows	$	109,321		$	8,992,048
Future production and development costs		(103,877	)		(2,776,956	)
Future income tax recovery (expenses)		(1,905	)		(2,175,282	)
Future net cash flows		3,539			4,039,810
10% annual discount for estimated timing of cash flows		358			(1,557,463	)
Standardized measure of discounted future net cash flows	$	3,897		$	2,482,347

Sources of Changes in Discounted Future Net Cash Flows

		September 30,			September 30,
		2016			2015
Standardized measure of discounted future net cash flows at the beginning of the year	$	2,482,347		$	582,565
Accretion of discount		381,900			89,625
Development costs incurred		537,056			748,837
Changes in estimated development costs		(490,827	)		(712,261	)
Revision of previous quantity estimates		(764,517	)		3,400,316
Net change in prices and production costs		(3,739,681	)		(714,887	)
Net change in income taxes		1,334,550			(1,022,960	)
Sales of oil and gas produced, net of production costs		263,069			111,112
Standardized measure of discounted future net cash flows at the end of the year	$	3,897		$	2,482,347