Discontinued Operations and Disposal Groups

12 Months Ended

Sep. 30, 2011

Discontinued Operations and Disposal Groups

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

NOTE 15 – DISCONTINUED OPERATIONS:

Timberline Drilling

In September 2011, the Company announced that it had entered into a non-binding letter of intent to sell its wholly owned Timberline Drilling subsidiary.  The results of operations for Timberline Drilling have been reported in discontinued operations for all periods presented.  Subsequent to September 30, 2011 the sale of Timberline Drilling was completed (see Note 17).

The following table details selected financial information for Timberline Drilling, Inc. included in income from discontinued operations in the consolidated statements of operations for the years ended September 30, 2011 and 2010:

		2011		2010
Revenues	$	30,908,082	$	20,733,337
Cost of revenues		(23,629,156)		(16,361,527)
Operating expenses		(2,557,565)		(2,545,256)
Interest income		183		1,337
Interest expense		(104,050)		(124,056)
Other income		3,444		6,103
Income from discontinued operations, net of tax	$	4,620,938	$	1,709,938

The consolidated balance sheet of the Company has assets and liabilities held for sale from Timberline Drilling which were comprised of the following items at September 30, 2011 and 2010:

		2011		2010
Cash and cash equivalents	$	2,812,053	$	-
Accounts receivable		2,016,998		-
Materials and supplies inventory		1,521,240		-
Prepaid expenses and other current assets		142,732		-
Total current assets held for sale	$	6,493,023	$	-
Property and equipment, net	$	5,931,544	$	-
Goodwill		2,808,524		-
Total non-current assets held for sale	$	8,740,068	$	-
Accounts payable	$	1,430,743	$	-
Accrued expenses		185,474		-
Accrued payroll, benefits and taxes		748,682		-
Current portion of long-term debt		285,895		-
Current portion of obligations under capital leases		126,203		-
Deferred revenue		78,970		-
Total current liabilities held for sale	$	2,855,967	$	-
Long-term debt, net of current portion	$	395,898	$	-
Obligations under capital leases, net of current portion		220,705		-
Total non-current liabilities held for sale	$	616,603	$	-

Cash flows from discontinued operations at Timberline Drilling included in the Company’s consolidated statements of cash flows for the years ending September 30, 2011 and 2010 are as follows:

		2011		2010
Cash flows from operating activities	$	3,370,909	$	2,832,913
Cash flows from investing activities		(820,268)		(523,398)
Cash flows from financing activities		(918,014)		(1,342,449)
Total cash flows from discontinued operations	$	1,632,627	$	967,066

World Wide Exploration

In September 2010, the Company ceased its drilling service operations in Mexico and moved all of the serviceable assets in Mexico to the United States for future use.  The results of operations for the Company’s Mexican subsidiary, World Wide Exploration, have been reported in discontinued operations for all periods presented. 

The following table details selected financial information for World Wide Exploration included in income from discontinued operations in the consolidated statements of operations for the years ended September 30, 2011 and 2010:

		2011		2010
Revenues	$	-	$	1,978,270
Cost of revenues		-		(2,850,142)
Operating expenses		(114,585)		(428,549)
Severance expense		-		(106,579)
Write-down of property and equipment held for sale		-		(132,993)
Write-down of inventory held for sale		-		(229,026)
Foreign exchange gain (loss)		-		142,654
Interest income		3		4,069
Interest expense		-		(1,265)
Other income		-		5,909
Loss from discontinued operations, net of tax	$	(114,582)	$	(1,617,652)

The consolidated balance sheet of the Company has assets held for sale from World Wide Exploration which were comprised of the following items at September 30, 2011 and 2010:

		2011		2010
Materials and supplies inventory	$	126,686	$	228,641
Prepaid expenses and other current assets		25,650		90,650
Total current assets held for sale	$	152,336	$	319,291

Cash flows from discontinued operations at World Wide Exploration included in the Company’s consolidated statements of cash flows for the years ending September 30, 2011 and 2010 are as follows:

		2011		2010
Cash flows from operating activities	$	(86,480)	$	(159,976)
Cash flows from investing activities		-		-
Cash flows from financing activities		-		(9,363)
Total cash flows from discontinued operations	$	(86,480)	$	(169,339)