Asset Retirement Obligations

3 Months Ended

Jun. 30, 2012

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligation Disclosure [Text Block]

NOTE 8 - ASSET RETIREMENT OBLIGATIONS

The Company has identified asset retirement obligations at the Girard, Kansas and Crosby, North Dakota operating sites.  These retirement obligations are determined based on the estimated cost to comply with abandonment regulations established by the Kansas Corporation Commission and the State of North Dakota.  The Company's engineers have estimated the cost, in today's dollars, to comply with these regulations.  These estimates have been projected out to the anticipated retirement date 12 to 18 years in the future, at an assumed inflation rate of 1.5 percent.  The anticipated future cost of remediation efforts in North Dakota, and Kansas, are $204,685, and $281,547, respectively.  These amounts were discounted back at an assumed interest rate of 10 percent, to arrive at a net present value of the obligation. The amount of the annual increase in the obligation is charged to "accretion expense" and for the nine months ended June 30, 2012 and 2011, respectively, was computed to be $12,781 and $11,620 respectively.

The following table summarizes the change in the asset retirement obligation for the nine months ended June 30, 2012 and the year ended September 31, 2011, respectively:

			June 30, 2012		September 30, 2011
Beginning balance		$	170,421	$	158,801
Liabilities incurred			-		-
Liabilities settled			-		-
Accretion expense			12,781		11,620
	TOTAL	$	183,202	$	170,421