Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2017 | Apr. 27, 2018 | Mar. 31, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | DEEP WELL OIL & GAS INC | ||
Entity Central Index Key | 869,495 | ||
Trading Symbol | DWOG | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --09-30 | ||
Document Type | 10-K | ||
Document Period End Date | Sep. 30, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 1.7 | ||
Entity Common Stock Shares Outstanding | 229,374,605 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2017 | Sep. 30, 2016 |
Current Assets | ||
Cash and cash equivalents | $ 1,097,651 | $ 1,400,922 |
Accounts receivable | 81,292 | 22,577 |
Prepaid expenses | 36,076 | 32,951 |
Total Current Assets | 1,215,019 | 1,456,450 |
Long-term investments | 407,025 | 384,247 |
Oil and gas properties, net, based on full cost method of accounting | 21,295,674 | 21,164,415 |
Property and equipment, net | 115,520 | 161,855 |
TOTAL ASSETS | 23,033,238 | 23,166,967 |
Current Liabilities | ||
Accounts payable and accrued liabilities | 156,218 | 47,506 |
Accounts payable and accrued liabilities - related parties | 9,934 | 2,469 |
Total Current Liabilities | 166,152 | 49,975 |
Asset retirement obligations (Note 10) | 493,411 | 452,533 |
TOTAL LIABILITIES | 659,563 | 502,508 |
(Commitments and contingencies Note 15) | ||
SHAREHOLDERS' EQUITY | ||
Common Stock: (Note 11) Authorized: 600,000,000 shares at $0.001 par value Issued and outstanding: 229,374,605 shares (September 30, 2016 - 229,374,605 shares) | 229,374 | 229,374 |
Additional paid in capital | 42,845,292 | 42,842,978 |
Accumulated deficit | (20,700,991) | (20,407,893) |
Total Shareholders' Equity | 22,373,675 | 22,664,459 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 23,033,238 | $ 23,166,967 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2017 | Sep. 30, 2016 |
Balance Sheets [Abstract] | ||
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares issued | 229,374,605 | 229,374,605 |
Common stock, shares outstanding | 229,374,605 | 229,374,605 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Statements of Operations and Comprehensive Income (Loss) [Abstract] | ||
Revenue | $ 151,432 | |
Royalty refunds (expenses) | 28,035 | |
Revenue, net of royalty | 179,467 | |
Expenses | ||
Operating expenses | 142,169 | 731,335 |
Operating expense covered by Farmout | (142,169) | (551,868) |
General and administrative | 222,252 | 488,607 |
Depreciation, accretion and depletion | 76,938 | 69,542 |
Net loss from operations | (299,190) | (558,149) |
Other income and expenses | ||
Rental and other income | 2,575 | 255 |
Interest income | 3,517 | 3,520 |
Net loss and comprehensive loss | $ (293,098) | $ (554,374) |
Net loss per common share | ||
Basic and Diluted | $ 0 | $ 0 |
Weighted Average Outstanding Shares (in thousands) | ||
Basic and Diluted | 229,374 | 229,374 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) | Total | Common Shares | Additional Paid in Capital | Accumulated Deficit |
Beginning balance at Sep. 30, 2015 | $ 22,980,862 | $ 229,374 | $ 42,605,007 | $ (19,853,519) |
Beginning balance, Shares at Sep. 30, 2015 | 229,374,605 | |||
Warrants Expired June 20, 2016 - 520,000 warrants (Note 11) | ||||
Options granted for services | 237,971 | 237,971 | ||
Net operating loss | (554,374) | (554,374) | ||
Ending balance at Sep. 30, 2016 | 22,664,459 | $ 229,374 | 42,842,978 | (20,407,893) |
Ending balance, Shares at Sep. 30, 2016 | 229,374,605 | |||
Warrants Expired November 23, 2016 - 52,155,221 warrants (Note 11) | ||||
Options granted for services | 2,314 | 2,314 | ||
Net operating loss | (293,098) | (293,098) | ||
Ending balance at Sep. 30, 2017 | $ 22,373,675 | $ 229,374 | $ 42,845,292 | $ (20,700,991) |
Ending balance, Shares at Sep. 30, 2017 | 229,374,605 |
Consolidated Statements of Sha6
Consolidated Statements of Shareholders' Equity (Parenthetical) - Warrant [Member] - shares | Nov. 23, 2016 | Jun. 20, 2016 |
Number of warrants expired unexercised | 52,155,221 | 520,000 |
Warrants expiration date | Nov. 23, 2016 | Jun. 20, 2016 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Operating Activities | ||
Net loss | $ (293,098) | $ (554,374) |
Items not affecting cash: | ||
Share-based compensation | 2,314 | 237,971 |
Depreciation, accretion and depletion | 76,938 | 69,542 |
Net changes in non-cash working capital (Note 13) | 54,337 | 57,053 |
Net Cash Used in Operating Activities | (159,509) | (189,808) |
Investing Activities | ||
Purchase of equipment | (2,552) | |
Investment in oil and gas properties | (144,383) | (198,412) |
Long-term investments | 3,173 | 2,872 |
Net Cash Used in Investing Activities | (143,762) | (195,540) |
Financing Activities | ||
Proceeds from issuance of common stock | ||
Net Cash Provided by Financing Activities | ||
Decrease in cash and cash equivalents | (303,271) | (385,348) |
Cash and cash equivalents, beginning of year | 1,400,922 | 1,786,270 |
Cash and cash equivalents, end of year | 1,097,651 | 1,400,922 |
Supplemental Cash Flow Information: | ||
Cash paid for interest | ||
Cash paid for income taxes |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 12 Months Ended |
Sep. 30, 2017 | |
Nature of Business and Basis of Presentation [Abstract] | |
NATURE OF BUSINESS AND BASIS OF PRESENTATION | 1. NATURE OF BUSINESS AND BASIS OF PRESENTATION Nature of Business Deep Well Oil & Gas, Inc. was originally incorporated on July 18, 1988 under the laws of the state of Nevada as Worldwide Stock Transfer, Inc. (Worldwide Stock Transfer, Inc. later changed its name to Allied Devices Corporation) and in connection with a plan of reorganization, effective on September 10, 2003, the company was reorganized and changed its name to Deep Well Oil & Gas, Inc. (“Deep Well”). Deep Well together with its subsidiaries, Northern Alberta Oil Ltd. and Deep Well Oil & Gas (Alberta) Ltd, (collectively referred to as the “Company”) is an independent junior oil sands exploration and development company with an existing oil sands land base in the Peace River oil sands area in Alberta, Canada. These consolidated financial statements have been prepared showing the name “Deep Well Oil & Gas, Inc. (and Subsidiaries)” (“the Company”) and the post-split common stock, with $0.001 par value. Basis of Presentation These consolidated financial statements are expressed in U.S. dollars and are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). These statements reflect all adjustments, consisting solely of normal recurring adjustments (unless otherwise disclosed) which, in the opinion of management, are necessary for a fair presentation of the information contained herein. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Consolidation These consolidated financial statements include the accounts of two wholly owned subsidiaries: (1) Northern Alberta Oil Ltd. (“Northern”) from the date of acquisition, being June 7, 2005, incorporated under the Business Corporations Act (Alberta), Canada; and (2) Deep Well Oil & Gas (Alberta) Ltd., incorporated under the Business Corporations Act (Alberta), Canada on September 15, 2005. All inter-company balances and transactions have been eliminated. Cash and Cash Equivalents The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. Allowance for Doubtful Accounts The Company determines allowances for doubtful accounts based on aging of specific accounts. Accounts receivable are stated at the historical carrying amounts net of allowances for doubtful accounts and include only the amounts the Company deems to be collectable. The allowance for bad debts was $nil and $nil at September 30, 2017 and September 30, 2016, respectively. Crude oil and natural gas properties The Company follows the full cost method of accounting for oil sands properties pursuant to SEC Regulation S-X Rule 4-10. The full cost method of accounting for oil and gas operations requires that all costs associated with the exploration for and development of oil and gas reserves be capitalized on a country by country basis. Such costs include lease acquisition costs, geological and geophysical expenses, carrying charges on non-producing properties, costs of drilling both productive and non-productive wells, production equipment and overhead charges directly related to acquisition, exploration and development activities. Under the full cost method, oil and gas properties are subject to the ceiling test performed quarterly. A ceiling test write-down is recognized in net earnings if the carrying amount of a cost centre exceeds the "cost centre ceiling". The carrying amount of the cost centre includes the capitalized costs of proved oil and natural gas properties, net of accumulated depletion and deferred income taxes. The cost centre ceiling is the sum of (A) present value of the estimated future net cash flows from proved oil and natural gas reserves using a 10 percent per year discount factor, (B) the costs of unproved properties not being amortized, and (C) the lower of cost or fair value of unproved properties included in the costs being amortized; less (D) related income tax effects. During the 2017 fiscal year, no ceiling test write-downs were recorded for our oil and gas properties. Costs associated with unproved properties are excluded from the depletion calculation until it is determined that proved reserves are attributable or impairment has occurred. Unproved properties are assessed annually for impairment. Costs that have been impaired are included in the costs subject to depletion within the full cost pool. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation expense is computed using the declining balance method over the estimated useful life of the asset. Only half of the depreciation rate is taken in the year of acquisition. The following is a summary of the depreciation rates used in computing depreciation expense: % Software 100 Computer equipment 55 Portable work camp 30 Vehicles 30 Road Mats 30 Wellhead 25 Office furniture and equipment 20 Oilfield Equipment 20 Tanks 10 Expenditures for major repairs and renewals that extend the useful life of the asset are capitalized. Minor repair expenditures are charged to expense as incurred. Leasehold improvements are amortized over the greater of five years or the remaining life of the lease agreement. Depreciation, Depletion and Amortization - Costs of acquiring and evaluating unproved properties and major development projects are initially excluded from the depletion and depreciation calculation until it is determined whether or not proved reserves can be assigned to such properties. Costs of unproved properties and major development projects are transferred to depletable costs based on the percentage of reserves assigned to each project over the expected total reserves when the project was initiated. These costs are assessed periodically to ascertain whether impairment has occurred. Asset Retirement Obligations The Company accounts for asset retirement obligations by recording the fair value of the estimated future cost of the Company’s plugging and abandonment obligations. The asset retirement obligation is recorded when there is a legal obligation associated with the retirement of a tangible long-lived asset and the fair value of the liability can reasonably be estimated. Upon initial recognition of an asset retirement obligation, the Company increases the carrying amount of the long-lived asset by the same amount as the liability. Over time, the liabilities are accreted for the change in their present value through charges to oil and gas production and well operations costs. The initial capitalized costs are depleted over the useful lives of the related assets through charges to depreciation, depletion, and amortization. If the fair value of the estimated asset retirement obligation changes, an adjustment is recorded to both the asset retirement obligation and the asset retirement cost. Revisions in estimated liabilities can result from revisions of estimated inflation rates, escalating retirement costs, and changes in the estimated timing of settling asset retirement obligations. As of September 30, 2017, and 2016, asset retirement obligations amount to $493,411 and $452,533, respectively. The Company has posted bonds, where required, with the Government of Alberta based on the amount the government estimates the cost of abandonment and reclamation to be. Foreign Currency Translation The functional currency of the Canadian subsidiaries is the United States dollar. However, the Canadian subsidiaries transact in Canadian dollars. Consequently, monetary assets and liabilities are remeasured into United States dollars at the exchange rate on the balance sheet date and non-monetary items are remeasured at the rate of exchange in effect when the assets are acquired or obligations incurred. Revenues and expenses are remeasured at the average exchange rate prevailing during the period. Foreign currency transaction gains and losses are included in results of operations. Accounting Method The Company recognizes income and expenses based on the accrual method of accounting. Dividend Policy The Company has not yet adopted a policy regarding payment of dividends. Financial, Concentration and Credit Risk The Company’s consideration or related financial credit risk related to cash and cash equivalents depends on if funds are fully insured by either The Canada Deposit Insurance Corporation (“CDIC”), or The Credit Union Deposit Guarantee Corporation (“CUDGC”) deposit insurance limit. As of the 2017 fiscal year end the Company has approximately $41,244 funds that are in excess of deposit insurance limits, which may have financial credit risk. For the Company funds that are maintained in a financial institution which has its deposits fully guaranteed by CUDGC, there is no financial credit risk. The Company is not directly subject to credit risk resulting from the concentration of its crude oil sales. For the year ended September 30, 2017, the Company recorded no oil sales, however for the year ended September 30, 2016, the Company had recorded oil sales received from the operator of the Company’s producing properties. The Company’s joint venture partner is the operator of the Company’s producing properties and it is the Company’s joint venture partner who sells all of the Company’s oil production to 11 purchasers in the oil and gas industry. The Company does not require collateral and management periodically evaluates the operator’s financial statements and the collectability of oil sales receivables from the operator and believes that the Company’s oil sales receivables are fully collectable and that the risk of loss is minimal. Income Taxes The Company utilizes the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax bases of the assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. An allowance against deferred tax assets is recorded when it is more likely than not that such tax benefits will not be realized. Due to the uncertainty regarding the Company’s profitability, a valuation allowance has been recorded against the future tax benefits of its losses and no net benefit has been recorded in the consolidated financial statements. Revenue Recognition The Company is in the business of exploring for, developing, producing, and selling crude oil. Crude oil revenue is recognized when the product is taken from the storage tanks on the lease and delivered to the purchaser and title transfers to the purchaser. Payment is generally received one to three months after the sale has occurred. Occasionally the Company may sell specific leases, and the gain or loss associated with these transactions will be shown separately from the profit or loss from the operations or sales of oil products. Such gain or losses will be measured and recognized when all of the following have occurred: (1) there is persuasive evidence of an arrangement to sell; (2) the price of the sale is fixed or determinable; (3) the title to the lease has transferred; and (4) collection is reasonably assured. Advertising and Market Development The Company expenses advertising and market development costs as incurred. Basic and Diluted Net Loss Per Share Basic net loss per share amounts are computed based on the weighted average number of shares actually outstanding. Diluted net loss per share amounts are computed using the weighted average number of common shares and common equivalent shares outstanding as if shares had been issued on the exercise of the common share rights, unless the exercise becomes antidilutive and then the basic and diluted per share amounts are the same. There were 11,530,000 potentially dilutive securities excluded from the the diluted earnings per share calculation because their effect would be antidilutive. Financial Instruments Financial instruments include cash and cash equivalents, accounts receivable, long-term investments, investment in equity securities, accounts payable and accounts payable - related parties. The fair value of these financial instruments approximates their carrying value because of the short-term maturity of these items unless otherwise noted. The fair value of the investment in equity securities cannot be determined as the market value is not readily obtainable. The equity securities are reported using the cost method. Environmental Requirements At the report date, environmental requirements related to the oil properties acquired are unknown and therefore an estimate of any future cost cannot be made. Share-Based Compensation The Company accounts for stock options granted to directors, officers, employees and non-employees using the fair value method of accounting. The fair value of stock options for directors, officers, employees and their corporate entities are calculated at the date of grant and are expensed over the vesting period of the options on a straight-line basis. For non-employees, the fair value of the options is measured on the earlier of the date at which the counterparty performance is complete or the date at which the performance commitment is reached. The Company uses the Black-Scholes model to calculate the fair value of stock options issued, which requires certain assumptions to be made at the time the options are awarded, including the expected life of the option, the expected number of granted options that will vest and the expected future volatility of the stock. The Company reflects estimates of award forfeitures at the time of grant and revises in subsequent periods, if necessary, when forfeiture rates are expected to change. Recently Adopted Accounting Standards In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” requiring lessees to recognize lease assets and lease liabilities for most leases classified as operating leases under previous U.S. GAAP. The guidance is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company will be required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. Estimates and Assumptions Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used in preparing these consolidated financial statements. Significant estimates by management include valuations of oil properties, valuation of accounts receivable, useful lives of long-lived assets, asset retirement obligations, valuation of share-based compensation, and the realizability of future income taxes. |
Oil and Gas Properties
Oil and Gas Properties | 12 Months Ended |
Sep. 30, 2017 | |
Oil and Gas Properties [Abstract] | |
OIL AND GAS PROPERTIES | 3. OIL AND GAS PROPERTIES The Company’s oil sands acreage as of September 30, 2017, covers 43,015 gross acres (34,096 net acres) on 68 sections of land under nine oil sands leases. Until the Company extends the leases “into perpetuity” based on the Alberta governmental regulations, the lease expiration dates of the Company’s nine oil sands leases are as follows: (i) 32 sections of land under 5 oil sands leases are set to expire on July 10, 2018. Of the 5 oil sands leases it is the Company’s opinion that the Company has already met the governmental requirements on 17 of the 32 sections to continue these sections into perpetuity. These 17 sections contain the majority of the resources identified to date on these 5 oil sands leases. The Company has completed or is in the process of applying for continuation of these leases or parts of the leases where the majority of the oil sands resources have been confirmed. Currently, 11 out of the 17 sections that contain the majority of the resources identified to date have been granted continuance under the Alberta governmental tenure guidelines; (ii) 31 sections of land under 3 oil sands leases are set to expire on August 19, 2019; and (iii) 5 sections of land under 1 oil sands lease are set expire on April 9, 2024. It is the Company’s opinion that the Company has already met the governmental requirements for this lease and it will be applying to continue all 5 sections of this lease into perpetuity. Lease Rental Commitments The Company has acquired interests in certain oil sands properties located in North Central Alberta, Canada. The lease terms include certain commitments related to oil sands properties that require the payments of yearly rents. As required by the Oil Sands Tenure Regulation of the Mines and Minerals Act of Alberta continued oil sands leases past their expiry dates are subject to escalating rental payments in respect of each term year of a continued lease that is designated as non-producing less any eligible research costs, exploration costs and development costs that are incurred in the term year of a continued lease. Escalating rent is payable at the end of each term year, while annual rent for leases are due at the beginning of each term year. Lessees of continued oil sands leases may reduce or eliminate their escalating rent obligations by conducting exploration or development work, or research, on the non-producing lease. As of September 30, 2017, excluding any eligible research, exploration and or development costs that may be used to reduce the Company’s yearly escalating future rents, the following table sets out the estimated net payments due under this commitment, which could be as high as: (USD $) (Cdn $) 2018 $ 33,346 $ 41,615 2019 $ 21,653 $ 27,022 2020 $ 21,653 $ 27,022 2021 $ 20,576 $ 25,678 2022 $ 27,836 $ 34,738 Subsequent $ 156,774 $ 195,650 The government of Alberta owns this land and the Company has acquired the rights to perform oil activities on these lands. If the Company meets the conditions of the leases the Company will then be permitted to drill on and produce oil from the land into perpetuity. These conditions give the Company until the expiration of the leases to meet the following requirements on its oil sands leases: 1) The original requirement was to drill evaluation wells on each section within the lease, however the Alberta Department of Energy has temporarily relaxed the drilling requirements under section 3(2)(a) of the Oil Sands Tenure Regulation of the Mines and Minerals Act of Alberta. Under the relaxed rules the Company would now have to drill 26 wells throughout the 68 sections to preserve all 2) drill evaluation wells on at least 60% of the sections within the lease of which 25% of the evaluation wells must be cored, and acquire and process two miles of seismic data for the remaining undrilled sections within the lease. The Company follows the full cost method of accounting for costs of oil properties. Under this method, oil and gas properties, for which no proved reserves have been assigned, must be assessed at least annually to ascertain whether or not a write down should occur. Unproven properties are assessed annually, or more frequently as economic events indicate, for potential write down. This consists of comparing the carrying value of the asset with the asset’s expected future undiscounted cash flows without interest costs. Estimates of expected future cash flows represent management’s best estimate based on reasonable and supportable assumptions. Proven oil properties are reviewed for any write down on a field-by-field basis. No write downs were recognized for the year ended September 30, 2017. Capitalized costs of proven oil properties will be depleted using the unit-of-production method when the property is placed in production. Substantially all of the Company’s oil activities are conducted jointly with others. The accounts reflect only the Company’s proportionate interest in such activities. Farmout Agreement On July 31, 2013, the Company entered into a Farmout agreement (the “Farmout Agreement”) with an additional joint venture partner (the “Farmee”) to fund the Company’s share of the Alberta Energy Regulator (“AER”) approved joint Steam Assisted Gravity Drainage Demonstration project (“SAGD Project”) at the Company’s Sawn Lake heavy oil reservoir in North Central Alberta, Canada. In accordance with the Farmout Agreement the Farmee has agreed to provide up to $40,000,000 in funding for the Company’s portion of the costs for the SAGD Project, in return for a net 25% working interest in 12 sections where the Company had a working interest of 50% (before the execution of the Farmout Agreement). The Farmee will also provide funding to cover monthly operating expenses of the Company, of which the first such monthly payment began in respect of the month of August 2013 and shall not to exceed $30,000 per month. |
Capitalization of Costs Incurre
Capitalization of Costs Incurred in Oil and Gas Activities | 12 Months Ended |
Sep. 30, 2017 | |
Capitalization of Costs Incurred in Oil and Gas Activities [Abstract] | |
CAPITALIZATION OF COSTS INCURRED IN OIL AND GAS ACTIVITIES | 4. CAPITALIZATION OF COSTS INCURRED IN OIL AND GAS ACTIVITIES The following table illustrates capitalized costs relating to oil producing activities as of September 30, 2017 and September 30, 2016: September 30, September 30, Unproved Oil and Gas Properties $ 21,380,452 $ 21,238,052 Proved Oil and Gas Properties – – Accumulated Depreciation and Depletion (84,778 ) (73,637 ) Net Capitalized Cost $ 21,295,674 $ 21,164,415 Depreciation and depletion expenses for the years ended September 30, 2017 and 2016 were $11,141 and $11,274 respectively. |
Exploration Activities
Exploration Activities | 12 Months Ended |
Sep. 30, 2017 | |
Exploration Activities [Abstract] | |
EXPLORATION ACTIVITIES | 5. EXPLORATION ACTIVITIES The following table presents information regarding the Company’s costs incurred in the oil property acquisition, exploration and development activities for the years ended September 30, 2017 and September 30, 2016: September 30, September 30, Acquisition of Properties: Proved $ – $ – Unproved 142,400 194,037 Exploration costs – 39,658 Development costs – – |
Investment in Equity Securities
Investment in Equity Securities | 12 Months Ended |
Sep. 30, 2017 | |
Investment in Equity Securities [Abstract] | |
INVESTMENT IN EQUITY SECURITIES | 6. INVESTMENT IN EQUITY SECURITIES On February 25, 2005, the Company acquired an interest in Signet Energy Inc. (“Signet” formerly Surge Global Energy, Inc.) as a result of a Farmout Agreement dated February 25, 2005. Signet amalgamated with Andora Energy Corporation (“Andora”) in 2007. As of November 19, 2008, the Company converted its Signet shares into 2,241,558 shares of Andora, which presently represents an equity interest in Andora of approximately 2.24% as of December 31, 2016, which is Andora’s fiscal year end. These shares are carried at a nominal value using the cost method and their value is included under oil and gas properties on the Company’s balance sheet. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Sep. 30, 2017 | |
Property and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 7. PROPERTY AND EQUIPMENT September 30, 2017 Accumulated Net Book Cost Depreciation Value Computer equipment $ 34,750 $ 32,899 $ 1,851 Office furniture and equipment 34,130 30,529 3,601 Software 5,826 5,826 – Leasehold improvements 4,936 4,936 – Portable work camp 170,580 162,305 8,275 Vehicles 38,077 38,077 – Oilfield equipment 249,045 204,917 44,128 Road mats 364,614 346,748 17,866 Wellhead 3,254 2,747 507 Tanks 96,085 56,793 39,292 $ 1,001,297 $ 885,777 $ 115,520 September 30, 2016 Accumulated Net Book Cost Depreciation Value Computer equipment $ 32,198 $ 32,093 $ 105 Office furniture and equipment 34,130 29,629 4,501 Software 5,826 5,826 – Leasehold improvements 4,936 4,936 – Portable work camp 170,580 158,758 11,822 Vehicles 38,077 35,412 2,665 Oilfield equipment 249,045 176,141 72,904 Road mats 364,614 339,091 25,523 Wellhead 3,254 2,578 676 Tanks 96,085 52,426 43,659 $ 998,745 $ 836,890 $ 161,855 There was $48,887 of depreciation expense for the year ended September 30, 2017 (September 30, 2016 - $42,115). |
Long-Term Investments
Long-Term Investments | 12 Months Ended |
Sep. 30, 2017 | |
Long-Term Investments [Abstract] | |
LONG-TERM INVESTMENTS | 8. LONG-TERM INVESTMENTS Long-term investments consist of cash held in trust by the AER which bears interest at a rate of prime minus 0.375% and has no stated date of maturity. These investments are required by the AER to ensure there are sufficient future cash flows to meet the expected future asset retirement obligations and are restricted for this purpose. |
Significant Transactions with R
Significant Transactions with Related Parties | 12 Months Ended |
Sep. 30, 2017 | |
Significant Transactions with Related Parties [Abstract] | |
SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES | 9. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES Accounts payable – related parties was $9,934 as of September 30, 2017 (September 30, 2016 - $2,469) for expenses to be reimbursed to directors. This amount is unsecured, non-interest bearing, and has no fixed terms of repayment. As of September 30, 2017, officers, directors, their families, and their controlled entities have acquired 53.63% of the Company’s outstanding common capital stock. This percentage does not include unexercised warrants or stock options. The Company incurred expenses $136,980 to one related party, Concorde Consulting, an entity controlled by a director, for professional fees and consulting services provided to the Company during the year ended September 30, 2017 (September 30, 2016 - $135,828). These amounts were fully paid as of September 30, 2017. |
Asset Retirement Obligations
Asset Retirement Obligations | 12 Months Ended |
Sep. 30, 2017 | |
Asset Retirement Obligations [Abstract] | |
ASSET RETIREMENT OBLIGATIONS | 10. ASSET RETIREMENT OBLIGATIONS The total future asset retirement obligation is estimated by management based on the Company’s net working interests in all wells and facilities, estimated costs as determined by the Alberta Energy Regulator to reclaim and abandon wells and facilities and the estimated timing of the costs to be incurred in future periods. At September 30, 2017, the Company estimates the undiscounted cash flows related to asset retirement obligation to total approximately $647,631 (September 30, 2016 - $616,191). The fair value of the liability at September 30, 2017 is estimated to be $493,411 (September 30, 2016 - $452,533) using a risk free rate of 3.74% and an inflation rate of 2%. The actual costs to settle the obligation are expected to occur in approximately 26 years. Changes to the asset retirement obligation were as follows: September 30, September 30, Balance, beginning of period $ 452,533 $ 426,607 Liabilities incurred – Effect of foreign exchange 23,969 9,771 Disposal – Accretion expense 16,909 16,155 Balance, end of period $ 493,411 $ 452,533 |
Common Stock
Common Stock | 12 Months Ended |
Sep. 30, 2017 | |
Common Stock [Abstract] | |
COMMON STOCK | 11. COMMON STOCK As of September 30, 2017, the Company had outstanding 229,374,605 shares of common stock. Warrants On October 3, 2014, a warrant holder of the Company acquired 47,618 shares of the Company’s common stock, upon exercising warrants, at an exercise price of $0.105 per share of common stock for gross proceeds to the Company of $5,000. On July 28, 2015, the Company’s Board approved the extension of the expiration date of some warrants to purchase shares of the Company’s common stock. The exercise price of the warrants remained unchanged at $0.105 per share. As a result of this extension, the expiration dates of the warrants were amended from the original expiry date of November 23, 2015 to November 23, 2016, with all other terms of the original warrants remaining in full force and effect. In consideration of extending the expiry date of this series of warrants, the number of outstanding warrants was reduced from 71,857,141 to 52,155,221 common share purchase warrants. On June 20, 2016, warrants to acquire up to 520,000 common shares of the Company, expired unexercised. On November 23, 2016, warrants to acquire up to 52,155,221 common shares of the Company, expired unexercised. As of September 30, 2017, the Company had no outstanding warrants. The following is a summary of warrant activity for the year ended September 30, 2017: Number of Warrants Weighted Average Exercise Price Intrinsic Value Balance, September 30, 2016 52,155,221 $ 0.105 $ – Expired at November 23, 2016 (52,155,221 ) 0.105 – Balance, September 30, 2017 – $ – $ – Outstanding Warrants, September 30, 2017 – $ – $ – There were no warrants outstanding as of September 30, 2017 (September 30, 2016 – there were 52,155,221 warrants outstanding, which had a historical fair market value of $3,153,216). Measurement Uncertainty for Warrants The Company used the Black-Scholes pricing model (“Black-Scholes”) to value the warrants. This pricing model was developed for use in estimating the fair value of traded “European” options. The private placement warrants issued by the Company are transferable and have no vesting restrictions and can be exercised at any time up to their expiration date and are “American” options. This pricing model requires the input of subjective assumptions including expected share price volatility. The fair value estimate can vary materially as a result of changes in the assumptions, and therefore can materially affect the calculated fair value of the warrants. The following assumptions were used in the Black-Scholes pricing model to value the warrants: Expected Term – Expected term of 1.33 years, represents the period that the warrants were expected to be outstanding. Expected Volatility – Expected volatilities are based on historical volatility of the Company’s stock, adjusted where determined by management for unusual and non-representative stock price activity not expected to recur. The expected volatility used was 111%. Expected Dividend – The Black-Scholes valuation model calls for a single expected dividend yield as an input. The Company currently pays no dividends and does not expect to pay dividends in the foreseeable future. Risk-Free Interest rate – The Company bases the risk-free interest rate on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term. The risk-free rate used was 0.67% |
Stock Options
Stock Options | 12 Months Ended |
Sep. 30, 2017 | |
Stock Options [Abstract] | |
STOCK OPTIONS | 12. STOCK OPTIONS On November 28, 2005, and as amended on December 4, 2013, the Board of Deep Well adopted the Deep Well Oil & Gas, Inc. Stock Option Plan (the “Plan’). The Plan was approved by the majority of shareholders at the February 24, 2010 general meeting of shareholders. The Plan, is administered by the Board, permits options to acquire shares of the Company’s common stock (the “Common Shares”) to be granted to directors, senior officers and employees of the Company and its subsidiaries, as well as certain consultants and other persons providing services to the Company or its subsidiaries. The maximum number of shares, which may be reserved for issuance under the Plan, may not exceed 10% of the Company’s issued and outstanding Common Shares, subject to adjustment as contemplated by the Plan. The aggregate number of Common Shares with respect to which options may be vested to any one person (together with their associates) under the plan, together with all other incentive plans of the Company in any one year shall not exceed 2% of the total number of Common Shares outstanding, and in total may not exceed 6% of the total number of Common Shares outstanding. On November 17, 2014, the Company appointed a new director to its Board and in connection with the appointment the Company granted the new director an option to purchase 600,000 shares each of common stock at an exercise price of $0.23 per Common Share, 200,000 vesting immediately and the remaining vesting one-third on November 17, 2015, and one-third on November 17, 2016, with a five-year life. On March 23, 2016, 900,000 stock options previously granted on March 23, 2011 to two directors, expired unexercised. For the year ended September 30, 2017, the Company recorded share-based compensation expense related to stock options in the amount of $2,314 (September 30, 2016 – $237,971) on the stock options that were previously granted. As of September 30, 2017, there was no remaining unrecognized compensation cost of related to option awards. Compensation expense is based upon straight-line depreciation of the grant-date fair value over the vesting period of the underlying unit option. Shares Underlying Shares Underlying Range of Exercise Prices Shares Underlying Options Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Shares Underlying Options Exercisable Weighted Average Exercise Price $0.05 at September 30, 2017 3,450,000 0.72 0.05 3,450,000 – $0.30 at September 30, 2017 250,000 1.08 0.30 250,000 – $0.34 at September 30, 2017 450,000 1.18 0.34 450,000 – $0.38 at September 30, 2017 6,780,000 1.97 0.38 6,780,000 – $0.23 at September 30, 2017 600,000 2.13 0.23 600,000 – 11,530,000 1.55 $ 0.27 11,530,000 $ – The aggregate intrinsic value of exercisable options as of September 30, 2017, was $Nil (September 30, 2016 - $Nil). The following is a summary of stock option activity as at September 30, 2017: Number of Underlying Shares Weighted Average Exercise Price Weighted Average Fair Market Value Balance, September 30, 2016 11,530,000 $ 0.27 $ 0.22 Balance, September 30, 2017 11,530,000 $ 0.27 $ 0.22 Exercisable, September 30, 2017 11,530,000 $ 0.27 $ 0.22 A summary of the options granted at September 30, 2017 and 2016 and changes during the periods then ended is presented below: September 30, 2017 September 30, 2016 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding balance at beginning of period 11,530,000 $ 0.27 12,430,000 $ 0.26 Vested - November 17, 2015 200,000 0.23 Vested - December 4, 2015 150,000 0.34 Vested - September 19, 2016 1,460,000 0.38 Expired - March 23, 2016 (900,000 ) 0.14 Vested - November 17, 2016 200,000 0.23 Outstanding at end of period 11,530,000 $ 0.27 11,530,000 $ 0.27 Exercisable 11,530,000 $ 0.27 11,330,000 $ 0.27 There were no remaining unvested stock options outstanding as of September 30, 2017 (September 30, 2016 – 200,000). Measurement Uncertainty for Stock Options The Company used the Black-Scholes pricing model (“Black-Scholes”) to value the stock options. This pricing model was developed for use in estimating the fair value of traded “European” options. The stock options that are granted to employees, directors and consultants are non-transferable and some vest over time, and are “American” options. This pricing model requires the input of subjective assumptions including expected share price volatility. The fair value estimate can vary materially as a result of changes in the assumptions, and therefore can materially affect the calculated fair value of the stock options. The following assumptions were used in the Black-Scholes pricing model to value the stock options: Expected Term – Expected term of 5 years represents the period that the Company’s stock-based awards are expected to be outstanding. Expected Volatility – Expected volatilities are based on historical volatility of the Company’s stock, adjusted where determined by management for unusual and non-representative stock price activity not expected to recur. The expected volatility used ranged from 102% to 122%. Expected Dividend – The Black-Scholes valuation model calls for a single expected dividend yield as an input. The Company currently pays no dividends and does not expect to pay dividends in the foreseeable future. Risk-Free Interest rate – The Company bases the risk-free interest rate on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term. The risk-free rate used ranged from 1.31% to 2.07%. |
Changes in Non-Cash Working Cap
Changes in Non-Cash Working Capital | 12 Months Ended |
Sep. 30, 2017 | |
Changes in Non-Cash Working Capital [Abstract] | |
CHANGES IN NON-CASH WORKING CAPITAL | 13. CHANGES IN NON-CASH WORKING CAPITAL September 30, September 30, 2017 2016 Accounts receivable $ (58,715 ) $ 279,255 Prepaid expenses (3,125 ) 4,747 Accounts payable and accounts payable and accrued liabilities -related party 116,177 (226,949 ) $ 54,337 $ 57,053 |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2017 | |
Income Taxes [Abstract] | |
INCOME TAXES | 14. INCOME TAXES As of September 30, 2017, the Company has approximately $6,311,751 (2016 – $6,184,515) of operating losses expiring through 2037 that may be used to offset future taxable income but are subject to various limitations imposed by rules and regulations of the Internal Revenue Service. The net operating losses are limited each year to offset future taxable income, if any, due to the change of ownership in the Company's outstanding shares of common stock. In addition, at September 30, 2017, the Company had an unused Canadian net operating loss carry-forward of approximately $7,864,432 (2016 – $7,691,984), expiring through 2037. These operating loss carry-forwards may result in future income tax benefits of approximately $3,448,864. However, because realization is uncertain at this time, a valuation reserve in the same amount has been established. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of the net deferred tax asset, the statutory tax rate, the effective rate and the elected amount of the valuation allowance are as follows: Year Ended Year Ended Statutory and effective tax rate Domestic Statutory U.S. federal rate 21 % 35 % Foreign 27 % 27 % Year Ended Year Ended Income taxes recovered at the statutory and effective tax rate Domestic Statutory U.S. federal rate $ 24,570 $ 123,447 Foreign 47,547 54,451 Timing differences: Non-deductible expenses (14,266 ) (127,363 ) Other deductible charges – – Benefit of tax losses not recognized in the year (57,851 ) (50,535 ) Income tax recovery (expense) recognized in the year $ – $ – The approximate tax effects of each type of temporary difference that gives rise to deferred tax assets are as follows: Year Ended September 30, Year Ended September 30, Deferred income tax assets (liabilities) Net operating loss carry-forwards $ 3,448,864 $ 4,241,416 Oil and gas properties (173,294 ) (2,056,543 ) Equipment 200,186 187,150 Valuation allowance (3,475,756 ) (2,372,023 ) Net deferred income tax assets $ – $ – In accordance with generally accepted accounting principles, the Company has analyzed its filing positions in all jurisdictions where it is required to file income tax returns for the open tax years in such jurisdictions. The Company has identified its federal income tax returns for the previous five years remain subject to examination. The Company’s income tax returns in state income tax jurisdictions also remain subject to examination for the previous five years. The Company currently believes that all significant filing positions are highly certain and that all of its significant income tax filing positions and deductions would be sustained upon audit. Therefore, the Company has no significant reserves for uncertain tax positions, and no adjustments to such reserves were required by generally accepted accounting principles. No interest or penalties have been levied against the Company and none are anticipated, therefore no interest or penalty has been included in the provision for income taxes in the consolidated statements of operations. |
Commitments
Commitments | 12 Months Ended |
Sep. 30, 2017 | |
Commitments [Abstract] | |
COMMITMENTS | 15. COMMITMENTS Compensation to Executive Officers Concorde Consulting, a company owned 100% by Mr. Curtis J. Sparrow, for providing services as Chief Financial Officer to the Company for $12,020 per month (Cdn $15,000 per month). As of September 30, 2017, the Company did not owe Concorde Consulting any of this amount. Rental Agreement On July 27, 2015, the Company renewed its Edmonton office lease commencing effective on July 1, 2015 and expiring on June 30, 2017. On June 19, 2017, the Company renewed its Edmonton office lease commencing effective on July 1, 2017 and expiring effective June 30, 2019. As part of the lease renewal the Company received the first 3 months of basic rent free. The quarterly payments due are as follows: USD $ Cdn $ 2018 Q1 (October - December) $ 6,385 $ 7,969 2018 Q2 (January - March) $ 6,385 $ 7,969 2018 Q3 (April - June) $ 6,385 $ 7,969 2018 Q4 (July - September) $ 6,385 $ 7,969 2019 Q1 (October - December) $ 6,385 $ 7,969 2019 Q2 (January - March) $ 6,385 $ 7,969 2019 Q3 (April - June) $ 6,385 $ 7,969 |
Crude Oil and Natural Gas Prope
Crude Oil and Natural Gas Property Information (Unaudited) | 12 Months Ended |
Sep. 30, 2017 | |
Crude Oil and Natural Gas Property Information (Unaudited) [Abstract] | |
CRUDE OIL AND NATURAL GAS PROPERTY INFORMATION (Unaudited) | 16. CRUDE OIL AND NATURAL GAS PROPERTY INFORMATION (Unaudited) Results of Operations from Oil and Gas Producing Activities The following table sets forth the results of the Company’s operations from oil producing activities from the Company’s Sawn Lake oil sands properties located in Alberta, Canada, for the years ending September 30, 2017 and 2016: September 30, September 30, 2016 Oil sales after royalties $ – $ 179,467 Production (Operating) expenses – (179,467 ) Depreciation, accretion and depletion (75,232 ) (68,066 ) Oil sales less expenses (75,232 ) (68,066 ) Income tax expenses – – Results of operations from producing activities $ (75,232 ) $ (68,066 ) There was no production volumes or revenues for the fiscal year ending September 30, 2017, due to a majority of the Company’s Joint Venture partners voting to temporarily suspend operations of the SAGD Project at the end of February 2016. For the year ended September 30, 2016, the Company booked oil revenue in the amount of $179,467, after royalties. For the year ended September 30, 2016, the volumes of oil delivered were booked to be 19,156 barrels net to the Company, before royalties, with an average oil sales price of $7.91 per barrel. Operating expenses are zero since at this time they were paid for under the Farmout Agreement. Transportation costs are included in these operating costs. The total share of the material costs and operating expenses of the Company’s joint Steam Assisted Gravity Drainage Demonstration project (“SAGD Project”), has been funded in accordance with the Farmout Agreement, at a net cost to the Company of $Nil. As required by the Farmout Agreement, the Farmee has since reimbursed the Company and or paid the operator in total approximately $21.2 million (Cdn $26.5 million) for the SAGD Project for the Farmee’s share and the Company’s share of the capital costs and operating expenses of the SAGD Project up to September 30, 2017. These costs include the drilling and completion of one SAGD well pair; the purchase and transportation of equipment of which included the once through steam generator (“OTSG”), production tanks, water treatment plant, and power generators; installation and construction of the steam plant facility; testing and commissioning; the purchase of the water source and disposal wells and expenditures to connect these water wells with pipelines to the steam plant facility along with a fuel source tie-in pipeline; equipment for processing and treating the bitumen production at the SAGD facility site; and the monthly operating expenses associated with the steaming and production of the SAGD well pair up to September 30, 2017. The capital costs to complete the SAGD Project steam plant facility with one SAGD well pair was approximately $26.5 million (Cdn $34.8 million) on a 100% working interest basis, of which the Company’s share was covered under the Farmout Agreement (these capital costs do not include the start-up operating expenses to initiate oil production from the SAGD well pair). SAGD Project Outlook - ● confirmed that the SAGD process works in the Bluesky formation at Sawn Lake; ● established characteristics of ramp up through stabilization of SAGD performance; ● indicated the productive capability and steam-oil ratio (“SOR’), of the reservoir; and ● provided critical information required for well and facility design associated with future commercial development. The SAGD Project reached a steady state production level in January and February of 2016 with an average of 615 barrels of oil per day (“bopd”), on a 100% basis (154 bopd net to the Company), with an average SOR of 2.1 from one SAGD well pair. It is expected that a reactivation of the existing SAGD Project facility and current SAGD well pair will be part of the potential commercial expansion along with the previously AER approved second SAGD well pair. In early May of 2016, an amended application was submitted to the AER for an expansion of the existing SAGD Project facility site which would potentially increase the operation for up to a total of eight SAGD well pairs. The amended application sought approval to expand the current SAGD Project facility site to 3,200 bopd (100% basis). It is anticipated that only five SAGD well pairs need to be operating to achieve this production level. The expanded facility will be designed to handle up to 3,200 bopd. Capitalized Costs Relating Specifically to the SAGD Project The Company entered into a Farmout Agreement dated July 31, 2013, whereby the Company’s operating costs of the SAGD Project are paid in full by the Farmee in accordance with the Farmout Agreement; therefore the Company has not capitalized any of the capital costs and operating expenses paid by the Farmee to the operator of the SAGD Project. See Note 4 herein “Capitalization of Costs Incurred in Oil and Gas Activities”. Costs Incurred in Oil and Gas Property Acquisition, Exploration, and Development See Note 5 herein “Exploration Activities”. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 17. SUBSEQUENT EVENTS On November 21, 2017, the Company’s joint venture partner and operator of two jointly held oil sands leases, where the Company has working interests, submitted two continuation applications to the Alberta Oil Sands Tenure division to apply to continue two oil sands leases that were set to expire on July 10, 2018. On January 29, 2018, the Company’s joint venture partner received approval from Alberta Energy, under the Alberta Oil Sands Tenure Regulation, to continue 2,816 gross hectares (704 hectares net to the Company) of lands, with a non-producing status, effective July 10, 2018. These two continued leases have no future expiry dates but are subject to yearly escalating rental payments until they are deemed to be producing leases. On December 15, 2017, the Alberta Energy Regulator (“AER”) approved the previously submitted expansion application of the Company’s joint SAGD Project. The amended application sought approval to expand the existing SAGD Project facility site to 3,200 bopd (100% basis). It is anticipated that only five SAGD well pairs need to be operating to achieve this production level. While the joint venture has not yet approved to expand the SAGD Project, currently, the SAGD Project continues to move forward with engineering and identification of long lead time items towards potential expansion to 3,200 bopd and future development at Sawn Lake. First production from the SAGD Project began on September 16, 2014. As a result of the low-price environment for bitumen in 2015 and early 2016, a majority of the Company’s Joint Venture partners voted to temporarily suspend operations of the SAGD Project at the end of February 2016. On February 15, 2018, the Company participated in a well on one of its oil sands leases to acquire cores and logs through the Bluesky formation, whereby the Company paid to the operator a cash contribution of $395,500 ($500,000 Cdn). The Company is currently analyzing the cores and logs. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Consolidation | Basis of Consolidation These consolidated financial statements include the accounts of two wholly owned subsidiaries: (1) Northern Alberta Oil Ltd. (“Northern”) from the date of acquisition, being June 7, 2005, incorporated under the Business Corporations Act (Alberta), Canada; and (2) Deep Well Oil & Gas (Alberta) Ltd., incorporated under the Business Corporations Act (Alberta), Canada on September 15, 2005. All inter-company balances and transactions have been eliminated. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company determines allowances for doubtful accounts based on aging of specific accounts. Accounts receivable are stated at the historical carrying amounts net of allowances for doubtful accounts and include only the amounts the Company deems to be collectable. The allowance for bad debts was $nil and $nil at September 30, 2017 and September 30, 2016, respectively. |
Crude oil and natural gas properties | Crude oil and natural gas properties The Company follows the full cost method of accounting for oil sands properties pursuant to SEC Regulation S-X Rule 4-10. The full cost method of accounting for oil and gas operations requires that all costs associated with the exploration for and development of oil and gas reserves be capitalized on a country by country basis. Such costs include lease acquisition costs, geological and geophysical expenses, carrying charges on non-producing properties, costs of drilling both productive and non-productive wells, production equipment and overhead charges directly related to acquisition, exploration and development activities. Under the full cost method, oil and gas properties are subject to the ceiling test performed quarterly. A ceiling test write-down is recognized in net earnings if the carrying amount of a cost centre exceeds the "cost centre ceiling". The carrying amount of the cost centre includes the capitalized costs of proved oil and natural gas properties, net of accumulated depletion and deferred income taxes. The cost centre ceiling is the sum of (A) present value of the estimated future net cash flows from proved oil and natural gas reserves using a 10 percent per year discount factor, (B) the costs of unproved properties not being amortized, and (C) the lower of cost or fair value of unproved properties included in the costs being amortized; less (D) related income tax effects. During the 2017 fiscal year, no ceiling test write-downs were recorded for our oil and gas properties. Costs associated with unproved properties are excluded from the depletion calculation until it is determined that proved reserves are attributable or impairment has occurred. Unproved properties are assessed annually for impairment. Costs that have been impaired are included in the costs subject to depletion within the full cost pool. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation expense is computed using the declining balance method over the estimated useful life of the asset. Only half of the depreciation rate is taken in the year of acquisition. The following is a summary of the depreciation rates used in computing depreciation expense: % Software 100 Computer equipment 55 Portable work camp 30 Vehicles 30 Road Mats 30 Wellhead 25 Office furniture and equipment 20 Oilfield Equipment 20 Tanks 10 Expenditures for major repairs and renewals that extend the useful life of the asset are capitalized. Minor repair expenditures are charged to expense as incurred. Leasehold improvements are amortized over the greater of five years or the remaining life of the lease agreement. Depreciation, Depletion and Amortization - Costs of acquiring and evaluating unproved properties and major development projects are initially excluded from the depletion and depreciation calculation until it is determined whether or not proved reserves can be assigned to such properties. Costs of unproved properties and major development projects are transferred to depletable costs based on the percentage of reserves assigned to each project over the expected total reserves when the project was initiated. These costs are assessed periodically to ascertain whether impairment has occurred. |
Asset Retirement Obligations | Asset Retirement Obligations The Company accounts for asset retirement obligations by recording the fair value of the estimated future cost of the Company’s plugging and abandonment obligations. The asset retirement obligation is recorded when there is a legal obligation associated with the retirement of a tangible long-lived asset and the fair value of the liability can reasonably be estimated. Upon initial recognition of an asset retirement obligation, the Company increases the carrying amount of the long-lived asset by the same amount as the liability. Over time, the liabilities are accreted for the change in their present value through charges to oil and gas production and well operations costs. The initial capitalized costs are depleted over the useful lives of the related assets through charges to depreciation, depletion, and amortization. If the fair value of the estimated asset retirement obligation changes, an adjustment is recorded to both the asset retirement obligation and the asset retirement cost. Revisions in estimated liabilities can result from revisions of estimated inflation rates, escalating retirement costs, and changes in the estimated timing of settling asset retirement obligations. As of September 30, 2017, and 2016, asset retirement obligations amount to $493,411 and $452,533, respectively. The Company has posted bonds, where required, with the Government of Alberta based on the amount the government estimates the cost of abandonment and reclamation to be. |
Foreign Currency Translation | Foreign Currency Translation The functional currency of the Canadian subsidiaries is the United States dollar. However, the Canadian subsidiaries transact in Canadian dollars. Consequently, monetary assets and liabilities are remeasured into United States dollars at the exchange rate on the balance sheet date and non-monetary items are remeasured at the rate of exchange in effect when the assets are acquired or obligations incurred. Revenues and expenses are remeasured at the average exchange rate prevailing during the period. Foreign currency transaction gains and losses are included in results of operations. |
Accounting Method | Accounting Method The Company recognizes income and expenses based on the accrual method of accounting. |
Dividend Policy | Dividend Policy The Company has not yet adopted a policy regarding payment of dividends. |
Financial, Concentration and Credit Risk | Financial, Concentration and Credit Risk The Company’s consideration or related financial credit risk related to cash and cash equivalents depends on if funds are fully insured by either The Canada Deposit Insurance Corporation (“CDIC”), or The Credit Union Deposit Guarantee Corporation (“CUDGC”) deposit insurance limit. As of the 2017 fiscal year end the Company has approximately $41,244 funds that are in excess of deposit insurance limits, which may have financial credit risk. For the Company funds that are maintained in a financial institution which has its deposits fully guaranteed by CUDGC, there is no financial credit risk. The Company is not directly subject to credit risk resulting from the concentration of its crude oil sales. For the year ended September 30, 2017, the Company recorded no oil sales, however for the year ended September 30, 2016, the Company had recorded oil sales received from the operator of the Company’s producing properties. The Company’s joint venture partner is the operator of the Company’s producing properties and it is the Company’s joint venture partner who sells all of the Company’s oil production to 11 purchasers in the oil and gas industry. The Company does not require collateral and management periodically evaluates the operator’s financial statements and the collectability of oil sales receivables from the operator and believes that the Company’s oil sales receivables are fully collectable and that the risk of loss is minimal. |
Income Taxes | Income Taxes The Company utilizes the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax bases of the assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. An allowance against deferred tax assets is recorded when it is more likely than not that such tax benefits will not be realized. Due to the uncertainty regarding the Company’s profitability, a valuation allowance has been recorded against the future tax benefits of its losses and no net benefit has been recorded in the consolidated financial statements. |
Revenue Recognition | Revenue Recognition The Company is in the business of exploring for, developing, producing, and selling crude oil. Crude oil revenue is recognized when the product is taken from the storage tanks on the lease and delivered to the purchaser and title transfers to the purchaser. Payment is generally received one to three months after the sale has occurred. Occasionally the Company may sell specific leases, and the gain or loss associated with these transactions will be shown separately from the profit or loss from the operations or sales of oil products. Such gain or losses will be measured and recognized when all of the following have occurred: (1) there is persuasive evidence of an arrangement to sell; (2) the price of the sale is fixed or determinable; (3) the title to the lease has transferred; and (4) collection is reasonably assured. |
Advertising and Market Development | Advertising and Market Development The Company expenses advertising and market development costs as incurred. |
Basic and Diluted Net Loss Per Share | Basic and Diluted Net Loss Per Share Basic net loss per share amounts are computed based on the weighted average number of shares actually outstanding. Diluted net loss per share amounts are computed using the weighted average number of common shares and common equivalent shares outstanding as if shares had been issued on the exercise of the common share rights, unless the exercise becomes antidilutive and then the basic and diluted per share amounts are the same. There were 11,530,000 potentially dilutive securities excluded from the the diluted earnings per share calculation because their effect would be antidilutive. |
Financial Instruments | Financial Instruments Financial instruments include cash and cash equivalents, accounts receivable, long-term investments, investment in equity securities, accounts payable and accounts payable - related parties. The fair value of these financial instruments approximates their carrying value because of the short-term maturity of these items unless otherwise noted. The fair value of the investment in equity securities cannot be determined as the market value is not readily obtainable. The equity securities are reported using the cost method. |
Environmental Requirements | Environmental Requirements At the report date, environmental requirements related to the oil properties acquired are unknown and therefore an estimate of any future cost cannot be made. |
Share-Based Compensation | Share-Based Compensation The Company accounts for stock options granted to directors, officers, employees and non-employees using the fair value method of accounting. The fair value of stock options for directors, officers, employees and their corporate entities are calculated at the date of grant and are expensed over the vesting period of the options on a straight-line basis. For non-employees, the fair value of the options is measured on the earlier of the date at which the counterparty performance is complete or the date at which the performance commitment is reached. The Company uses the Black-Scholes model to calculate the fair value of stock options issued, which requires certain assumptions to be made at the time the options are awarded, including the expected life of the option, the expected number of granted options that will vest and the expected future volatility of the stock. The Company reflects estimates of award forfeitures at the time of grant and revises in subsequent periods, if necessary, when forfeiture rates are expected to change. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” requiring lessees to recognize lease assets and lease liabilities for most leases classified as operating leases under previous U.S. GAAP. The guidance is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company will be required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. |
Estimates and Assumptions | Estimates and Assumptions Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used in preparing these consolidated financial statements. Significant estimates by management include valuations of oil properties, valuation of accounts receivable, useful lives of long-lived assets, asset retirement obligations, valuation of share-based compensation, and the realizability of future income taxes. |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of depreciation rates used in computing depreciation expense | % Software 100 Computer equipment 55 Portable work camp 30 Vehicles 30 Road Mats 30 Wellhead 25 Office furniture and equipment 20 Oilfield Equipment 20 Tanks 10 |
Oil and Gas Properties (Tables)
Oil and Gas Properties (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Oil and Gas Properties [Abstract] | |
Summary of net payments due in lease rental commitment | (USD $) (Cdn $) 2018 $ 33,346 $ 41,615 2019 $ 21,653 $ 27,022 2020 $ 21,653 $ 27,022 2021 $ 20,576 $ 25,678 2022 $ 27,836 $ 34,738 Subsequent $ 156,774 $ 195,650 |
Capitalization of Costs Incur28
Capitalization of Costs Incurred in Oil and Gas Activities (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Capitalization of Costs Incurred in Oil and Gas Activities [Abstract] | |
Summary of capitalized costs relating to oil producing activities | September 30, September 30, Unproved Oil and Gas Properties $ 21,380,452 $ 21,238,052 Proved Oil and Gas Properties – – Accumulated Depreciation and Depletion (84,778 ) (73,637 ) Net Capitalized Cost $ 21,295,674 $ 21,164,415 |
Exploration Activities (Tables)
Exploration Activities (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Exploration Activities [Abstract] | |
Summary of costs incurred in the oil property acquisition, exploration and development activities | September 30, September 30, Acquisition of Properties: Proved $ – $ – Unproved 142,400 194,037 Exploration costs – 39,658 Development costs – – |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Property and Equipment [Abstract] | |
Schedule of property and equipment | September 30, 2017 Accumulated Net Book Cost Depreciation Value Computer equipment $ 34,750 $ 32,899 $ 1,851 Office furniture and equipment 34,130 30,529 3,601 Software 5,826 5,826 – Leasehold improvements 4,936 4,936 – Portable work camp 170,580 162,305 8,275 Vehicles 38,077 38,077 – Oilfield equipment 249,045 204,917 44,128 Road mats 364,614 346,748 17,866 Wellhead 3,254 2,747 507 Tanks 96,085 56,793 39,292 $ 1,001,297 $ 885,777 $ 115,520 September 30, 2016 Accumulated Net Book Cost Depreciation Value Computer equipment $ 32,198 $ 32,093 $ 105 Office furniture and equipment 34,130 29,629 4,501 Software 5,826 5,826 – Leasehold improvements 4,936 4,936 – Portable work camp 170,580 158,758 11,822 Vehicles 38,077 35,412 2,665 Oilfield equipment 249,045 176,141 72,904 Road mats 364,614 339,091 25,523 Wellhead 3,254 2,578 676 Tanks 96,085 52,426 43,659 $ 998,745 $ 836,890 $ 161,855 |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Asset Retirement Obligations [Abstract] | |
Schedule of changes to the asset retirement obligation | September 30, September 30, Balance, beginning of period $ 452,533 $ 426,607 Liabilities incurred – Effect of foreign exchange 23,969 9,771 Disposal – Accretion expense 16,909 16,155 Balance, end of period $ 493,411 $ 452,533 |
Common Stock (Tables)
Common Stock (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Common Stock [Abstract] | |
Summary of warrants activity | Number of Warrants Weighted Average Exercise Price Intrinsic Value Balance, September 30, 2016 52,155,221 $ 0.105 $ – Expired at November 23, 2016 (52,155,221 ) 0.105 – Balance, September 30, 2017 – $ – $ – Outstanding Warrants, September 30, 2017 – $ – $ – |
Stock Options (Tables)
Stock Options (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Stock Options [Abstract] | |
Summary of stock options | Shares Underlying Shares Underlying Range of Exercise Prices Shares Underlying Options Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Shares Underlying Options Exercisable Weighted Average Exercise Price $0.05 at September 30, 2017 3,450,000 0.72 0.05 3,450,000 – $0.30 at September 30, 2017 250,000 1.08 0.30 250,000 – $0.34 at September 30, 2017 450,000 1.18 0.34 450,000 – $0.38 at September 30, 2017 6,780,000 1.97 0.38 6,780,000 – $0.23 at September 30, 2017 600,000 2.13 0.23 600,000 – 11,530,000 1.55 $ 0.27 11,530,000 $ – |
Summary of stock option activity | Number of Underlying Shares Weighted Average Exercise Price Weighted Average Fair Market Value Balance, September 30, 2016 11,530,000 $ 0.27 $ 0.22 Balance, September 30, 2017 11,530,000 $ 0.27 $ 0.22 Exercisable, September 30, 2017 11,530,000 $ 0.27 $ 0.22 |
Summary of option granted | September 30, 2017 September 30, 2016 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding balance at beginning of period 11,530,000 $ 0.27 12,430,000 $ 0.26 Vested - November 17, 2015 200,000 0.23 Vested - December 4, 2015 150,000 0.34 Vested - September 19, 2016 1,460,000 0.38 Expired - March 23, 2016 (900,000 ) 0.14 Vested - November 17, 2016 200,000 0.23 Outstanding at end of period 11,530,000 $ 0.27 11,530,000 $ 0.27 Exercisable 11,530,000 $ 0.27 11,330,000 $ 0.27 |
Changes in Non-Cash Working C34
Changes in Non-Cash Working Capital (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Changes in Non-Cash Working Capital [Abstract] | |
Summary of changes in non-cash working capital | September 30, September 30, 2017 2016 Accounts receivable $ (58,715 ) $ 279,255 Prepaid expenses (3,125 ) 4,747 Accounts payable and accounts payable and accrued liabilities -related party 116,177 (226,949 ) $ 54,337 $ 57,053 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Income Taxes [Abstract] | |
Schedule of statutory and effective tax rate of domestic and foreign | Year Ended Year Ended Statutory and effective tax rate Domestic Statutory U.S. federal rate 21 % 35 % Foreign 27 % 27 % |
Schedule of effective income tax rate reconciliation | Year Ended Year Ended Income taxes recovered at the statutory and effective tax rate Domestic Statutory U.S. federal rate $ 24,570 $ 123,447 Foreign 47,547 54,451 Timing differences: Non-deductible expenses (14,266 ) (127,363 ) Other deductible charges – – Benefit of tax losses not recognized in the year (57,851 ) (50,535 ) Income tax recovery (expense) recognized in the year $ – $ – |
Schedule of deferred tax assets and liabilities | Year Ended September 30, Year Ended September 30, Deferred income tax assets (liabilities) Net operating loss carry-forwards $ 3,448,864 $ 4,241,416 Oil and gas properties (173,294 ) (2,056,543 ) Equipment 200,186 187,150 Valuation allowance (3,475,756 ) (2,372,023 ) Net deferred income tax assets $ – $ – |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Commitments [Abstract] | |
Summary of quarterly payments due under lease agreement | USD $ Cdn $ 2018 Q1 (October - December) $ 6,385 $ 7,969 2018 Q2 (January - March) $ 6,385 $ 7,969 2018 Q3 (April - June) $ 6,385 $ 7,969 2018 Q4 (July - September) $ 6,385 $ 7,969 2019 Q1 (October - December) $ 6,385 $ 7,969 2019 Q2 (January - March) $ 6,385 $ 7,969 2019 Q3 (April - June) $ 6,385 $ 7,969 |
Crude Oil and Natural Gas Pro37
Crude Oil and Natural Gas Property Information (Unaudited) (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Crude Oil and Natural Gas Property Information (Unaudited) [Abstract] | |
Summary of operations from oil and gas producing activities | September 30, September 30, 2016 Oil sales after royalties $ – $ 179,467 Production (Operating) expenses – (179,467 ) Depreciation, accretion and depletion (75,232 ) (68,066 ) Oil sales less expenses (75,232 ) (68,066 ) Income tax expenses – – Results of operations from producing activities $ (75,232 ) $ (68,066 ) |
Nature of Business and Basis 38
Nature of Business and Basis of Presentation (Details) - $ / shares | Sep. 30, 2017 | Sep. 30, 2016 |
Nature of Business and Basis of Presentation (Textual) | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Summary of Significant Accoun39
Summary of Significant Accounting Policies (Details ) | 12 Months Ended |
Sep. 30, 2017 | |
Software [Member] | |
Summary of the depreciation rates used in computing depreciation expense | |
Depreciation percentage in depreciation expense | 100.00% |
Computer equipment [Member] | |
Summary of the depreciation rates used in computing depreciation expense | |
Depreciation percentage in depreciation expense | 55.00% |
Portable work camp[Member] | |
Summary of the depreciation rates used in computing depreciation expense | |
Depreciation percentage in depreciation expense | 30.00% |
Vehicles [Member] | |
Summary of the depreciation rates used in computing depreciation expense | |
Depreciation percentage in depreciation expense | 30.00% |
Road Mats [Member] | |
Summary of the depreciation rates used in computing depreciation expense | |
Depreciation percentage in depreciation expense | 30.00% |
Wellhead [Member] | |
Summary of the depreciation rates used in computing depreciation expense | |
Depreciation percentage in depreciation expense | 25.00% |
Office furniture and equipment[Member] | |
Summary of the depreciation rates used in computing depreciation expense | |
Depreciation percentage in depreciation expense | 20.00% |
Oilfield Equipment [Member] | |
Summary of the depreciation rates used in computing depreciation expense | |
Depreciation percentage in depreciation expense | 20.00% |
Tanks [Member] | |
Summary of the depreciation rates used in computing depreciation expense | |
Depreciation percentage in depreciation expense | 10.00% |
Summary of Significant Accoun40
Summary of Significant Accounting Policies (Details Textual) - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Summary of significant accounting policies (Textual) | ||
Allowance for bad debts | ||
Asset retirement obligations | 493,411 | $ 452,533 |
Excess of deposit insurance limits | $ 41,244 | |
Financial, concentration and credit risk, description | The Company's joint venture partner is the operator of the Company's producing properties and it is the Company's joint venture partner who sells all of the Company's oil production to 11 purchasers in the oil and gas industry. | |
Antidilutive securities excluded from computation of earnings | 11,530,000 |
Oil and Gas Properties (Details
Oil and Gas Properties (Details) - Sep. 30, 2017 | USD ($) | CAD ($) |
Oil and Gas Properties [Abstract] | ||
2,018 | $ 33,346 | $ 41,615 |
2,019 | 21,653 | 27,022 |
2,020 | 21,653 | 27,022 |
2,021 | 20,576 | 25,678 |
2,022 | 27,836 | 34,738 |
Subsequent | $ 156,774 | $ 195,650 |
Oil and Gas Properties (Detai42
Oil and Gas Properties (Details Textual) | 1 Months Ended | 12 Months Ended |
Jul. 31, 2013USD ($) | Sep. 30, 2017aoil | |
Oil and Gas Properties (Textual) | ||
Gas and oil area, gross | a | 43,015 | |
Gas and oil area, net | a | 34,096 | |
Description for term of capital lease | If the Company meets the conditions of the leases the Company will then be permitted to drill on and produce oil from the land into perpetuity. These conditions give the Company until the expiration of the leases to meet the following requirements on its oil sands leases: 1) The original requirement was to drill evaluation wells on each section within the lease, however the Alberta Department of Energy has temporarily relaxed the drilling requirements under section 3(2)(a) of the Oil Sands Tenure Regulation of the Mines and Minerals Act of Alberta. Under the relaxed rules the Company would now have to drill 26 wells throughout the 68 sections to preserve all of the Company's nine oil sands leases; or 2) drill evaluation wells on at least 60% of the sections within the lease of which 25% of the evaluation wells must be cored, and acquire and process two miles of seismic data for the remaining undrilled sections within the lease. | |
Land One [Member] | ||
Oil and Gas Properties (Textual) | ||
Lease agreements, expiration date | Jul. 10, 2018 | |
Number of oil and gas for leases | 5 | |
Land Two [Member] | ||
Oil and Gas Properties (Textual) | ||
Lease agreements, expiration date | Aug. 19, 2019 | |
Number of oil and gas for leases | 3 | |
Land Three [Member] | ||
Oil and Gas Properties (Textual) | ||
Lease agreements, expiration date | Apr. 9, 2024 | |
Number of oil and gas for leases | 1 | |
Farmout Agreement [Member] | ||
Oil and Gas Properties (Textual) | ||
Description and terms of farmout agreement | On July 31, 2013, the Company entered into a Farmout agreement (the "Farmout Agreement") with an additional joint venture partner (the "Farmee") to fund the Company's share of the Alberta Energy Regulator ("AER") approved joint Steam Assisted Gravity Drainage Demonstration project ("SAGD Project") at the Company's Sawn Lake heavy oil reservoir in North Central Alberta, Canada. In accordance with the Farmout Agreement the Farmee has agreed to provide up to $40,000,000 in funding for the Company's portion of the costs for the SAGD Project, in return for a net 25% working interest in 12 sections where the Company had a working interest of 50% (before the execution of the Farmout Agreement). | |
Funding for project under agreement | $ | $ 40,000,000 | |
Monthly maximum payable by farmee for operating expense | $ | $ 30,000 |
Capitalization of Costs Incur43
Capitalization of Costs Incurred in Oil and Gas Activities (Details) - USD ($) | Sep. 30, 2017 | Sep. 30, 2016 |
Summary of capitalized costs relating to oil and gas producing activities | ||
Unproved Oil and Gas Properties | $ 21,380,452 | $ 21,238,052 |
Proved Oil and Gas Properties | ||
Accumulated Depreciation and Depletion | (84,778) | (73,637) |
Net Capitalized Cost | $ 21,295,674 | $ 21,164,415 |
Capitalization of Costs Incur44
Capitalization of Costs Incurred in Oil and Gas Activities (Details Textual) - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Capitalization of Costs Incurred in Oil and Gas Activities (Textual) | ||
Depreciation and depletion expense | $ 11,141 | $ 11,274 |
Exploration Activities (Details
Exploration Activities (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Acquisition of Properties: | ||
Proved | ||
Unproved | 142,400 | 194,037 |
Exploration costs | 39,658 | |
Development costs |
Investment in Equity Securiti46
Investment in Equity Securities (Details) - shares | 1 Months Ended | |
Nov. 19, 2008 | Dec. 31, 2016 | |
Investment in Equity Securities (Textual) | ||
Conversion of Signet shares into shares of Andora Energy Corporation | 2,241,558 | |
Percentage of equity interest in Andora | 2.24% |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Sep. 30, 2017 | Sep. 30, 2016 |
Property, Plant and Equipment [Line Items] | ||
Cost | $ 1,001,297 | $ 998,745 |
Accumulated Depreciation | 885,777 | 836,890 |
Net Book Value | 115,520 | 161,855 |
Computer equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 34,750 | 32,198 |
Accumulated Depreciation | 32,899 | 32,093 |
Net Book Value | 1,851 | 105 |
Office furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 34,130 | 34,130 |
Accumulated Depreciation | 30,529 | 29,629 |
Net Book Value | 3,601 | 4,501 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 5,826 | 5,826 |
Accumulated Depreciation | 5,826 | 5,826 |
Net Book Value | ||
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 4,936 | 4,936 |
Accumulated Depreciation | 4,936 | 4,936 |
Net Book Value | ||
Portable work camp [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 170,580 | 170,580 |
Accumulated Depreciation | 162,305 | 158,758 |
Net Book Value | 8,275 | 11,822 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 38,077 | 38,077 |
Accumulated Depreciation | 38,077 | 35,412 |
Net Book Value | 2,665 | |
Oilfield equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 249,045 | 249,045 |
Accumulated Depreciation | 204,919 | 176,141 |
Net Book Value | 44,128 | 72,904 |
Road mats [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 364,614 | 364,614 |
Accumulated Depreciation | 346,748 | 339,091 |
Net Book Value | 17,866 | 25,523 |
Wellhead [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 3,254 | 3,254 |
Accumulated Depreciation | 2,748 | 2,578 |
Net Book Value | 507 | 676 |
Tanks [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 96,085 | 96,085 |
Accumulated Depreciation | 56,793 | 52,426 |
Net Book Value | $ 39,292 | $ 43,659 |
Property and Equipment (Detai48
Property and Equipment (Details Textual) - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Property and Equipment (Textual) | ||
Depreciation expense | $ 48,887 | $ 42,115 |
Long-Term Investments (Details)
Long-Term Investments (Details) | 12 Months Ended |
Sep. 30, 2017 | |
Long-Term Investments (Textual) | |
Long term investment rate percentage below prime rate | 0.375% |
Significant Transactions with50
Significant Transactions with Related Parties (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Significant Transactions with Related Parties (Textual) | ||
Accounts payable - related parties | $ 9,934 | $ 2,469 |
Percentage of outstanding common capital stock | 53.63% | |
Professional fees to related party | $ 136,980 | $ 135,828 |
Asset Retirement Obligations (D
Asset Retirement Obligations (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Asset Retirement Obligations [Abstract] | ||
Balance, beginning of period | $ 452,533 | $ 426,607 |
Liabilities incurred | ||
Effect of foreign exchange | 23,969 | 9,771 |
Disposal | ||
Accretion expense | 16,909 | 16,155 |
Balance, end of period | $ 493,411 | $ 452,533 |
Asset Retirement Obligations 52
Asset Retirement Obligations (Details Textual) - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Asset Retirement Obligations (Textual) | ||
Estimate of undiscounted cash flows related to asset retirement obligation | $ 647,631 | $ 616,191 |
Fair value of liability | $ 493,411 | $ 452,533 |
Risk free rate | 3.74% | |
Inflation rate | 2.00% | |
Term of settlement of the obligation | 26 years |
Common Stock (Details)
Common Stock (Details) - Warrant [Member] - $ / shares | 12 Months Ended | ||
Sep. 30, 2017 | Jul. 28, 2015 | Oct. 03, 2014 | |
Summary of warrant activity | |||
Number of Warrants, Beginning Balance | 52,155,221 | ||
Number of Warrants, Warrants Expired | (52,155,221) | ||
Number of Warrants, Ending Balance | |||
Number of Warrants, Outstanding Warrants | |||
Weighted Average Exercise Price, Beginning balance | $ 0.105 | ||
Weighted Average Exercise Price, Warrants expired | 0.105 | ||
Weighted Average Exercise Price, Ending balance | |||
Weighted Average Exercise Price, Outstanding Warrants | $ 0.105 | $ 0.105 | |
Intrinsic Value, Beginning balance | |||
Intrinsic Value, Warrants expired | |||
Intrinsic Value, Balance, Ending balance | |||
Intrinsic Value, Outstanding Warrants |
Common Stock (Details Textual)
Common Stock (Details Textual) - USD ($) | Nov. 23, 2016 | Oct. 03, 2014 | Jun. 20, 2016 | Jul. 28, 2015 | Sep. 30, 2017 | Sep. 30, 2016 |
Common Stock (Textual) | ||||||
Common Stock, Outstanding | 229,374,605 | 229,374,605 | ||||
Risk free rate | 3.74% | |||||
Warrant [Member] | ||||||
Common Stock (Textual) | ||||||
Stock issued during period to warrant holder shares | 47,618 | |||||
Exercise price of warrant | $ 0.105 | $ 0.105 | ||||
Gross proceeds from issuance of warrants | $ 5,000 | |||||
Warrants expiration date | Nov. 23, 2016 | |||||
Warrants outstanding | 71,857,141 | 52,155,221 | ||||
Number of warrants expired unexercised | 52,155,221 | 520,000 | ||||
Historical fair market value of warrant | $ 3,153,216 | |||||
Expected term | 1 year 3 months 29 days | |||||
Expected volatility | 111.00% | |||||
Risk free rate | 0.67% | |||||
Warrant [Member] | Maximum [Member] | ||||||
Common Stock (Textual) | ||||||
Warrants outstanding | 71,857,141 | |||||
Warrant [Member] | Minimum [Member] | ||||||
Common Stock (Textual) | ||||||
Warrants outstanding | 52,155,221 |
Stock Options (Details)
Stock Options (Details) | 12 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Summary of stock options | |
Shares Underlying Options Outstanding | shares | 11,530,000 |
Shares Underlying Options Outstanding, Weighted Average Remaining Contractual Life | 1 year 6 months 18 days |
Shares Underlying Options Outstanding, Weighted Average Exercise Price | $ / shares | $ 0.27 |
Shares Underlying Options Exercisable | shares | 11,530,000 |
Shares Underlying Options Exercisable, Weighted Average Exercise Price | $ / shares | |
$0.05 at September 30, 2017 [Member] | Stock Options [Member] | |
Summary of stock options | |
Shares Underlying Options Outstanding | shares | 3,450,000 |
Shares Underlying Options Outstanding, Weighted Average Remaining Contractual Life | 8 months 19 days |
Shares Underlying Options Outstanding, Weighted Average Exercise Price | $ / shares | $ 0.05 |
Shares Underlying Options Exercisable | shares | 3,450,000 |
Shares Underlying Options Exercisable, Weighted Average Exercise Price | $ / shares | |
$0.30 at September 30, 2017 [Member] | Stock Options [Member] | |
Summary of stock options | |
Shares Underlying Options Outstanding | shares | 250,000 |
Shares Underlying Options Outstanding, Weighted Average Remaining Contractual Life | 1 year 29 days |
Shares Underlying Options Outstanding, Weighted Average Exercise Price | $ / shares | $ 0.30 |
Shares Underlying Options Exercisable | shares | 250,000 |
Shares Underlying Options Exercisable, Weighted Average Exercise Price | $ / shares | |
$0.34 at September 30, 2017 [Member] | Stock Options [Member] | |
Summary of stock options | |
Shares Underlying Options Outstanding | shares | 450,000 |
Shares Underlying Options Outstanding, Weighted Average Remaining Contractual Life | 1 year 2 months 5 days |
Shares Underlying Options Outstanding, Weighted Average Exercise Price | $ / shares | $ 0.34 |
Shares Underlying Options Exercisable | shares | 450,000 |
Shares Underlying Options Exercisable, Weighted Average Exercise Price | $ / shares | |
$0.38 at September 30, 2017 [Member] | Stock Options [Member] | |
Summary of stock options | |
Shares Underlying Options Outstanding | shares | 6,780,000 |
Shares Underlying Options Outstanding, Weighted Average Remaining Contractual Life | 1 year 11 months 19 days |
Shares Underlying Options Outstanding, Weighted Average Exercise Price | $ / shares | $ 0.38 |
Shares Underlying Options Exercisable | shares | 6,780,000 |
Shares Underlying Options Exercisable, Weighted Average Exercise Price | $ / shares | |
$0.23 at September 30, 2017 [Member] | Stock Options [Member] | |
Summary of stock options | |
Shares Underlying Options Outstanding | shares | 600,000 |
Shares Underlying Options Outstanding, Weighted Average Remaining Contractual Life | 2 years 1 month 16 days |
Shares Underlying Options Outstanding, Weighted Average Exercise Price | $ / shares | $ 0.23 |
Shares Underlying Options Exercisable | shares | 600,000 |
Shares Underlying Options Exercisable, Weighted Average Exercise Price | $ / shares |
Stock Options (Details 1)
Stock Options (Details 1) - Stock Options [Member] - $ / shares | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 |
Summary of company's stock options | |||
Number of Underlying Shares, Balance | 11,530,000 | 11,530,000 | 12,430,000 |
Weighted Average Exercise Price, Balance | $ 0.27 | $ 0.27 | $ 0.26 |
Weighted Average Fair Market Value, Balance | $ 0.22 | $ 0.22 | |
Number of Underlying Shares, Exercisable | 11,530,000 | 11,330,000 | |
Weighted Average Exercise Price, Exercisable | $ 0.27 | $ 0.27 | |
Weighted Average Fair Market Value, Exercisable | $ 0.22 |
Stock Options (Details 2)
Stock Options (Details 2) - Employee Stock Option [Member] - $ / shares | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Summary of the options granted | ||
Number of underlying shares, Beginning balance | 11,530,000 | 12,430,000 |
Number of option, Vested - November 17, 2015 | 200,000 | |
Number of option, Vested - December 4, 2015 | 150,000 | |
Number of option, Vested - September 19, 2016 | 1,460,000 | |
Number of option, Expired - March 23, 2016 | (900,000) | |
Number of option, Vested - November 17, 2016 | 200,000 | |
Number of underlying shares, Ending balance | 11,530,000 | 11,530,000 |
Number of Underlying Shares, Exercisable | 11,530,000 | 11,330,000 |
Weighted Average Exercise Price, Beginning balance | $ 0.27 | $ 0.26 |
Weighted Average Exercise Price, Vested - November 17, 2015 | 0.23 | |
Weighted Average Exercise Price, Vested - December 4, 2015 | 0.34 | |
Weighted Average Exercise Price, Vested - September 19, 2016 | 0.38 | |
Weighted Average Exercise Price, Expired - March 23, 2016 | 0.14 | |
Weighted Average Exercise Price, Vested - November 17, 2016 | 0.23 | |
Weighted Average Exercise Price, Ending balance | 0.27 | 0.27 |
Weighted Average Exercise Price, Exercisable | $ 0.27 | $ 0.27 |
Stock Options (Details Textual)
Stock Options (Details Textual) | Nov. 17, 2014$ / sharesshares | Mar. 23, 2016Numbershares | Sep. 30, 2017USD ($)shares | Sep. 30, 2016USD ($)shares | Sep. 30, 2015shares | Nov. 28, 2005 |
Stock Options (Textual) | ||||||
Share-based compensation | $ | $ 2,314 | $ 237,971 | ||||
Unrecognized compensation cost related to awards | $ | ||||||
Stock Option Plan [Member] | ||||||
Stock Options (Textual) | ||||||
Maximum percentage of number of shares which may be reserved for issuance | 10.00% | |||||
Stock options and stock units issued vesting, percentage | 2.00% | |||||
Percentage of total number of common shares outstanding | 6.00% | |||||
Stock Options [Member] | ||||||
Stock Options (Textual) | ||||||
Stock option outstanding | 11,530,000 | 11,530,000 | 12,430,000 | |||
Number of options, granted | ||||||
Aggregate intrinsic value of exercisable options | $ | ||||||
Stock option outstanding unvested | 200,000 | |||||
Expected term | 5 years | |||||
Expected volatility, minimum | 102.00% | |||||
Expected volatility, maximum | 122.00% | |||||
Risk-free Interest rate, minimum | 1.31% | |||||
Risk-free Interest rate, maximum | 2.07% | |||||
Directors, Consultants and Employee [Member] | ||||||
Stock Options (Textual) | ||||||
Number of options, granted | 600,000 | |||||
Option exercise price | $ / shares | $ 0.23 | |||||
Option vesting period | 5 years | |||||
Number of shares vested immediately | 200,000 | |||||
Description of stock options vesting | Remaining vesting one-third on November 17, 2015, and one-third on November 17, 2016. | |||||
Directors [Member] | ||||||
Stock Options (Textual) | ||||||
Number of directors | Number | 2 | |||||
Number of options, granted | 900,000 |
Changes in Non-Cash Working C59
Changes in Non-Cash Working Capital (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Summary of changes in non-cash working capital | ||
Accounts receivable | $ (58,715) | $ 279,255 |
Prepaid expenses | (3,125) | 4,747 |
Accounts payable and accounts payable and accrued liabilities -related party | 116,177 | (226,949) |
Net changes in non-cash working capital (Note 13) | $ 54,337 | $ 57,053 |
Income Taxes (Details)
Income Taxes (Details) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Statutory and effective tax rate | ||
Domestic Statutory U.S. federal rate | 21.00% | 35.00% |
Foreign | 27.00% | 27.00% |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Income taxes recovered at the statutory and effective tax rate | ||
Domestic Statutory U.S. federal rate | $ 24,570 | $ 123,447 |
Foreign | 47,547 | 54,451 |
Timing differences: | ||
Non-deductible expenses | (14,266) | (127,363) |
Other deductible charges | ||
Benefit of tax losses not recognized in the year | (57,851) | (50,535) |
Income tax recovery (expense) recognized in the year |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Sep. 30, 2017 | Sep. 30, 2016 |
Deferred income tax assets (liabilities) | ||
Net operating loss carry-forwards | $ 3,448,864 | $ 4,241,416 |
Oil and gas properties | (173,294) | (2,056,543) |
Equipment | 200,186 | 187,150 |
Valuation allowance | (3,475,756) | (2,372,023) |
Net deferred income tax assets |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2017 | |
Income Taxes (Textual) | ||
Operating loss carryforwards | $ 6,184,515 | $ 6,311,751 |
Operating loss carryforwards, expiration date | Sep. 30, 2037 | |
Operating loss carry-forwards future income tax benefits | $ 4,241,416 | 3,448,864 |
Canadian [Member] | ||
Income Taxes (Textual) | ||
Operating loss carryforwards | $ 7,691,984 | $ 7,864,432 |
Operating loss carryforwards, expiration date | Sep. 30, 2037 |
Commitments (Details)
Commitments (Details) - Jul. 27, 2015 | USD ($) | CAD ($) |
2018 Q1 (October - December) [Member] | ||
Summary of annual payments under office lease agreement | ||
Quarterly payments due | $ 6,385 | $ 7,969 |
2018 Q2 (January - March) [Member] | ||
Summary of annual payments under office lease agreement | ||
Quarterly payments due | 6,385 | 7,969 |
2018 Q3 (April - June) [Member] | ||
Summary of annual payments under office lease agreement | ||
Quarterly payments due | 6,385 | 7,969 |
2018 Q4 (July - September) [Member] | ||
Summary of annual payments under office lease agreement | ||
Quarterly payments due | 6,385 | 7,969 |
2019 Q1 (October - December) [Member] | ||
Summary of annual payments under office lease agreement | ||
Quarterly payments due | 6,385 | 7,969 |
2019 Q2 (January - March) [Member] | ||
Summary of annual payments under office lease agreement | ||
Quarterly payments due | 6,385 | 7,969 |
2019 Q3 (April - June) [Member] | ||
Summary of annual payments under office lease agreement | ||
Quarterly payments due | $ 6,385 | $ 7,969 |
Commitments (Details Textual)
Commitments (Details Textual) - Chief Financial Officer [Member] - Concorde Consulting [Member] | 12 Months Ended | |
Sep. 30, 2017USD ($) | Sep. 30, 2017CAD ($) | |
Commitments (Textual) | ||
Officer Ownership of Consulting Company | 100.00% | 100.00% |
Compensation paid per month to Executive Officer Consulting Company | $ 12,020 | $ 15,000 |
Crude Oil and Natural Gas Pro66
Crude Oil and Natural Gas Property Information (Unaudited) (Details) - Canada [Member] - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Results of Operations for Oil and Gas Producing Activities, by Geographic Area [Line Items] | ||
Oil sales after royalties | $ 179,467 | |
Production (Operating) expenses | (179,467) | |
Depreciation, accretion and depletion | (75,232) | (68,066) |
Oil sales less expenses | (75,232) | (68,066) |
Income tax expenses | ||
Results of operations from producing activities | $ (75,232) | $ (68,066) |
Crude Oil and Natural Gas Pro67
Crude Oil and Natural Gas Property Information (Unaudited) (Details Textual) | 12 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($)barrels$ / pure | Sep. 30, 2017CAD ($) | |
Crude Oil and NGL [Member] | |||
Crude Oil and Natural Gas Property Information (Textual) | |||
Oil sales after royalties | $ 179,467 | ||
Consolidated oil and gas production volumes net barrels | barrels | 19,156 | ||
Average oil sales price per barrel | 7.91 | ||
Production (Operating) expenses | |||
Farmee reimbursement of costs to the Company and/or the operator | $ 21,200,000 | $ 26,500,000 | |
Estimated gross capital costs SAGD Project steam plant facility | $ 26,500,000 | $ 21,200,000 | |
SAGD Project [Member] | |||
Crude Oil and Natural Gas Property Information (Textual) | |||
Percentage of average production | 100.00% | ||
Sagd Project | The SAGD Project reached a steady state production level in January and February of 2016 with an average of 615 barrels of oil per day ("bopd"), on a 100% basis (154 bopd net to the Company), with an average SOR of 2.1 from one SAGD well pair. It is expected that a reactivation of the existing SAGD Project facility and current SAGD well pair will be part of the potential commercial expansion along with the previously AER approved second SAGD well pair. In early May of 2016, an amended application was submitted to the AER for an expansion of the existing SAGD Project facility site which would potentially increase the operation for up to a total of eight SAGD well pairs. The amended application sought approval to expand the current SAGD Project facility site to 3,200 bopd (100% basis). It is anticipated that only five SAGD well pairs need to be operating to achieve this production level. The expanded facility will be designed to handle up to 3,200 bopd. |
Subsequent Events (Details)
Subsequent Events (Details) | Dec. 15, 2017 | Nov. 21, 2017 | Sep. 30, 2017USD ($) | Sep. 30, 2017CAD ($) |
February 15, 2018 [Member] | ||||
Subsequent Events (Textual) | ||||
Cash contribution paid | $ 395,500 | $ 500,000 | ||
Subsequent Event [Member] | ||||
Subsequent Events (Textual) | ||||
Joint venture partner received approval, description | The Company's joint venture partner received approval from Alberta Energy, under the Alberta Oil Sands Tenure Regulation, to continue 2,816 gross hectares (704 hectares net to the Company) of lands, with a non-producing status, effective July 10, 2018. | |||
SAGD Project Expansion AER Approval, description | The amended application sought approval to expand the existing SAGD Project facility site to 3,200 bopd (100% basis). It is anticipated that only five SAGD well pairs need to be operating to achieve this production level. While the joint venture has not yet approved to expand the SAGD Project, currently, the SAGD Project continues to move forward with engineering and identification of long lead time items towards potential expansion to 3,200 bopd and future development at Sawn Lake. |