Arkanova Energy (AKVA) 10-K/A 2 Jul 15 2014 FY Annual report (amended) Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Sep. 30, 2014	Dec. 16, 2014	Mar. 31, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	ARKANOVA ENERGY CORP.
Entity Central Index Key	1,191,359
Current Fiscal Year End Date	--09-30
Entity Filer Category	Smaller Reporting Company
Document Type	10-K
Document Period End Date	Sep. 30, 2014
Document Fiscal Year Focus	2,014
Document Fiscal Period Focus	FY
Amendment Flag	true
Entity Common Stock, Shares Outstanding		54,182,267
Entity Public Float			$ 2,216,014.515
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	Sep. 30, 2014	Sep. 30, 2013
ASSETS
Cash and cash equivalents	$ 646,814	$ 540,636
Short term investment	25,094	15,000
Oil and gas receivables	117,174	134,842
Prepaid expenses and other	609,512	299,147
Total current assets	1,398,594	989,625
Property and equipment, net of accumulated depreciation and impairment of $335,504 and $255,032	304,392	273,581
Oil and gas properties, full cost method
Evaluated, net of accumulated depletion and impairment of $18,382,583 and $17,332,325	725,240	1,066,680
Other Assets	97,000	97,000
Total assets	2,525,226	2,426,886
LIABILITIES AND STOCKHOLDERS' DEFICIT
Accounts payable	586,406	521,681
Accrued liabilities	617,649	392,058
Due to related party	38,029	265,029
Notes payable	19,618	$ 10,127,592
Project advances	812,114
Other liabilities	37,500	$ 37,500
Total current liabilities	2,111,316	11,343,860
Loans payable	36,249	$ 55,867
Notes payable	11,811,025
Asset retirement obligations	149,124	$ 135,888
Other liabilities	46,875	84,375
Total liabilities	$ 14,154,589	$ 11,619,990
Contingencies and commitments
Stockholders' Deficit
Common Stock, $0.001 par value, 1,000,000,000 shares authorized, 54,182,267 (September 30, 2013 - 49,514,115) shares issued and outstanding	$ 54,182	$ 49,514
Additional paid-in capital	19,387,453	18,823,339
Accumulated deficit	(31,070,998)	(28,065,957)
Total stockholders' deficit	(11,629,363)	(9,193,104)
Total liabilities and stockholders' deficit	$ 2,525,226	$ 2,426,886

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2014	Sep. 30, 2013
ASSETS
Property and equipment, net of accumulated depreciation and impairment	$ 335,504	$ 255,032
Accumulated depletion and impairment on evaluated oil and gas properties	$ 18,382,583	$ 17,332,325
Stockholders' Deficit
Common Stock, par value (in Dollars per Share)	$ 0.001	$ 0.001
Common Stock, shares authorized (in Shares)	1,000,000,000	1,000,000,000
Common Stock, shares issued (in Shares)	54,182,267	49,514,115
Common Stock, shares outstanding (in Shares)	54,182,267	49,514,115

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($)	12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Revenue
Oil and gas sales	$ 763,303	$ 768,916
Operator income	81,000	81,000
Total revenue	844,303	849,916
Expenses
General and administrative expenses	1,309,953	1,249,240
Oil and gas production costs	782,008	780,958
Accretion	13,236	12,061
Depletion	419,471	431,748
Impairment of oil and gas properties	$ 630,787	519,125
Loss on disposal of equipment		1,917
Operating loss	$ (2,311,152)	(2,145,133)
Other income (expenses)
Interest expense	$ (693,889)	(575,023)
Gain on derivative liability		2,919
Loss on settlement of debt		(29,165)
Gain on forgiveness of debt		14,466
Net (loss) income	$ (3,005,041)	$ (2,731,936)
(Loss) earnings per share - basic and diluted (in Dollars per Share)	$ (0.06)	$ (0.06)
Basic weighted average common shares outstanding (in Shares)	52,878,000	48,865,000
Diluted weighted average common shares outstanding (in Shares)	52,878,000	48,865,000

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Operating Activities
Net loss	$ (3,005,041)	$ (2,731,936)
Adjustment to reconcile net loss to net cash used in operating activities:
Accretion	13,236	12,061
Depreciation	108,143	72,248
Depletion	419,471	431,748
Impairment of oil and gas properties	$ 630,787	519,125
Gain on derivative liability		(2,919)
Stock-based compensation	$ 101,967	22,832
Loss on settlement of debt		29,165
Gain on forgiveness of debt		(14,466)
Loss on disposal of equipment		1,917
Changes in operating assets and liabilities:
Prepaid expenses and other receivables	$ (311,115)	(269,549)
Oil and gas receivables	18,418	12,066
Accounts payable and accrued liabilities	(132,843)	123,551
Accrued interest	692,344	573,278
Due to related parties	(227,000)	38,650
Net Cash Used in Operating Activities	(1,691,633)	(1,182,229)
Investing Activities
Purchase of equipment	$ (138,954)	(102,586)
Proceeds from disposal of equipment		187
Oil and gas property expenditures	$ (511,250)	$ (85,830)
Project advances	812,114
Purchase of short term investment	(10,032)	$ (15,000)
Net Cash Provided by (Used in) Investing Activities	151,878	(203,229)
Financing Activities
Principal payments on debt	$ (59,067)	(348,262)
Repayment of related party loan		(600,000)
Proceeds from issuance of promissory notes	$ 1,705,000	2,500,000
Proceeds from issuance of common stock		300,000
Net Cash Provided by Financing Activities	$ 1,645,933	1,851,738
Net Change in Cash	106,178	466,280
Cash and cash equivalents - beginning of period	540,636	74,356
Cash and cash equivalents - end of period	$ 646,814	$ 540,636
Supplemental Cash Flow and Other Disclosures (Note 16)

Consolidated Statement of Stock

Consolidated Statement of Stockholders' Deficit - USD ($)	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Deficit [Member]
Balance at Sep. 30, 2012	$ (6,784,000)	$ 46,514	$ 18,503,507	$ (25,334,021)
Balance (in Shares) at Sep. 30, 2012		46,514,115
Shares issued for cash	300,000	$ 3,000	297,000
Shares issued for cash (in Shares)		3,000,000
Stock-based compensation	22,832		$ 22,832
Net loss for the year	(2,731,936)			$ (2,731,936)
Balance at Sep. 30, 2013	$ (9,193,104)	$ 49,514	$ 18,823,339	$ (28,065,957)
Balance (in Shares) at Sep. 30, 2013	49,514,115	49,514,115
Stock-based compensation	$ 101,967		101,967
Shares issued in connection with Note Purchase Agreement	466,815	$ 4,668	$ 462,147
Shares issued in connection with Note Purchase Agreement (in Shares)		4,668,152
Net loss for the year	(3,005,041)			$ (3,005,041)
Balance at Sep. 30, 2014	$ (11,629,363)	$ 54,182	$ 19,387,453	$ (31,070,998)
Balance (in Shares) at Sep. 30, 2014	54,182,267	54,182,267

BASIS OF PRESENTATION

BASIS OF PRESENTATION	12 Months Ended
	Sep. 30, 2014
BASIS OF PRESENTATION [Abstract]
BASIS OF PRESENTATION	NOTE 1: BASIS OF PRESENTATION Arkanova Energy Corporation (formerly Alton Ventures, Inc.) (“Arkanova” or the “Company”) was incorporated in the state of Nevada on September 6, 2001 to engage in the acquisition, exploration and development of mineral properties. On May 21, 2013, the Nevada Secretary of State accepted for filing the articles of dissolution for the subsidiary Arkanova Development, LLC. Balances remaining were transferred to the intercompany accounts.

GOING CONCERN

GOING CONCERN	12 Months Ended
	Sep. 30, 2014
GOING CONCERN [Abstract]
GOING CONCERN	NOTE 2: GOING CONCERN Arkanova is primarily engaged in the acquisition, exploration and development of oil and gas resource properties. Arkanova has incurred losses of $31,070,998 since inception and has a negative working capital of $712,722 at September 30, 2014. Management plans to raise additional capital through equity and/or debt financings. These factors raise substantial doubt regarding Arkanova’s ability to continue as a going concern.

SUMMARY OF SIGNFICANT ACCOUNTIN

SUMMARY OF SIGNFICANT ACCOUNTING POLICIES	12 Months Ended
	Sep. 30, 2014
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 3: SUMMARY OF SIGNFICANT ACCOUNTING POLICIES a) Basis of Accounting The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. These consolidated statements include the accounts of the Company and its wholly-owned subsidiaries, Arkanova Acquisition Corp. and Provident Energy Associates of Montana, LLC. All significant intercompany transactions and balances have been eliminated. The Company has a September 30 year-end. b) Use of Estimates The preparation of consolidated financial statements in accordance with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to useful life and recoverability of long-lived assets, stock-based compensation expense, deferred income tax asset valuations and loss contingencies. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. c) Cash and Cash Equivalents For purposes of the statement of cash flows, Arkanova considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. d) Basic and Diluted Net Income (Loss) Per Share Arkanova computes net income (loss) per share in accordance with ASC 260, Earnings per Share e) Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, oil and gas receivables, other receivables, accounts payable and accrued liabilities, due to related party, loans payable, and notes payable. Pursuant to ASC 820, Fair Value Measurements and Disclosures Financial Instruments f) Property and Equipment Property and equipment consists of computer hardware, office furniture and equipment, vehicle, exploration equipment, computer software and leasehold improvements and is recorded at cost, less accumulated depreciation. Property and equipment is amortized on a straight-line basis over its estimated life: Computer hardware 3 years Office furniture and equipment 5 years Vehicle 5 years Exploration equipment 5 years Computer software 1 year Leasehold improvements 5 years g) Revenue Recognition The Company recognizes oil and gas revenue when production is sold at a fixed or determinable price, persuasive evidence of an arrangement exists, delivery has occurred and title has transferred, and collectability is reasonably assured. h) Accounts Receivable Accounts receivable are generally reported net of an allowance for uncollectible accounts. The allowance for uncollectible accounts is determined based on past collection experience and an analysis of outstanding balances. As of September 30, 2014, Arkanova has not recorded an allowance as all receivables are deemed collectable at this time. i) Oil and Gas Properties Arkanova utilizes the full-cost method of accounting for petroleum and natural gas properties. Under this method, Arkanova capitalizes all costs associated with acquisition, exploration and development of oil and natural gas reserves, including leasehold acquisition costs, geological and geophysical expenditures, lease rentals on undeveloped properties and costs of drilling of productive and non-productive wells into the full cost pool on a country by country basis. As of September 30, 2014, Arkanova had properties with proven reserves. When Arkanova obtains proven oil and gas reserves, capitalized costs, including estimated future costs to develop the reserves proved and estimated abandonment costs, net of salvage, will be depleted on the units-of-production method using estimates of proved reserves. The costs of unproved properties are not amortized until it is determined whether or not proved reserves can be assigned to the properties. Arkanova assesses the property at least quarterly to ascertain whether impairment has occurred. In assessing impairment Arkanova performs a ceiling test calculation and considers factors such as historical experience and other data such as primary lease terms of the property, average holding periods of unproved property, and geographic and geologic data. During the year ended September 30, 2014 an impairment of $630,787 (2013 - $519,125) was recorded. j) Asset Retirement Obligations Arkanova accounts for asset retirement obligations in accordance with ASC 410-20, Asset Retirement Obligations k) Long-lived Assets In accordance with ASC 360, Property, Plant and Equipment l) Concentration of Risk Arkanova maintains its cash accounts in a commercial bank located in Texas, United States. Arkanova's cash accounts are uninsured and insured business checking accounts and deposits maintained in U.S. dollars. As at September 30, 2014, Arkanova has not engaged in any transactions that would be considered derivative instruments on hedging activities. m) Comprehensive Loss ASC 220, Comprehensive Income n) Income Taxes Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. Arkanova has adopted ASC 740, Income Taxes o) Fair value Accounting standards regarding fair value of financial instruments define fair value, establish a three-level hierarchy which prioritizes and defines the types of inputs used to measure fair value, and establish disclosure requirements for assets and liabilities presented at fair value on the consolidated balance sheets. Fair value is the amount that would be received from the sale of an asset or paid for the transfer of a liability in an orderly transaction between market participants. A liability is quantified at the price it would take to transfer the liability to a new obligor, not at the amount that would be paid to settle the liability with the creditor. The three-level hierarchy is as follows: - Level 1 inputs consist of unadjusted quoted prices for identical instruments in active markets. - Level 2 inputs consist of quoted prices for similar instruments. - Level 3 valuations are derived from inputs which are significant and unobservable and have the lowest priority. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The carrying amounts reported in the balance sheet for cash, oil and gas receivables, other receivables, accounts payable and accrued liabilities, due to related party, loans payable, and notes payable approximate their fair market value based on the short-term maturity of these instruments. p) Stock-based Compensation The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Based Compensation Equity Based Payments to Non-Employees q) Recent Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

SHORT TERM INVESTMENT

SHORT TERM INVESTMENT	12 Months Ended
	Sep. 30, 2014
SHORT TERM INVESTMENT [Abstract]
SHORT TERM INVESTMENT	NOTE 4: SHORT TERM INVESTMENT On November 22, 2013, the Company invested in a deposit for $25,000 (September 30, 2013 - $15,000). The term of the investment is 12 months, maturing on November 22, 2014 and bears interest at a rate of 0.5% annually. Interest earned on the investment up to September 30, 2014 is $94. The investment is to secure a letter to the US Environmental Protection Agency for $23,595 for one of the Company’s wells.

PREPAID EXPENSES

PREPAID EXPENSES	12 Months Ended
	Sep. 30, 2014
PREPAID EXPENSES [Abstract]
PREPAID EXPENSES	NOTE 5: PREPAID EXPENSES At September 30, 2014, the Company has $609,512 (2013 - $299,147) of prepaid expenses and other assets. This balance consists of the following items: 2014 2013 Aton receivable $ 135,231 $ 67,431 Employee receivable – 750 Knightwall receivable 462,550 225,249 Prepaid expenses 11,731 5,717 $ 609,512 $ 299,147

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT	12 Months Ended
	Sep. 30, 2014
PROPERTY AND EQUIPMENT [Abstract]
PROPERTY AND EQUIPMENT	NOTE 6: PROPERTY AND EQUIPMENT September 30, September 30, 2014 2013 Accumulated Net Carrying Net Carrying Cost Depreciation Value Value Computer hardware $ 10,440 $ 6,301 $ 4,139 $ – Exploration equipment 431,074 171,375 259,699 203,420 Leasehold improvements 17,100 10,669 6,431 9,851 Office furniture and equipment 25,225 22,221 3,004 477 Vehicle 156,057 124,938 31,119 59,833 $ 639,896 $ 335,504 $ 304,392 $ 273,581 During the year ended September 30, 2014, the Company purchased $138,954 (2013 - $102,586) of property and equipment.

OIL AND GAS INTERESTS

OIL AND GAS INTERESTS	12 Months Ended
	Sep. 30, 2014
OIL AND GAS INTERESTS [Abstract]
OIL AND GAS INTERESTS	NOTE 7: OIL AND GAS INTERESTS Arkanova is currently participating in oil and gas exploration activities in Colorado and Montana. All of Arkanova’s oil and gas properties are located in the United States. Proven and Developed Properties, Arkansas and Colorado and Montana During the year ended September 30, 2014, the Company incurred costs of $708,818 that were capitalized to their oil and gas properties. At September 30, 2014, the carrying value of the evaluated oil and gas properties exceeded the present value of the estimated future net revenue; therefore, an impairment of $630,787 (2013 - $519,125) was recorded. The carrying value of Arkanova’s evaluated oil and gas properties at September 30, 2014 and 2013 was $725,240 and $1,066,680, respectively. At September 30, 2014, the Company holds $812,114 of project advances shown as a current liability on the consolidated balance sheet. These funds were received from the other working interest partners and will be used for costs incurred on the waterflood project.

EARNINGS (LOSS) PER SHARE

EARNINGS (LOSS) PER SHARE	12 Months Ended
	Sep. 30, 2014
EARNINGS (LOSS) PER SHARE [Abstract]
EARNINGS (LOSS) PER SHARE	NOTE 8: EARNINGS (LOSS) PER SHARE A reconciliation of the components of basic and diluted net income per common share is presented in the tables below: For the Year Ended September 30, 2014 2013 Weighted Weighted Average Average Common Common Income Shares Per Income Shares Per (Loss) Outstanding Share (Loss) Outstanding Share Basic: Income (loss) attributable to common stock $ (3,005,041 ) 52,878,000 $ (0.06 ) $ (2,731,936 ) 48,865,000 $ (0.06 ) Effective of Dilutive Securities: Stock options and other – – – – – – Diluted: Income (loss) attributable to common stock, including assumed conversions $ (3,005,041 ) 52,878,000 $ (0.06 ) $ (2,731,936 ) 48,865,000 $ (0.06 )

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	12 Months Ended
	Sep. 30, 2014
RELATED PARTY TRANSACTIONS [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 9: RELATED PARTY TRANSACTIONS (a) At September 30, 2014, the Company owed backpay of $5,000 (2013 - $145,000) to the President of the Company and $33,029 (2013 - $120,029) to the CFO of the Company. (b) On March 1, 2014, the Company granted 300,000 options to the Company’s CEO, 300,000 options to the Company’s CFO, 300,000 options to a director and 700,000 options to employees. The fair value of the stock options granted was $62,100. (c) During the year ended September 30, 2012, the Company received a $400,000 loan and two $200,000 loans from the President of the Company, which are non-interest bearing. The $400,000 loan was to be repaid by September 30, 2012. The two $200,000 loans have no terms of repayment. On July 5, 2012, the Company repaid one of the $200,000 loans. On October 4, 2012, the Company repaid the $400,000 loan and the remaining $200,000 loan.

NOTES PAYABLE

NOTES PAYABLE	12 Months Ended
	Sep. 30, 2014
Notes Payable [Abstract]
NOTES PAYABLE	NOTE 10: NOTES PAYABLE (a) On July 1, 2012, the Company’s subsidiary entered into a Loan Modification Agreement to borrow an additional $1,000,000 and consolidate its 2011 Note into one promissory note in the principal amount for $8,315,000 (the “2012 Note”), including accrued interest of $315,000. The 2012 Note bears interest at 6% per annum, is due on June 30, 2013, and, as was the case with the 2011 Note, is secured by our guarantee and also a pledge of all of Acquisition’s interest in its wholly owned subsidiary, Provident. Interest on the 2012 Note shall be paid within 10 business days following the maturity date in shares of common stock of the Company. The number of shares of common stock shall be determined by dividing $498,900 by the average stock price of the Company over the 15 business day period immediately preceding the maturity date. On October 3, 2012, the Company received the additional $1,000,000 from the note holder. Arkanova evaluated the application of ASC 470-50 and ASC 470-60 and determined that the 2011 Note and 2012 Note were not substantially different. As a result, it was concluded that the revised terms constituted a debt modification rather than a debt extinguishment. On February 6, 2013, the Company’s subsidiary entered into a Loan Modification Agreement to borrow an additional $1,500,000 and consolidate its 2012 Note into one promissory note in the principal amount for $10,106,025 (the “2013 Note”), including accrued interest of $291,025. The 2013 Note bears interest at 6% per annum, is due on March 31, 2014, and, as was the case with the 2012 Note, is secured by our guarantee and also a pledge of all of Acquisition’s interest in its wholly owned subsidiary, Provident. Interest on the 2013 Note shall be paid within 10 business days following the maturity date in shares of common stock of the Company. The number of shares of common stock shall be determined by dividing $707,422 by the average stock price of the Company over the 15 business day period immediately preceding the maturity date. On February 6, 2013, the Company received $500,000 of the $1,500,000 funding from the note holder. The balance of $1,000,000 was received by the Company on June 4, 2013. Arkanova evaluated the application of ASC 470-50 and ASC 470-60 and determined that the 2012 Note and 2013 Note were not substantially different. As a result, it was concluded that the revised terms constituted a debt modification rather than a debt extinguishment. On November 15, 2013, the Company’s subsidiary entered into a Loan Modification Agreement to borrow an additional $1,705,000 for a total amount of $11,811,025, extend the maturity date from March 31, 2014 to December 31, 2015, and converted outstanding accrued interest of $466,815 into 4,668,152 shares of common stock at a deemed price of $0.10 per share. The common shares were issued on January 10, 2014. Refer to Note 11. Arkanova evaluated the November 15, 2013 modification under the guidance found in ASC 470-50 and ASC 470-60 and determined that the carrying value of the 2012 Note did not exceed the total future cash payments of the 2013 Note and that the notes were not substantially different. As a result, it was concluded that the revised terms constituted a debt modification rather than a debt extinguishment and no gain or loss was recorded. On November 1, 2014, the Company’s subsidiary entered into a Loan Modification Agreement to borrow an additional $2,475,000 for a total amount of $14,963,861, extend the maturity date from December 31, 2015 to December 31, 2016. Refer to Note 18(c). (b) On November 24, 2009, the Company entered into a loan agreement in the amount of $56,303 to purchase equipment. The loan bears interest at 7.69% and is to be repaid in 48 equal monthly installments commencing December 30, 2009. During the year ended September 30, 2014, the Company repaid a principal amount of $2,707. The balance of the loan is $0 at September 30, 2014. (c) On June 25, 2013, the Company entered into a loan agreement in the amount of $79,300 to purchase equipment. The loan bears interest at 3.95% and is to be repaid in 48 equal monthly installments commencing July 28, 2013. During the year ended September 30, 2014, the Company repaid a principal amount of $18,860. The balance of the loan is $55,867 at September 30, 2014. The following principal payments for notes payable are required: 2015 $ 19,618 2016 $ 11,831,432 2017 $ 15,842

COMMON STOCK

COMMON STOCK	12 Months Ended
	Sep. 30, 2014
COMMON STOCK NOTE [Abstract]
COMMON STOCK	NOTE 11: COMMON STOCK Common stock a) On January 10, 2014, Arkanova issued 4,668,152 shares of common stock to Aton Select Funds Limited as an interest payment for outstanding interest of $466,815. b) On December 14, 2012, Arkanova issued 2,000,000 shares of common stock at $0.10 per share to the President of the Company for cash proceeds of $200,000. c) On December 26, 2012, Arkanova issued 1,000,000 shares of common stock at $0.10 per share to the President of the Company for cash proceeds of $100,000. Stock Options On April 25, 2007, Arkanova adopted a stock option plan named the 2007 Stock Option Plan (the “Plan”), the purpose of which is to attract and retain the best available personnel and to provide incentives to employees, officers, directors and consultants, all in an effort to promote the success of Arkanova. Prior to the grant of options under the 2007 Stock Option Plan, there were 5,000,000 shares of Arkanova’s common stock available for issuance under the plan. On July 17, 2010, Arkanova amended and restated the 2008 Amended Stock Option Plan to revise the termination provision for vested Non-Qualified Stock Options. The termination date of vested Non-Qualified Stock Options was extended from a period of three months to a period of one year. On March 1, 2014, the Company granted 1,600,000 stock options valued at $62,100 with immediate vesting to directors, officers, and employees to acquire 1,600,000 common shares at an exercise price of $0.10 per share expiring in 5 years. The grant date fair value of the options using the Black-Scholes option pricing model was $0.04. The fair value of each option grant was estimated on the date of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: Year Year Ended Ended September 30, September 30, 2014 2013 Expected dividend yield 0.00% 0.00% Expected volatility 209% 175% Expected life (in years) 5.00 5.00 Risk-free interest rate 1.51% 1.60% During the year ended September 30, 2014 and 2013, no stock options were exercised. Stock-based compensation of $101,967 (2013 - $22,832) was recorded for the year ended September 30, 2014. During the year ended September 30, 2014, no stock options (2013 – 1,303,333) expired unexercised and no stock options (2013 – 250,000) were forfeited. A summary of Arkanova’s stock option activity is as follows: Weighted Average Aggregate Number of Weighted Average Remaining Intrinsic Options Exercise Price Contractual Term Value Outstanding, September 30, 2012 4,653,333 $ 0.27 Granted 100,000 0.24 Forfeited (250,000 ) 0.31 Expired (1,303,333 ) 0.37 Outstanding, September 30, 2013 3,200,000 $ 0.22 Granted 1,600,000 $ 0.10 Expired – – Outstanding, September 30, 2014 4,800,000 $ 0.10* Exercisable, September 30, 2014 4,800,000 $ 0.10* 4.56 $ – * On November 15, 2013, Arkanova amended the terms of the outstanding stock options to decrease the exercise price from $0.12 - $0.25 to $0.10 and extend the expiry dates from November 19, 2013 – October 8, 2015 to September 30, 2018 – December 31, 2018. The weighted average grant date fair value of the modified stock options was $0.01 and the original stock-based compensation expense recognized of $101,967 was increased by an additional stock-based compensation expense of $39,867 related to the modification. The fair value of each option amendment was estimated on the date of the amendment using the Black-Scholes option pricing model with the following weighted average assumptions: Pre - Post - Amendment Amendment Expected dividend yield 0.00% 0.00% Expected volatility 214% 214% Expected life (in years) 1.42 5.12 Risk-free interest rate 0.23% 1.36% At September 30, 2014, there was $0 of unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the Plan. There was $0 intrinsic value associated with the outstanding options at September 30, 2014. Warrants A summary of the changes in the Company’s common share purchase warrants is presented below: Weighted Weighted Average Number of Average Remaining Aggregate Warrants Exercise Price Contractual Term Intrinsic Value Outstanding, September 30, 2012 1,168,235 $ 0.48 Expired (1,068,235 ) $ 0.43 Outstanding, September 30, 2013 100,000 $ 1.00 Expired (100,000 ) 1.00 Outstanding, September 30, 2014 – $ – – $ –

DERIVATIVE INSTRUMENTS

DERIVATIVE INSTRUMENTS	12 Months Ended
	Sep. 30, 2014
DERIVATIVE INSTRUMENTS [Abstract]
DERIVATIVE INSTRUMENTS	NOTE 12: DERIVATIVE INSTRUMENTS In June 2008, the FASB ratified ASC 815-15, Derivatives and Hedging – Embedded Derivatives On March 19, 2008 (the “Closing Date”), pursuant to the John Thomas Bridge & Opportunity Fund Warrant Agreement (the “Warrant Agreement”), Arkanova issued common stock purchase warrants to purchase up to 250,000 additional shares of common stock (the “Warrants”). The initial exercise price of the Warrants is $0.65 per share, subject to adjustment therein, with a term of exercise equal to 5 years. The Warrants are subject to adjustment pursuant to certain events, including a full ratchet reset feature. Additionally, the number of shares of common stock to be received upon the exercise of the Warrants (the “Warrant Shares”) and the exercise price of the Warrants are subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the common stock that occur after the Closing Date. The warrants issued during the year ended September 30, 2008 are not afforded equity treatment because these warrants have a down-round ratchet provision on the exercise price. As a result, the warrants are not considered indexed to the Company’s own stock, and as such, the fair value of the derivative liability is reflected on the balance sheet and all future changes in the fair value of these warrants are recognized currently in earnings in the consolidated statement of operations under the caption “Gain (loss) on derivative liability” until such time as the warrants are exercised or expire. The total fair values of the warrants at the end of each period were determined using a lattice model and the changes in fair value were recognized in the consolidated statements of operations. The warrants were valued at each period end until they expire using a multi-nominal lattice model with the following assumptions: The 5 year warrants issued to the investor on March 19, 2008 included 250,000 warrants adjusted to 601,852 with an exercise price of $0.65 reset to $0.27 in 2009 and reset from 601,852 to 738,636 shares following the October 11, 2011 reset to an exercise price of $0.22; and adjusted from 738,636 to 773,810 shares following Q3 2012 reset to an exercise price of $0.21. The stock price would fluctuate with Company projected volatility. The stock price would fluctuate with an annual volatility. The projected volatility curve was based on historical volatilities of the Company for the valuation periods. The Holder would not exercise the warrant as they become exercisable (effective registration is projected 4 months from issuance) at target price of 2 times the projected reset price or higher but would hold the warrants to maturity. The Holder would exercise the warrant at maturity if the stock price was above the project reset prices. A 10% probability of a reset event and a projected financing each year in December and June at prices approximating 100% of market. No warrants have been exercised or expired. The impact of ASC 815-15 for the year ending September 30, 2013 resulted in a decrease in the derivative liability of $2,919 with a corresponding gain of $2,919 on derivative instruments. On March 31, 2013, the purchase warrants expired and the fair value of the derivative liability was $0.

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	12 Months Ended
	Sep. 30, 2014
FAIR VALUE MEASUREMENTS [Abstract]
FAIR VALUE MEASUREMENTS	NOTE 13: FAIR VALUE MEASUREMENTS ASC 825 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Fair Value Hierarchy ASC 825 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 825 establishes three levels of inputs that may be used to measure fair value. Level 1 Level 1 applies to assets and liabilities for which there are quoted prices in active markets for identical assets or liabilities. Valuations are based on quoted prices that are readily and regularly available in an active market and do not entail a significant degree of judgment. Level 2 Level 2 applies to assets and liabilities for which there are other than Level 1 observable inputs such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 2 instruments require more management judgment and subjectivity as compared to Level 1 instruments. For instance: Determining which instruments are most similar to the instrument being priced requires management to identify a sample of similar securities based on the coupon rates, maturity, issuer, credit rating and instrument type, and subjectively select an individual security or multiple securities that are deemed most similar to the security being priced; and Determining whether a market is considered active requires management judgment. Level 3 Level 3 applies to assets and liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The determination of fair value for Level 3 instruments requires the most management judgment and subjectivity. The Company believes that the recorded values of all of the other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations.

COMMITMENTS

COMMITMENTS	12 Months Ended
	Sep. 30, 2014
COMMITMENTS [Abstract]
COMMITMENTS	NOTE 14: COMMITMENTS See Note 10. (a) The Company, as an owner or lessee and operator of oil and gas properties, is subject to various federal, state and local laws and regulations relating to discharge of materials into, and protection of, the environment. These laws and regulations may, among other things, impose liability on the lessee under an oil and gas lease for the cost of pollution clean-up resulting from operations and subject the lessee to liability for pollution damages. In some instances, the Company may be directed to suspend or cease operations in the affected area. The Company maintains insurance coverage, which it believes is customary in the industry, although the Company is not fully insured against all environmental risks. The Company is not aware of any environmental claims existing as of September 30, 2014, which have not been provided for, covered by insurance or otherwise have a material impact on its financial position or results of operations. There can be no assurance, however, that current regulatory requirements will not change, or past noncompliance with environmental laws will not be discovered on the Company’s properties. (b) On June 10, 2011, the Company commenced a lease agreement for a period of 62 months. The monthly base rate begins at $2,750 and increases every 12 months at the average rate of $2,883 per month over the term of the lease. Lease expense for the year was $58,548 (2013 - $54,648). Lease payments at the monthly base rate for the remainder of the lease term are as follows: 2015 $ 37,354 2016 $ 32,083 (c) On December 14, 2012, the Company reached a preliminary settlement with Ms. Billie Eustice, whereby it is contemplated that the Company will pay Ms. Eustice $150,000 over four years beginning January 28, 2013 in 48 equal monthly installments in settlement of all outstanding matters and issues between Ms. Eustice and the Company, including the balance owing on the consulting agreement in the amount of $125,000, oil barrels in the tanks at time of purchase, and a refund of $12,000 that was a tax refund prior to the purchase of Provident Energy and cashed by Provident Energy after the purchase. During the year ended September 30, 2013, the Company recorded a loss of $29,165 on settlement of debt which represents the difference between the amount recorded in accounts payable before the settlement and the agreed settlement amount of $150,000. During the year ended September 30, 2014, the Company repaid a total of $37,500 (2013 - $28,125) to Ms. Eustice. At September 30, 2014, there is a total balance owing of $84,375 of which $37,500 is current and $46,875 is long term. The following principal payments are required: 2015 $ 37,500 2016 $ 37,500 2017 $ 9,375

ASSET RETIREMENT OBLIGATION

ASSET RETIREMENT OBLIGATION	12 Months Ended
	Sep. 30, 2014
ASSET RETIREMENT OBLIGATION [Abstract]
ASSET RETIREMENT OBLIGATION	NOTE 15: ASSET RETIREMENT OBLIGATION Changes in Arkanova’s asset retirement obligations were as follows: Year Ended Year Ended September 30, September 30, 2014 2013 Asset retirement obligations, beginning of period $ 135,888 $ 123,827 Accretion expense 13,236 12,061 Asset retirement obligations, end of period $ 149,124 $ 135,888

SUPPLEMENTAL CASH FLOW AND OTHE

SUPPLEMENTAL CASH FLOW AND OTHER DISCLOSURES	12 Months Ended
	Sep. 30, 2014
SUPPLEMENTAL CASH FLOW AND OTHER DISCLOSURES [Abstract]
SUPPLEMENTAL CASH FLOW AND OTHER DISCLOSURES	NOTE 16: SUPPLEMENTAL CASH FLOW AND OTHER DISCLOSURES Year Ended Year Ended September 30, September 30, 2014 2013 Supplemental Disclosures: Interest paid $ 2,631 $ 1,646 Income taxes paid $ – $ – Noncash Financing and Investing Activities Shares issued to settle accrued interest on note payable $ 466,815 Accrued interest converted into note payable $ – $ 291,025 Note payable related to capital expenditures $ – $ 79,300

INCOME TAXES

INCOME TAXES	12 Months Ended
	Sep. 30, 2014
INCOME TAXES [Abstract]
INCOME TAXES	NOTE 17: INCOME TAXES Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has incurred non-capital losses as scheduled below: Year of Year of Loss Amount Expiration 2006 $ 16,548 2026 2007 493,777 2027 2008 1,199,618 2028 2009 3,853,251 2029 2010 3,008,921 2030 2011 2,628,028 2031 2012 1,636,396 2032 2013 1,660,225 2033 2014 1,731,437 2034 $ 16,228,201 Pursuant to ASC 740, the Company is required to compute tax asset benefits for non-capital losses carried forward. Potential benefit of non-capital losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the losses carried forward in future years. Significant components of the Company’s deferred tax assets and liabilities, after applying enacted corporate income tax rates, are as follows: 2014 2012 Deferred income tax assets Net losses carried forward $ 5,679,870 $ 5,073,867 5,679,870 5,073,867 Valuation allowance (5,679,870 ) (5,073,867 ) Net deferred income tax asset $ – $ – The valuation allowance reflects the Company’s estimate that the tax assets, more likely than not, will not be realized and consequently have not been recorded in these financial statements

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	12 Months Ended
	Sep. 30, 2014
SUBSEQUENT EVENTS [Abstract]
SUBSEQUENT EVENTS	NOTE 18: SUBSEQUENT EVENTS (a) On October 1, 2014, the Company entered into a revised executive employment agreement with the Chief Executive Officer of the Company. The revised executive employment agreement replaced the agreement that was entered into on March 1, 2014. Pursuant to the terms of the revised executive employment agreement the Chief Executive Officer will receive an annual salary of $240,000 for a term of one year. The revised executive employment agreement will automatically renew if not terminated in writing by either party no less than sixty days prior to the expiration of the revised executive employment agreement. (b) On October 1, 2014, the Company entered into a revised executive employment agreement with the Chief Financial Officer of the Company. The revised executive employment agreement replaced the agreement that was entered into on March 1, 2014. Pursuant to the terms of the revised executive employment agreement the Chief Executive Officer will receive an annual salary of $175,000 for a term of one year. The revised executive employment agreement will automatically renew if not terminated in writing by either party no less than sixty days prior to the expiration of the revised executive employment agreement. (c) On November 1, 2014, the Company’s subsidiary entered into a Loan Modification Agreement to borrow an additional $2,475,000 for a total loan amount of $14,963,861 which includes accrued interest of $677,836. In addition the maturity date was extended from December 31, 2015 to December 31, 2016 and the ability of the Company to pay interest in shares of the Company’s common stock was terminated. Refer to Note 10(a).

SUPPLEMENTAL OIL AND GAS INFORM

SUPPLEMENTAL OIL AND GAS INFORMATION Capitalized Costs Related to Oil and Gas Producing Activities	12 Months Ended
	Sep. 30, 2014
SUPPLEMENTAL OIL AND GAS INFORMATION [Abstract]
SUPPLEMENTAL OIL AND GAS INFORMATION	NOTE 19: SUPPLEMENTAL OIL AND GAS INFORMATION Capitalized Costs Related to Oil and Gas Producing Activities September 30, September 30, 2014 2013 Evaluated oil and gas properties $ 19,107,823 $ 18,399,005 Less accumulated depletion and impairment (18,382,583 ) (17,332,325 ) Net capitalized costs for evaluated oil and gas properties $ 725,240 $ 1,066,680 Costs incurred in Oil and Gas Property Acquisition, Exploration and Development Activities September 30, September 30, 2014 2013 Evaluated Property Acquisition Costs $ – $ – Evaluated Exploration Costs 708,818 85,830 $ 708,818 $ 85,830 Results of Operations from Oil and Gas Producing Activities September 30, September 30, 2014 2013 Revenue $ 844,303 $ 849,916 Production costs (782,008 ) (780,958 ) Depletion, depreciation and amortization (419,471 ) (431,748 ) Impairment of oil and gas properties (630,787 ) (519,125 ) Loss from oil and gas operations $ (987,963 ) $ (881,915 ) Reserve Information The following estimates of proved reserve and proved developed reserve quantities and related standardized measure of discounted net cash flow are estimates only, and do not purport to reflect realizable values or fair market values of the Company’s reserves. The Company emphasizes that reserve estimates are inherently imprecise and that estimates of new discoveries are more imprecise than those of producing oil and gas properties. Accordingly, these estimates are expected to change as future information becomes available. All of the Company’s reserves are located in the United States. Future cash flows are computed by applying prices of oil which are based on the respective 12-month unweighted average of the first of the month prices to period end quantities of proved oil reserves. The 12-month unweighted average of the first of the month market prices used for the standardized measures below was $77.69/barrel and $78.77/barrel for liquids for September 30, 2014 and 2013. Future operating expenses and development costs are computed primarily by the Company’s petroleum engineers by estimating the expenditures to be incurred in developing and producing the Company’s proved natural gas and oil reserves at the end of the period, based on period end costs and assuming continuation of existing economic conditions. Future income taxes are based on period end statutory rates, adjusted for tax basis and applicable tax credits. A discount factor of ten percent was used to reflect the timing of future net cash flows. The standardized measure of discounted future net cash flows is not intended to represent the replacement cost of fair value of the Company’s natural gas and oil properties. An estimate of fair value would also take into account, among other things, the recovery of reserves not presently classified as proved, anticipated future changes in prices and costs, and a discount factor more representative of the time value of money and the risks inherent in reserve estimate of natural gas and oil producing operations. Proved Oil and Gas Reserve Quantities September 30, September 30, 2014 2013 Oil Oil (BBL) (BBL) Balance beginning of the year 38,170 87,678 Revisions of previous estimates 4,685 (39,726 ) Production (9,765 ) (9,782 ) Transfer of oil and gas interest – – Balance end of the year 33,090 38,170 Standardized Measure of Discounted Future Net Cash Flow September 30, September 30, 2014 2013 Future cash inflows $ 2,570,759 $ 3,006,650 Future production and development costs (1,437,698 ) (1,600,136 ) Future income tax expenses (396,571 ) (492,280 ) Future net cash flows 736,490 914,234 10% annual discount for estimated timing of cash flows (153,925 ) (220,893 ) Standardized measure of discounted future net cash flows $ 582,565 $ 693,341 Sources of Changes in Discounted Future Net Cash Flows September 30, September 30, 2014 2013 Standardized measure of discounted future net cash flows at the beginning of the year $ 693,341 $ 1,517,550 Accretion of discount 106,668 233,469 Development costs incurred 708,818 85,830 Changes in estimated development costs (699,208 ) (21,269 ) Revision of previous quantity estimates 131,757 (1,319,808 ) Net change in prices and production costs (604,275 ) (645,981 ) Net change in income taxes 59,649 443,805 Sales of oil and gas produced, net of production costs 18,705 12,042 Transfer of oil and gas interest – – Timing differences and other 167,110 387,703 Standardized measure of discounted future net cash flows at the end of the year $ 582,565 $ 693,341

SUMMARY OF SIGNFICANT ACCOUNT26

SUMMARY OF SIGNFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Sep. 30, 2014
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Basis of Accounting, Policy	a) Basis of Accounting The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. These consolidated statements include the accounts of the Company and its wholly-owned subsidiaries, Arkanova Acquisition Corp. and Provident Energy Associates of Montana, LLC. All significant intercompany transactions and balances have been eliminated. The Company has a September 30 year-end.
Use of Estimates, Policy	b) Use of Estimates The preparation of consolidated financial statements in accordance with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to useful life and recoverability of long-lived assets, stock-based compensation expense, deferred income tax asset valuations and loss contingencies. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
Cash and Cash Equivalents, Policy	c) Cash and Cash Equivalents For purposes of the statement of cash flows, Arkanova considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.
Basic and Diluted Net Income (Loss) Per Share, Policy	d) Basic and Diluted Net Income (Loss) Per Share Arkanova computes net income (loss) per share in accordance with ASC 260, Earnings per Share
Financial Instruments, Policy	e) Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, oil and gas receivables, other receivables, accounts payable and accrued liabilities, due to related party, loans payable, and notes payable. Pursuant to ASC 820, Fair Value Measurements and Disclosures Financial Instruments
Property and Equipment, Policy	f) Property and Equipment Property and equipment consists of computer hardware, office furniture and equipment, vehicle, exploration equipment, computer software and leasehold improvements and is recorded at cost, less accumulated depreciation. Property and equipment is amortized on a straight-line basis over its estimated life: Computer hardware 3 years Office furniture and equipment 5 years Vehicle 5 years Exploration equipment 5 years Computer software 1 year Leasehold improvements 5 years
Revenue Recognition, Policy	g) Revenue Recognition The Company recognizes oil and gas revenue when production is sold at a fixed or determinable price, persuasive evidence of an arrangement exists, delivery has occurred and title has transferred, and collectability is reasonably assured.
Accounts Receivable, Policy	h) Accounts Receivable Accounts receivable are generally reported net of an allowance for uncollectible accounts. The allowance for uncollectible accounts is determined based on past collection experience and an analysis of outstanding balances. As of September 30, 2014, Arkanova has not recorded an allowance as all receivables are deemed collectable at this time.
Oil and Gas Properties, Policy	i) Oil and Gas Properties Arkanova utilizes the full-cost method of accounting for petroleum and natural gas properties. Under this method, Arkanova capitalizes all costs associated with acquisition, exploration and development of oil and natural gas reserves, including leasehold acquisition costs, geological and geophysical expenditures, lease rentals on undeveloped properties and costs of drilling of productive and non-productive wells into the full cost pool on a country by country basis. As of September 30, 2014, Arkanova had properties with proven reserves. When Arkanova obtains proven oil and gas reserves, capitalized costs, including estimated future costs to develop the reserves proved and estimated abandonment costs, net of salvage, will be depleted on the units-of-production method using estimates of proved reserves. The costs of unproved properties are not amortized until it is determined whether or not proved reserves can be assigned to the properties. Arkanova assesses the property at least quarterly to ascertain whether impairment has occurred. In assessing impairment Arkanova performs a ceiling test calculation and considers factors such as historical experience and other data such as primary lease terms of the property, average holding periods of unproved property, and geographic and geologic data. During the year ended September 30, 2014 an impairment of $630,787 (2013 - $519,125) was recorded.
Asset Retirement Obligations, Policy	j) Asset Retirement Obligations Arkanova accounts for asset retirement obligations in accordance with ASC 410-20, Asset Retirement Obligations
Long-lived Assets, Policy	k) Long-lived Assets In accordance with ASC 360, Property, Plant and Equipment
Concentration of Risk, Policy	l) Concentration of Risk Arkanova maintains its cash accounts in a commercial bank located in Texas, United States. Arkanova's cash accounts are uninsured and insured business checking accounts and deposits maintained in U.S. dollars. As at September 30, 2014, Arkanova has not engaged in any transactions that would be considered derivative instruments on hedging activities.
Comprehensive Loss, Policy	m) Comprehensive Loss ASC 220, Comprehensive Income
Income Taxes, Policy	n) Income Taxes Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. Arkanova has adopted ASC 740, Income Taxes
Fair Value, Policy	o) Fair value Accounting standards regarding fair value of financial instruments define fair value, establish a three-level hierarchy which prioritizes and defines the types of inputs used to measure fair value, and establish disclosure requirements for assets and liabilities presented at fair value on the consolidated balance sheets. Fair value is the amount that would be received from the sale of an asset or paid for the transfer of a liability in an orderly transaction between market participants. A liability is quantified at the price it would take to transfer the liability to a new obligor, not at the amount that would be paid to settle the liability with the creditor. The three-level hierarchy is as follows: - Level 1 inputs consist of unadjusted quoted prices for identical instruments in active markets. - Level 2 inputs consist of quoted prices for similar instruments. - Level 3 valuations are derived from inputs which are significant and unobservable and have the lowest priority. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The carrying amounts reported in the balance sheet for cash, oil and gas receivables, other receivables, accounts payable and accrued liabilities, due to related party, loans payable, and notes payable approximate their fair market value based on the short-term maturity of these instruments.
Stock-based Compensation, Policy	p) Stock-based Compensation The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Based Compensation Equity Based Payments to Non-Employees
Recent Accounting Pronouncements, Policy	q) Recent Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

SUMMARY OF SIGNFICANT ACCOUNT27

SUMMARY OF SIGNFICANT ACCOUNTING POLICIES (Tables)	12 Months Ended
	Sep. 30, 2014
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Schedule of Property Plant and Equipment Useful Lives	Property and equipment is amortized on a straight-line basis over its estimated life: Computer hardware 3 years Office furniture and equipment 5 years Vehicle 5 years Exploration equipment 5 years Computer software 1 year Leasehold improvements 5 years

PREPAID EXPENSES (Tables)

PREPAID EXPENSES (Tables)	12 Months Ended
	Sep. 30, 2014
PREPAID EXPENSES [Abstract]
Schedule of Prepaid Expenses and Other Assets	At September 30, 2014, the Company has $609,512 (2013 - $299,147) of prepaid expenses and other assets. This balance consists of the following items: 2014 2013 Aton receivable $ 135,231 $ 67,431 Employee receivable – 750 Knightwall receivable 462,550 225,249 Prepaid expenses 11,731 5,717 $ 609,512 $ 299,147

PROPERTY AND EQUIPMENT (Tables)

PROPERTY AND EQUIPMENT (Tables)	12 Months Ended
	Sep. 30, 2014
PROPERTY AND EQUIPMENT [Abstract]
Schedule of property and equipment	September 30, September 30, 2014 2013 Accumulated Net Carrying Net Carrying Cost Depreciation Value Value Computer hardware $ 10,440 $ 6,301 $ 4,139 $ – Exploration equipment 431,074 171,375 259,699 203,420 Leasehold improvements 17,100 10,669 6,431 9,851 Office furniture and equipment 25,225 22,221 3,004 477 Vehicle 156,057 124,938 31,119 59,833 $ 639,896 $ 335,504 $ 304,392 $ 273,581

EARNINGS (LOSS) PER SHARE (Tabl

EARNINGS (LOSS) PER SHARE (Tables)	12 Months Ended
	Sep. 30, 2014
EARNINGS (LOSS) PER SHARE [Abstract]
Schedule of Earnings Per Share, Basic and Diluted	A reconciliation of the components of basic and diluted net income per common share is presented in the tables below: For the Year Ended September 30, 2014 2013 Weighted Weighted Average Average Common Common Income Shares Per Income Shares Per (Loss) Outstanding Share (Loss) Outstanding Share Basic: Income (loss) attributable to common stock $ (3,005,041 ) 52,878,000 $ (0.06 ) $ (2,731,936 ) 48,865,000 $ (0.06 ) Effective of Dilutive Securities: Stock options and other – – – – – – Diluted: Income (loss) attributable to common stock, including assumed conversions $ (3,005,041 ) 52,878,000 $ (0.06 ) $ (2,731,936 ) 48,865,000 $ (0.06 )

NOTES PAYABLE (Tables)

NOTES PAYABLE (Tables)	12 Months Ended
	Sep. 30, 2014
Notes Payable [Abstract]
Schedule of required principal payments for notes payable	The following principal payments for notes payable are required: 2015 $ 19,618 2016 $ 11,831,432 2017 $ 15,842

COMMON STOCK (Tables)

COMMON STOCK (Tables)	12 Months Ended
	Sep. 30, 2014
COMMON STOCK NOTE [Abstract]
Schedule of Stock Options, Valuation Assumptions	The fair value of each option grant was estimated on the date of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: Year Year Ended Ended September 30, September 30, 2014 2013 Expected dividend yield 0.00% 0.00% Expected volatility 209% 175% Expected life (in years) 5.00 5.00 Risk-free interest rate 1.51% 1.60%
Schedule of Stock Options Activity	A summary of Arkanova’s stock option activity is as follows: Weighted Average Aggregate Number of Weighted Average Remaining Intrinsic Options Exercise Price Contractual Term Value Outstanding, September 30, 2012 4,653,333 $ 0.27 Granted 100,000 0.24 Forfeited (250,000 ) 0.31 Expired (1,303,333 ) 0.37 Outstanding, September 30, 2013 3,200,000 $ 0.22 Granted 1,600,000 $ 0.10 Expired – – Outstanding, September 30, 2014 4,800,000 $ 0.10* Exercisable, September 30, 2014 4,800,000 $ 0.10* 4.56 $ – * On November 15, 2013, Arkanova amended the terms of the outstanding stock options to decrease the exercise price from $0.12 - $0.25 to $0.10 and extend the expiry dates from November 19, 2013 – October 8, 2015 to September 30, 2018 – December 31, 2018. The weighted average grant date fair value of the modified stock options was $0.01 and the original stock-based compensation expense recognized of $101,967 was increased by an additional stock-based compensation expense of $39,867 related to the modification.
Schedule of Stock Options, as Amended	The fair value of each option amendment was estimated on the date of the amendment using the Black-Scholes option pricing model with the following weighted average assumptions: Pre - Post - Amendment Amendment Expected dividend yield 0.00% 0.00% Expected volatility 214% 214% Expected life (in years) 1.42 5.12 Risk-free interest rate 0.23% 1.36%
Summary of Changes in Company's common share purchase warrants	A summary of the changes in the Company’s common share purchase warrants is presented below: Weighted Weighted Average Number of Average Remaining Aggregate Warrants Exercise Price Contractual Term Intrinsic Value Outstanding, September 30, 2012 1,168,235 $ 0.48 Expired (1,068,235 ) $ 0.43 Outstanding, September 30, 2013 100,000 $ 1.00 Expired (100,000 ) 1.00 Outstanding, September 30, 2014 – $ – – $ –

COMMITMENTS (Tables)

COMMITMENTS (Tables)	12 Months Ended
	Sep. 30, 2013
COMMITMENTS [Abstract]
Schedule of lease payments at the monthly base rate for the remainder of the lease term	Lease payments at the monthly base rate for the remainder of the lease term are as follows: 2015 $ 37,354 2016 $ 32,083
Schedule of principal payments required	The following principal payments are required: 2015 $ 37,500 2016 $ 37,500 2017 $ 9,375

ASSET RETIREMENT OBLIGATION (Ta

ASSET RETIREMENT OBLIGATION (Tables)	12 Months Ended
	Sep. 30, 2014
ASSET RETIREMENT OBLIGATION [Abstract]
Schedule of Changes in Asset Retirement Obligations	Changes in Arkanova’s asset retirement obligations were as follows: Year Ended Year Ended September 30, September 30, 2014 2013 Asset retirement obligations, beginning of period $ 135,888 $ 123,827 Accretion expense 13,236 12,061 Asset retirement obligations, end of period $ 149,124 $ 135,888

SUPPLEMENTAL CASH FLOW AND OT35

SUPPLEMENTAL CASH FLOW AND OTHER DISCLOSURES (Tables)	12 Months Ended
	Sep. 30, 2014
SUPPLEMENTAL CASH FLOW AND OTHER DISCLOSURES [Abstract]
Schedule of Cash Flow Supplemental Disclosures	Year Ended Year Ended September 30, September 30, 2014 2013 Supplemental Disclosures: Interest paid $ 2,631 $ 1,646 Income taxes paid $ – $ – Noncash Financing and Investing Activities Shares issued to settle accrued interest on note payable $ 466,815 Accrued interest converted into note payable $ – $ 291,025 Note payable related to capital expenditures $ – $ 79,300

INCOME TAXES (Tables)

INCOME TAXES (Tables)	12 Months Ended
	Sep. 30, 2014
INCOME TAXES [Abstract]
Schedule of non-capital losses	The Company has incurred non-capital losses as scheduled below: Year of Year of Loss Amount Expiration 2006 $ 16,548 2026 2007 493,777 2027 2008 1,199,618 2028 2009 3,853,251 2029 2010 3,008,921 2030 2011 2,628,028 2031 2012 1,636,396 2032 2013 1,660,225 2033 2014 1,731,437 2034 $ 16,228,201
Schedule of components of deferred tax assets and liabilities	Significant components of the Company’s deferred tax assets and liabilities, after applying enacted corporate income tax rates, are as follows: 2014 2012 Deferred income tax assets Net losses carried forward $ 5,679,870 $ 5,073,867 5,679,870 5,073,867 Valuation allowance (5,679,870 ) (5,073,867 ) Net deferred income tax asset $ – $ –

SUPPLEMENTAL OIL AND GAS INFO37

SUPPLEMENTAL OIL AND GAS INFORMATION (Tables)	12 Months Ended
	Sep. 30, 2014
SUPPLEMENTAL OIL AND GAS INFORMATION [Abstract]
Capitalized costs related to oil and gas producing activities	Capitalized Costs Related to Oil and Gas Producing Activities September 30, September 30, 2014 2013 Evaluated oil and gas properties $ 19,107,823 $ 18,399,005 Less accumulated depletion and impairment (18,382,583 ) (17,332,325 ) Net capitalized costs for evaluated oil and gas properties $ 725,240 $ 1,066,680
Costs incurred in oil and gas property acquisition, exploration and development activities	Costs incurred in Oil and Gas Property Acquisition, Exploration and Development Activities September 30, September 30, 2014 2013 Evaluated Property Acquisition Costs $ – $ – Evaluated Exploration Costs 708,818 85,830 $ 708,818 $ 85,830
Results of operations from oil and gas producing activities	Results of Operations from Oil and Gas Producing Activities September 30, September 30, 2014 2013 Revenue $ 844,303 $ 849,916 Production costs (782,008 ) (780,958 ) Depletion, depreciation and amortization (419,471 ) (431,748 ) Impairment of oil and gas properties (630,787 ) (519,125 ) Loss from oil and gas operations $ (987,963 ) $ (881,915 )
Proved oil and gas reserve quantities	Proved Oil and Gas Reserve Quantities September 30, September 30, 2014 2013 Oil Oil (BBL) (BBL) Balance beginning of the year 38,170 87,678 Revisions of previous estimates 4,685 (39,726 ) Production (9,765 ) (9,782 ) Transfer of oil and gas interest – – Balance end of the year 33,090 38,170
Standardized measure of discounted future net cash flow	Standardized Measure of Discounted Future Net Cash Flow September 30, September 30, 2014 2013 Future cash inflows $ 2,570,759 $ 3,006,650 Future production and development costs (1,437,698 ) (1,600,136 ) Future income tax expenses (396,571 ) (492,280 ) Future net cash flows 736,490 914,234 10% annual discount for estimated timing of cash flows (153,925 ) (220,893 ) Standardized measure of discounted future net cash flows $ 582,565 $ 693,341
Sources of changes in discounted future new cash flows	Sources of Changes in Discounted Future Net Cash Flows September 30, September 30, 2014 2013 Standardized measure of discounted future net cash flows at the beginning of the year $ 693,341 $ 1,517,550 Accretion of discount 106,668 233,469 Development costs incurred 708,818 85,830 Changes in estimated development costs (699,208 ) (21,269 ) Revision of previous quantity estimates 131,757 (1,319,808 ) Net change in prices and production costs (604,275 ) (645,981 ) Net change in income taxes 59,649 443,805 Sales of oil and gas produced, net of production costs 18,705 12,042 Transfer of oil and gas interest – – Timing differences and other 167,110 387,703 Standardized measure of discounted future net cash flows at the end of the year $ 582,565 $ 693,341

BASIS OF PRESENTATION (Narrativ

BASIS OF PRESENTATION (Narrative) (Details)	12 Months Ended
	Sep. 30, 2014
BASIS OF PRESENTATION [Abstract]
Date of incorporation (Date)	Sep. 6, 2001

GOING CONCERN (Narrative) (Deta

GOING CONCERN (Narrative) (Details) - USD ($)	Sep. 30, 2014	Sep. 30, 2013
GOING CONCERN [Abstract]
Losses since inception	$ 31,070,998	$ 28,065,957
Working capital	$ (712,722)

SUMMARY OF SIGNFICANT ACCOUNT40

SUMMARY OF SIGNFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($)	12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Impairment of oil and gas properties	$ 630,787	$ 519,125

SUMMARY OF SIGNFICANT ACCOUNT41

SUMMARY OF SIGNFICANT ACCOUNTING POLICIES (Schedule of Property and Equipment) (Details)	12 Months Ended
	Sep. 30, 2014
Computer hardware [Member]
Property, Plant, and Equipment [Line Items]
Property and equipment, useful life (in Duration)	3 years
Office furniture and equipment [Member]
Property, Plant, and Equipment [Line Items]
Property and equipment, useful life (in Duration)	5 years
Vehicle [Member]
Property, Plant, and Equipment [Line Items]
Property and equipment, useful life (in Duration)	5 years
Exploration equipment [Member]
Property, Plant, and Equipment [Line Items]
Property and equipment, useful life (in Duration)	5 years
Computer software [Member]
Property, Plant, and Equipment [Line Items]
Property and equipment, useful life (in Duration)	1 year
Leasehold improvements [Member]
Property, Plant, and Equipment [Line Items]
Property and equipment, useful life (in Duration)	5 years

SHORT TERM INVESTMENT (Narrativ

SHORT TERM INVESTMENT (Narrative) (Details) - USD ($)	10 Months Ended	12 Months Ended
	Sep. 30, 2014	Sep. 30, 2014	Sep. 30, 2013
SHORT TERM INVESTMENT [Abstract]
Short term investment, amount		$ 25,000	$ 15,000
Short term deposit investment, term (in Duration)		12 months
Investment, maturity date		Nov. 22, 2014
Investment, interest rate (in Percent)		50.00%
Interest earned on deposit	$ 94
Short term investment, amount of letter secured for one of the Company's wells	$ 23,595	$ 23,595

PREPAID EXPENSES (Narrative) (D

PREPAID EXPENSES (Narrative) (Details) - USD ($)	Sep. 30, 2014	Sep. 30, 2013
PREPAID EXPENSES [Abstract]
Prepaid expenses and other	$ 609,512	$ 299,147

PREPAID EXPENSES (Schedule of P

PREPAID EXPENSES (Schedule of Prepaid Expenses and Other Assets) (Details) - USD ($)	Sep. 30, 2014	Sep. 30, 2013
PREPAID EXPENSES [Abstract]
Aton receivable	$ 135,231	$ 67,431
Employee receivable		750
Knightwall receivable	$ 462,550	225,249
Prepaid expenses	11,731	5,717
Prepaid expenses and other	$ 609,512	$ 299,147

PROPERTY AND EQUIPMENT (Narrati

PROPERTY AND EQUIPMENT (Narrative) (Details) - USD ($)	12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
PROPERTY AND EQUIPMENT [Abstract]
Purchase of equipment	$ 138,954	$ 102,586

PROPERTY AND EQUIPMENT (Schedul

PROPERTY AND EQUIPMENT (Schedule of Property and Equipment) (Details) - USD ($)	Sep. 30, 2014	Sep. 30, 2013
Property, Plant, and Equipment [Line Items]
Property, plant and equipment, gross	$ 639,896
Property and equipment, net of accumulated depreciation and impairment	335,504	$ 255,032
Property, plant and equipment, net	304,392	$ 273,581
Computer hardware [Member]
Property, Plant, and Equipment [Line Items]
Property, plant and equipment, gross	10,440
Property and equipment, net of accumulated depreciation and impairment	6,301
Property, plant and equipment, net	4,139
Exploration equipment [Member]
Property, Plant, and Equipment [Line Items]
Property, plant and equipment, gross	431,074
Property and equipment, net of accumulated depreciation and impairment	171,375
Property, plant and equipment, net	259,699	$ 203,420
Leasehold improvements [Member]
Property, Plant, and Equipment [Line Items]
Property, plant and equipment, gross	17,100
Property and equipment, net of accumulated depreciation and impairment	10,669
Property, plant and equipment, net	6,431	9,851
Vehicle [Member]
Property, Plant, and Equipment [Line Items]
Property, plant and equipment, gross	156,057
Property and equipment, net of accumulated depreciation and impairment	124,938
Property, plant and equipment, net	31,119	59,833
Office furniture and equipment [Member]
Property, Plant, and Equipment [Line Items]
Property, plant and equipment, gross	25,225
Property and equipment, net of accumulated depreciation and impairment	22,221
Property, plant and equipment, net	$ 3,004	$ 477

OIL AND GAS INTERESTS (Narrativ

OIL AND GAS INTERESTS (Narrative) (Details) - USD ($)	12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Proven and Developed Properties, Arkansas and Colorado and Montana
Impairment of oil and gas properties	$ 630,787	$ 519,125
Carrying value of evaluated oil and gas properties	725,240	$ 1,066,680
Project advances	812,114
Property, Plant, and Equipment [Line Items]
Costs incurred in oil and gas property, acquisition, exploration and development activities	$ 708,818	$ 85,830

EARNINGS (LOSS) PER SHARE (Sche

EARNINGS (LOSS) PER SHARE (Schedule of Earnings Per Share, Basic and Diluted) (Details) - USD ($)	12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Basic:
Income (loss) attributable to common stock	$ (3,005,041)	$ (2,731,936)
Basic weighted average common shares outstanding (in Shares)	52,878,000	48,865,000
Basic per share (in Dollars per share)	$ (0.06)	$ (0.06)
Effective of Dilutive Securities:
Stock options and other, income (loss)
Stock options and other, weighted average common shares outstanding (in Shares)
Stock options and other, per share (in Dollars per Share)
Diluted:
Income (loss) attributable to common stock, including assumed conversions	$ (3,005,041)	$ (2,731,936)
Diluted weighted average common shares outstanding (in Shares)	52,878,000	48,865,000
Diluted per share (in Dollars per share)	$ (0.06)	$ (0.06)

RELATED PARTY TRANSACTIONS (Nar

RELATED PARTY TRANSACTIONS (Narrative) (Details) - USD ($)	Mar. 01, 2014	Mar. 01, 2013	Oct. 04, 2012	Jul. 05, 2012	Sep. 30, 2012	Sep. 30, 2014	Sep. 30, 2013
Related Party Transaction [Line Items]
Number of options, Granted (in Shares)		1,600,000
Fair value of options granted		$ 62,100
President [Member]
Related Party Transaction [Line Items]
Management fees owed						$ 5,000	$ 145,000
President [Member] | Loan One of Three [Member]
Related Party Transaction [Line Items]
Proceeds from loan from officer					$ 400,000
Debt instrument, maturity date (Date)					Sep. 30, 2012
Repayment of loan from officer			$ 400,000
President [Member] | Loan Two of Three [Member]
Related Party Transaction [Line Items]
Proceeds from loan from officer					$ 200,000
Repayment of loan from officer				$ 200,000
President [Member] | Loan Three of Three [Member]
Related Party Transaction [Line Items]
Proceeds from loan from officer					$ 200,000
Repayment of loan from officer			$ 200,000
Chief Financial Officer [Member]
Related Party Transaction [Line Items]
Number of options, Granted (in Shares)	300,000
Management fees owed						$ 33,029	$ 120,029
Chief Executive Officer [Member]
Related Party Transaction [Line Items]
Number of options, Granted (in Shares)	300,000
CEO And CFO [Member]
Related Party Transaction [Line Items]
Fair value of options granted	$ 23,289
Employee Stock Option [Member]
Related Party Transaction [Line Items]
Number of options, Granted (in Shares)	700,000
Director [Member]
Related Party Transaction [Line Items]
Number of options, Granted (in Shares)	300,000

NOTES PAYABLE (Narrative) (Deta

NOTES PAYABLE (Narrative) (Details)	Nov. 15, 2014USD ($)	Jan. 10, 2014USD ($)shares	Nov. 15, 2013USD ($)$ / sharesshares	Jun. 30, 2013USD ($)$ / shares	Jun. 04, 2013USD ($)	Feb. 06, 2013USD ($)	Oct. 03, 2012USD ($)	Jul. 01, 2012USD ($)	Nov. 24, 2009USD ($)$ / shares	Jun. 04, 2013USD ($)	Sep. 30, 2014USD ($)
Long Term Deby By Maturity [Abstract]
Required principal payments in next twelve months											$ 19,618
Required principal payments in year two											11,831,432
Required principal payments in year three											15,842
First loan agreement to purchase equipment [Member]
Debt Instrument [Line Items]
Proceeds from issuance of debt									$ 56,303
Debt interest rate (in Percent)									7.69%
Debt instrument, number of equal monthly payments (in Duration) | $ / shares									48
Debt instrument, amount outstanding											0
Repayments of debt											2,707
Subsequent Event [Line Items]
Proceeds from issuance of debt									$ 56,303
Debt instrument, amount outstanding											0
Second loan agreement to purchase equipment [Member]
Debt Instrument [Line Items]
Proceeds from issuance of debt				$ 79,300
Debt interest rate (in Percent)				3.95%
Debt instrument, number of equal monthly payments (in Duration) | $ / shares				48
Debt instrument, amount outstanding											55,867
Repayments of debt											18,860
Subsequent Event [Line Items]
Proceeds from issuance of debt				$ 79,300
Debt instrument, amount outstanding											55,867
Loan Modification Agreement [Member]
Debt Instrument [Line Items]
Proceeds from issuance of debt					$ 1,000,000	$ 500,000	$ 1,000,000	$ 1,000,000		$ 1,500,000
Debt interest rate (in Percent)						6.00%		6.00%
Debt instrument, amount outstanding						$ 10,106,025		$ 8,315,000
Accrued interest included in new debt						291,025		$ 315,000
Debt instrument, maturity date (Date)								Jun. 30, 2013
Days from maturity within which note interest must be repaid in shares of commom stock (in Duration)								10 days
Determination of shares to be issued for interest, numerator value to be divided by average stock price over fifteen day period immediately preceding maturity date								$ 498,900
Number of days over which stock price is to be averaged as denominator to determine shares issuable in payment of interest (in Duration)								15 days
Subsequent Event [Line Items]
Proceeds from issuance of debt					$ 1,000,000	500,000	$ 1,000,000	$ 1,000,000		$ 1,500,000
Debt instrument, amount outstanding						$ 10,106,025		$ 8,315,000
Loan Modification Conversion Agreement [Member]
Debt Instrument [Line Items]
Proceeds from issuance of debt			$ 1,705,000
Debt instrument, issuance date (in Date)			Nov. 15, 2013
Debt instrument, amount outstanding											11,811,025
Debt instrument, maturity date, pre-modification (in Date)			Mar. 31, 2014
Debt instrument, maturity date, post-modification (in Date)			Dec. 31, 2015
Debt conversion, original debt amount		$ 466,815	$ 466,815
Debt conversion, shares issued (in Shares) | shares		4,668,152	4,668,152
Debt conversion converted instrument price per share (in Dollars per Share) | $ / shares			$ 0.10
Gain recognized on troubled debt restructuring			$ 0
Subsequent Event [Line Items]
Proceeds from issuance of debt			$ 1,705,000
Debt instrument, amount outstanding											$ 11,811,025
Debt instrument, maturity date, pre-modification (in Date)			Mar. 31, 2014
Debt instrument, maturity date, post-modification (in Date)			Dec. 31, 2015
Subsequent Event Loan Modification Conversion Agreement [Member]
Debt Instrument [Line Items]
Proceeds from issuance of debt	$ 2,475,000
Debt instrument, amount outstanding	$ 14,963,861
Debt instrument, maturity date, pre-modification (in Date)	Dec. 31, 2015
Debt instrument, maturity date, post-modification (in Date)	Dec. 31, 2016
Subsequent Event [Line Items]
Proceeds from issuance of debt	$ 2,475,000
Debt instrument, amount outstanding	$ 14,963,861
Debt instrument, maturity date, pre-modification (in Date)	Dec. 31, 2015
Debt instrument, maturity date, post-modification (in Date)	Dec. 31, 2016

COMMON STOCK (Narrative) (Detai

COMMON STOCK (Narrative) (Details) - USD ($)	Jan. 10, 2014	Nov. 15, 2013	Mar. 01, 2013	Dec. 26, 2012	Dec. 14, 2012	Jul. 17, 2010	Sep. 30, 2014	Sep. 30, 2013
Debt Instrument [Line Items]
Stock issued for services (in Shares)				1,000,000	2,000,000
Common stock, price per share (in Dollars per Share)				$ 0.10	$ 0.10
Proceeds from issuance of common stock				$ 100,000	$ 200,000			$ 300,000
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Share based compensation							$ 101,967	$ 22,832
Share based compensation, total shares authorized for issuance under the plan (in Shares)							5,000,000
Options granted in period (in Shares)			1,600,000
Fair value of options granted			$ 62,100
Shares of common stock issuable under option grant (in Shares)			1,600,000
Stock options exercised (in Shares)							0	0
Stock options expired (in Shares)							0	1,303,333
Stock options forfeited (in Shares)							0	250,000
Weighted average grant date fair value, stock options (in Dollars per Share)		$ 0.01
Stock option unrecognized compensation cost							$ 0
Aggregate intrinsic value, options, Outstanding							$ 0
Original share-based compensation recognized, related to modification								$ 101,967
Pre - Amendment [Member]
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Stock option exercise price range lower limit (in Dollars per Share)		0.12
Stock option exercise price range upper limit (in Dollars per Share)		0.25
Post - Amendment [Member]
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Stock option exercise price (in Dollars per Share)		$ 0.10
Employee Stock Option [Member]
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Award expiration period (in Duration)			5 years
Award exercise price (in Dollars per Share)			$ 0.04
Stock option exercise price (in Dollars per Share)			$ 0.10
Accelerated compensation cost recognized with change in stock option exercise price		$ 39,867
Pre-Modification [Member]
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Award expiration period (in Duration)						3 months
Pre-Modification [Member] | Employee Stock Option [Member] | Pre - Amendment [Member]
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Award expiration date (in Date)		Nov. 19, 2013
Pre-Modification [Member] | Employee Stock Option [Member] | Post - Amendment [Member]
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Award expiration date (in Date)		Sep. 30, 2018
Post-Modification [Member]
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Award expiration period (in Duration)						1 year
Post-Modification [Member] | Employee Stock Option [Member] | Pre - Amendment [Member]
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Award expiration date (in Date)		Oct. 8, 2015
Post-Modification [Member] | Employee Stock Option [Member] | Post - Amendment [Member]
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Award expiration date (in Date)		Dec. 31, 2018
Loan Modification Conversion Agreement [Member]
Debt Instrument [Line Items]
Debt conversion, original debt amount	$ 466,815	$ 466,815
Debt conversion, shares issued (in Shares)	4,668,152	4,668,152

DERIVATIVE INSTRUMENTS (Narrati

DERIVATIVE INSTRUMENTS (Narrative) (Details)	Oct. 11, 2011$ / sharesshares	Mar. 19, 2008$ / sharesshares	Jun. 30, 2012$ / sharesshares	Sep. 30, 2013USD ($)	Sep. 30, 2009$ / sharesshares	Sep. 30, 2014USD ($)shares
DERIVATIVE INSTRUMENTS [Abstract]
Term of common stock purchase warrants issued (in Duration)		5 years
Number of common stock purchase with warrants issued (in Shares) | shares		250,000
Adjusted number of common stock purchase with warrants issued (in Shares) | shares	738,636		773,810		601,852
Initial exercise price of warrants issued (in Dollars per Share) | $ / shares		$ 0.65
Adjusted exercise price of warrants issued (in Dollars per Share) | $ / shares	$ 0.22		$ 0.21		$ 0.27
Effective registration of warrants issued (in Duration)		4 months
Target price factor, applied to projected reset price (in Integer)		2
Multinominal warrant valuation assumption, probability of reset event (in Percent)		10.00%
Multinominal warrant valuation assumption, percent of market of projected financing (in Percent)		100.00%
Number of warrants exercised or expired (in Shares) | shares						0
Fair value of derivative liability						$ 0
ASC 815-15 [Member] | Derivative Liability [Member]
New Accounting Pronouncements or Chainge in Accounting Principle [Line Items]
Adoption of new accounting principle, effect				$ (2,919)
ASC 815-15 [Member] | Gain Loss on Derivative Instruments [Member]
New Accounting Pronouncements or Chainge in Accounting Principle [Line Items]
Adoption of new accounting principle, effect				$ 2,919

COMMITMENTS (Narrative) (Detail

COMMITMENTS (Narrative) (Details) - USD ($)	Dec. 14, 2012	Jun. 10, 2011	Sep. 30, 2014	Sep. 30, 2013
COMMITMENTS [Abstract]
Term of lease agreement (in Duration)		62 months
Monthly base rate, lease payments		$ 2,750	$ 37,354
Period after which base lease increases, throughout term of lease (in Duration)		12 months
Amount of annual average rate of increase to base lease payments		$ 2,883
Preliminary settlement amount	$ 150,000
Preliminary Eustice settlement agreement, years over which amount is to be paid	4 years
Amount owed to Eustice on consulting agreement, included in commitment amount	$ 125,000
Preliminary Eustice settlement agreement, months over which amount is to be paid in equal installments	48 months
Tax refund of Provident Energy, owed to Eustice	$ 12,000
Loss on settlement of debt				$ 29,165
Payments made under settlement agreement			$ 37,500	28,125
Lease expense			58,548	$ 54,648
Total balance owed to Ms.Eustice			84,375
Other commitment, non-current			$ 46,875

COMMITMENTS (Schedule of Future

COMMITMENTS (Schedule of Future Minimum Rent Payments Due) (Details) - USD ($)	Sep. 30, 2014	Jun. 10, 2011
COMMITMENTS [Abstract]
Monthly base rent due in next twelve months	$ 37,354	$ 2,750
Monthly base rent due in year two	$ 32,083

COMMITMENTS (Schedule of of Req

COMMITMENTS (Schedule of of Required Principal Payments on Settlement) (Details) - Settled Litigation [Member]	Sep. 30, 2014USD ($)
Other Commitments [Line Items]
Required principal payments in next twelve months, settlement	$ 37,500
Required principal payments in year two, settlement	37,500
Required principal payments in year three, settlement	$ 9,375

ASSET RETIREMENT OBLIGATION (Sc

ASSET RETIREMENT OBLIGATION (Schedule of Changes in Asset Retirement Obligations) (Details) - USD ($)	12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
ASSET RETIREMENT OBLIGATION [Abstract]
Asset retirement obligations, beginning of period	$ 135,888	$ 123,827
Accretion expenses	13,236	12,061
Asset retirement obligations, end of period	$ 149,124	$ 135,888

SUPPLEMENTAL CASH FLOW AND OT57

SUPPLEMENTAL CASH FLOW AND OTHER DISCLOSURES (Schedule of Supplemental Cash Flow and Other Disclosures) (Details) - USD ($)	12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
SUPPLEMENTAL CASH FLOW AND OTHER DISCLOSURES [Abstract]
Interest paid	$ 2,631	$ 1,646
Income taxes paid
Noncash Financing and Investing Activities
Accrued interest converted into note payable		$ 291,025
Note payable related to capital expenditures		$ 79,300

INCOME TAXES (Schedule of Non-C

INCOME TAXES (Schedule of Non-Capital Losses) (Details) - Sep. 30, 2014 - USD ($)	Total
Operating Loss Carryforwards [Line Items]
Operating loss carryforward, amount	$ 16,228,201
Tax Year 2006 [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carryforward, amount	$ 16,548
Operating loss carryforward, year of expiration (in Date)	Sep. 30, 2026
Tax Year 2007 [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carryforward, amount	$ 493,777
Operating loss carryforward, year of expiration (in Date)	Sep. 30, 2027
Tax Year 2008 [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carryforward, amount	$ 1,199,618
Operating loss carryforward, year of expiration (in Date)	Sep. 30, 2028
Tax Year 2009 [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carryforward, amount	$ 3,853,251
Operating loss carryforward, year of expiration (in Date)	Sep. 30, 2029
Tax Year 2010 [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carryforward, amount	$ 3,008,921
Operating loss carryforward, year of expiration (in Date)	Sep. 30, 2030
Tax Year 2011 [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carryforward, amount	$ 2,628,028
Operating loss carryforward, year of expiration (in Date)	Sep. 30, 2031
Tax Year 2012 [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carryforward, amount	$ 1,636,396
Operating loss carryforward, year of expiration (in Date)	Sep. 30, 2032
Tax Year 2013 [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carryforward, amount	$ 1,660,225
Operating loss carryforward, year of expiration (in Date)	Sep. 30, 2033
Tax Year 2014 [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carryforward, amount	$ 1,731,437
Operating loss carryforward, year of expiration (in Date)	Sep. 30, 2034

INCOME TAXES (Schedule of Defer

INCOME TAXES (Schedule of Deferred Tax Assets and Liabilities After Corporate Income Tax) (Details) - USD ($)	Sep. 30, 2014	Sep. 30, 2013
Deferred Income Tax Assets [Abstract]
Net losses carried forward	$ 5,679,870	$ 5,073,867
Gross deferred income tax asset	5,679,870	5,073,867
Valuation allowance	$ (5,679,870)	$ (5,073,867)
Net deferred income tax asset

SUBSEQUENT EVENTS (Narrative) (

SUBSEQUENT EVENTS (Narrative) (Details) - USD ($)	Nov. 15, 2014	Oct. 02, 2014	Nov. 01, 2014	Oct. 01, 2014
Employment Contracts [Member] | Chief Executive Officer [Member]
Subsequent Event [Line Items]
Executive annual salary under employment agreement				$ 240,000
Term of executive salary under employment agreement (in Duration)		1 year
Minimum period of written notice required by executive or Company for employment agreement to not be automatically renewed (in Duration)		60 days
Employment Contracts [Member] | Chief Financial Officer [Member]
Subsequent Event [Line Items]
Executive annual salary under employment agreement				$ 175,000
Term of executive salary under employment agreement (in Duration)		1 year
Minimum period of written notice required by executive or Company for employment agreement to not be automatically renewed (in Duration)		60 days
Subsequent Event Loan Modification Conversion Agreement [Member]
Subsequent Event [Line Items]
Proceeds from issuance of debt	$ 2,475,000
Debt instrument, amount outstanding	$ 14,963,861
Debt instrument, interest included in balance			$ 677,836
Debt instrument, maturity date, pre-modification (in Date)	Dec. 31, 2015
Debt instrument, maturity date, post-modification (in Date)	Dec. 31, 2016

SUPPLEMENTAL OIL AND GAS INFO61

SUPPLEMENTAL OIL AND GAS INFORMATION (Narrative) (Details) - $ / shares	12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Discounted future net cash flows standardized measure [Abstract]
Twelve month unweighted average of the first of the month market prices used for the standardized measure of discounted future net cash flows (in Dollars per Unit)	77.69	78.77

SUPPLEMENTAL OIL AND GAS INFO62

SUPPLEMENTAL OIL AND GAS INFORMATION (Schedule of Capitalized Costs Related to Oil and Gas Producing Activities) (Details) - USD ($)	Sep. 30, 2014	Sep. 30, 2013
Capitalized costs of oil and gas producing activities net [Abstract]
Evaluated oil and gas properties	$ 19,107,823	$ 18,399,005
Less accumulated depeletion and impairment	(18,382,583)	(17,332,325)
Net capitalized costs for evaluated oil and gas properties	$ 725,240	$ 1,066,680

SUPPLEMENTAL OIL AND GAS INFO63

SUPPLEMENTAL OIL AND GAS INFORMATION (Schedule of Costs Incurred in Oil and Gas Property Acquisition, Exploration and Development Activities) (Details) - USD ($)	12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Costs incurred in oil and gas property, acquisition, exploration and development activities [Abstract]
Evaluated Property Acquisition Costs
Evaluated Exploration Costs	$ 708,818	$ 85,830
Costs incurred in oil and gas property, acquisition, exploration and development activities	$ 708,818	$ 85,830

SUPPLEMENTAL OIL AND GAS INFO64

SUPPLEMENTAL OIL AND GAS INFORMATION (Schedule of Results of Operations for Oil and Gas Producing Activities) (Details) - USD ($)	12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Results of Operations from Oil and Gas Producing Activities
Revenue	$ 844,303	$ 849,916
Production costs	(782,008)	(780,958)
Depletion, depreciation and amortization	(419,471)	(431,748)
Impairment of oil and gas properties	(630,787)	(519,125)
Loss from oil and gas operations	$ (987,963)	$ (881,915)

SUPPLEMENTAL OIL AND GAS INFO65

SUPPLEMENTAL OIL AND GAS INFORMATION (Schedule of Proved Oil and Gas Reserve Quantities) (Details) - bbl	12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Proved Oil and Gas Reserve Quantities
Balance beginning of the year (in bbl)	38,170	87,678
Revisions of previous estimates (in bbl)	4,685	(39,726)
Production (in bbl)	(9,765)	(9,782)
Transfer of oil and gas interest (in bbl)
Balance end of the year (in bbl)	33,090	38,170

SUPPLEMENTAL OIL AND GAS INFO66

SUPPLEMENTAL OIL AND GAS INFORMATION (Schedule of Standardized Measure of Discounted Future Cash Flows) (Details) - USD ($)	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2012
Standardized Measure of Discounted Future Net Cash Flow [Abstract]
Future cash inflows	$ 2,570,759	$ 3,006,650
Future production and development costs	(1,437,698)	(1,600,136)
Future income tax expenses	(396,571)	(492,280)
Future net cash flows	736,490	914,234
10% annual discount for estimated timing of cash flows	(153,925)	(220,893)
Standardized measure of discounted future net cash flows	$ 582,565	$ 693,341	$ 1,517,550

SUPPLEMENTAL OIL AND GAS INFO67

SUPPLEMENTAL OIL AND GAS INFORMATION (Schedule of Sources of Changes in Discounted Future Net Cash Flows) (Details) None in scaling factor is -9223372036854775296	12 Months Ended
	Sep. 30, 2014USD ($)bbl	Sep. 30, 2013USD ($)bbl
Sources of Changes in Discounted Future Net Cash Flows [Abstract]
Standardized measure of discounted future net cash flows at the beginning of the year	$ 693,341	$ 1,517,550
Accretion of discount	106,668	233,469
Development costs incurred	708,818	85,830
Changes in estimated development costs	(699,208)	(21,269)
Revision of previous quantity estimates	131,757	(1,319,808)
Net change in prices and production costs	(604,275)	(645,981)
Net change in income taxes	59,649	443,805
Sales of oil and gas produced, net of production costs	$ 18,705	$ 12,042
Transfer of oil and gas interest (in bbl) | bbl
Timing differences and other	$ 167,110	$ 387,703
Standardized measure of discounted future net cash flows at the end of the year	$ 582,565	$ 693,341