Arkanova Energy (AKVA) 10-Q 14 Aug 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Jun. 30, 2015	Aug. 13, 2015
Document and Entity Information [Abstract]
Trading Symbol	akva
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-Q
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		54,182,267
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes

Consolidated Balance Sheets (un

Consolidated Balance Sheets (unaudited) - USD ($)	Jun. 30, 2015	Sep. 30, 2014
ASSETS
Cash and cash equivalents	$ 3,093,305	$ 646,814
Short term investment	129,217	25,094
Oil and gas receivables	89,941	117,174
Prepaid expenses and other	309,657	609,512
Total current assets	3,622,120	1,398,594
Property and equipment, net of accumulated depreciation and impairment of $412,135 and $335,504	278,349	304,392
Oil and gas properties, full cost method
Evaluated, net of accumulated depletion and impairment of $19,537,397 and $18,382,583	64,400	725,240
Other Assets	97,000	97,000
Total assets	4,061,869	2,525,226
LIABILITIES AND STOCKHOLDERS' DEFICIT
Accounts payable	143,253	586,406
Accrued liabilities	595,275	617,649
Due to related party	20,779	38,029
Notes payable	20,207	19,618
Project advances	2,439,793	812,114
Other liabilites	37,500	37,500
Total current liabilities	3,256,807	2,111,316
Loans payable	21,020	36,249
Notes payable	14,963,861	11,811,025
Asset retirement obligations	159,859	149,124
Other liabilities	18,750	46,875
Total liabilities	$ 18,420,297	$ 14,154,589
Contingencies and commitments
Stockholders' Deficit
Common Stock, $0.001 par value, 1,000,000,000 shares authorized, 54,182,267 (September 30, 2014 - 54,182,267) shares issued and outstanding	$ 54,182	$ 54,182
Additional paid-in capital	19,398,714	19,387,453
Accumulated deficit	(33,811,324)	(31,070,998)
Total stockholders' deficit	(14,358,428)	(11,629,363)
Total liabilities and stockholders' deficit	$ 4,061,869	$ 2,525,226

Consolidated Balance Sheets (u3

Consolidated Balance Sheets (unaudited) (Parenthetical) - USD ($)	Jun. 30, 2015	Sep. 30, 2014
ASSETS
Property and equipment, accumulated depreciation	$ 412,135	$ 335,504
Oil and gas properties evaluated, accumulated depletion	$ 19,537,397	$ 18,382,583
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	54,182,267
Common Stock, shares outstanding (in Shares)	54,182,267	54,182,267

Consolidated Statements of Oper

Consolidated Statements of Operations (unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Revenue
Oil and gas sales	$ 94,042	$ 211,597	$ 303,850	$ 596,915
Operator income	20,250	20,250	60,750	60,750
Total revenue	114,292	231,847	364,600	657,665
Expenses
General and administrative expenses	300,959	330,792	938,635	1,042,803
Oil and gas production costs	85,155	151,469	343,754	554,699
Accretion	3,661	3,337	10,735	9,783
Depletion	106,764	183,001	255,953	343,356
Impairment of oil and gas properties	353,785	386,059	898,861	630,787
Operating loss	(736,032)	(822,811)	(2,083,338)	(1,923,763)
Other expenses
Interest expense	(224,261)	(176,995)	(656,988)	(514,867)
Net loss	$ (960,293)	$ (999,806)	$ (2,740,326)	$ (2,438,630)
Loss per share - basic and diluted (in Dollars per Share)	$ (0.02)	$ (0.02)	$ (0.05)	$ (0.04)
Basic weighted average common shares outstanding (in Shares)	54,182,000	54,182,000	54,182,000	52,438,000
Diluted weighted average common shares outstanding (in Shares)	54,182,000	54,182,000	54,182,000	52,438,000

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (unaudited) - USD ($)	9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Operating Activities
Net loss	$ (2,740,326)	$ (2,438,630)
Adjustment to reconcile net loss to net cash used in operating activities:
Accretion	10,735	9,783
Depreciation	76,631	80,638
Depletion	255,953	343,356
Impairment of oil and gas properties	898,861	630,787
Stock-based compensation	11,261	101,967
Changes in operating assets and liabilities:
Prepaid expenses and other receivables	299,855	(206,296)
Oil and gas receivables	27,233	(5,205)
Accounts payable and accrued liabilities	(463,454)	(153,137)
Accrued interest	655,462	513,722
Due to related parties	(17,250)	(221,000)
Net Cash Used in Operating Activities	(985,039)	(1,344,015)
Investing Activities
Purchase of equipment	(50,588)	(75,729)
Oil and gas property expenditures	(473,673)	(614,280)
Project advances	1,627,679	1,395,000
Purchase of short term investment	(104,123)	(10,000)
Net Cash Provided by Investing Activities	999,295	694,991
Financing Activities
Principal payments on debt	(42,765)	(44,907)
Proceeds from issuance of promissory notes	2,475,000	1,705,000
Net Cash Provided by Financing Activities	2,432,235	1,660,093
Net Change in Cash	2,446,491	1,011,069
Cash and cash equivalents - beginning of period	646,814	540,636
Cash and cash equivalents - end of period	$ 3,093,305	$ 1,551,705
Supplemental Cash Flow and Other Disclosures (Note 11)

BASIS OF PRESENTATION

BASIS OF PRESENTATION	9 Months Ended
	Jun. 30, 2015
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. In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments, consisting of only normal recurring accruals, necessary for a fair statement of financial position, results of operations, and cash flows. The information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and the accompanying notes included in our Annual Report on Form 10-K for the year ended September 30, 2014. The accounting policies are described in the “Notes to the Consolidated Financial Statements” in the 2014 Annual Report on Form 10-K and updated, as necessary, in this Form 10-Q. The year-end consolidated balance sheet data presented for comparative purposes was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States. The results of operations for the nine months ended June 30, 2015 are not necessarily indicative of the operating results for the full year or for any other subsequent interim period.

GOING CONCERN

GOING CONCERN	9 Months Ended
	Jun. 30, 2015
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 $33,811,324 since inception at June 30, 2015. 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.

SHORT TERM INVESTMENT

SHORT TERM INVESTMENT	9 Months Ended
	Jun. 30, 2015
SHORT TERM INVESTMENT [Abstract]
SHORT TERM INVESTMENT	NOTE 3: SHORT TERM INVESTMENT On November 22, 2014, the Company invested in a deposit for $25,125. The term of the investment is 12 months, maturing on November 22, 2015 and bears interest at a rate of 0.3% annually. Interest received on the investment during the nine months ended June 30, 2015 was $36. The investment is to secure a letter to the US Environmental Protection Agency for $23,595 for one of the Company’s wells. On December 2, 2014, the Company invested in two deposits for $18,000 each. The term of the investments is 12 months, maturing on December 2, 2015 and bears interest at a rate of 0.3% annually. Interest received on the investments during the nine months ended June 30, 2015 was $56. The investments are to secure two letters to the US Environmental Protection Agency for $18,000 each for two of the Company’s wells. On April 20, 2015, the Company invested in a deposit for $68,000. The term of the investment is 36 months, maturing on April 20, 2018 and bears interest at a rate of 0.6% annually. Interest received on the investments during the nine months ended June 30, 2015 was $0. The investment is to secure a letter to the US Environmental Protection Agency for $68,000 for four of the Company’s wells.

OIL AND GAS INTERESTS

OIL AND GAS INTERESTS	9 Months Ended
	Jun. 30, 2015
OIL AND GAS INTERESTS [Abstract]
OIL AND GAS INTERESTS	NOTE 4: OIL AND GAS INTERESTS Arkanova is currently participating in oil and gas exploration activities in Montana. All of Arkanova’s oil and gas properties are located in the United States. Proven and Developed Properties, Montana During the nine months ended June 30, 2015, the Company incurred costs of $493,973 that were capitalized to their oil and gas properties. At June 30, 2015, the carrying value of the evaluated oil and gas properties exceeded the present value of the estimated future net revenue; therefore, an impairment of $898,861 (June 30, 2014 - $630,787) was recorded. The carrying value of Arkanova’s evaluated oil and gas properties at June 30, 2015 and September 30, 2014 was $64,400 and $725,240, respectively. During the nine months ended June 30, 2015, the Company recorded depletion of $255,953 (2014 - $343,356). During the year ended September 30, 2014, the Company received $1,395,000 of project advances and $582,886 was re-allocated to oil and gas properties to offset against the costs for the other working interest partners. During the nine months ended June 30, 2015, the Company received an additional $2,025,000 of project advances and $397,321 was re-allocated to oil and gas properties to offset against the costs for the other working interest partners. As of June 30, 2015, $980,207 of the total project advances of $3,420,000 was re-allocated to oil and gas properties to offset against the costs for the other working interest partners. At June 30, 2015, the Company holds $2,439,793 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 to be incurred on the waterflood project and on drilling of Bekkan Well.

EARNINGS (LOSS) PER SHARE

EARNINGS (LOSS) PER SHARE	9 Months Ended
	Jun. 30, 2015
EARNINGS (LOSS) PER SHARE [Abstract]
EARNINGS (LOSS) PER SHARE	NOTE 5: 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 Three Months Ended June 30, 2015 2014 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 $ (960,293 ) 54,182,000 $ (0.02 ) $ (999,806 ) 54,182,000 $ (0.02 ) Effective of Dilutive Securities: Stock options and other – – – – – – Diluted: Income (loss) attributable to common stock, including assumed conversions $ (960,293 ) 54,182,000 $ (0.02 ) $ (999,806 ) 54,182,000 $ (0.02 ) For the Nine Months Ended June 30, 2015 2014 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 $ (2,740,326 ) 54,182,000 $ (0.05 ) $ (2,438,630 ) 52,438,000 $ (0.05 ) Effective of Dilutive Securities: Stock options and other – – – – – – Diluted: Income (loss) attributable to common stock, including assumed conversions $ (2,740,326 ) 54,182,000 $ (0.05 ) $ (2,438,630 ) 52,438,000 $ (0.05 )

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	9 Months Ended
	Jun. 30, 2015
RELATED PARTY TRANSACTIONS [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 6: RELATED PARTY TRANSACTIONS (a) At June 30, 2015, the Company owed backpay of $3,750 (September 30, 2014 - $5,000) to the President of the Company and $17,029 (September 30, 2014 - $33,029) to the CFO of the Company. (b) 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. (c) 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 Financial 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.

NOTES PAYABLE

NOTES PAYABLE	9 Months Ended
	Jun. 30, 2015
NOTES PAYABLE [Abstract]
NOTES PAYABLE	NOTE 7: NOTES PAYABLE (a) 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. 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 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. Arkanova evaluated the November 1, 2014 modification under the guidance found in ASC 470-50 and ASC 470-60 and determined that the carrying value of the 2013 Note did not exceed the total future cash payments of the 2014 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. (b) 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 nine months ended June 30, 2015, the Company repaid a principal amount of $14,641 (2014 – $14,075). The balance of the loan is $41,227 at June 30, 2015 (September 30, 2014 - $55,867).

COMMON STOCK

COMMON STOCK	9 Months Ended
	Jun. 30, 2015
COMMON STOCK [Abstract]
COMMON STOCK	NOTE 8: COMMON STOCK Common Stock The Company did not issue any common shares during the nine months ended June 30, 2015. 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 November 1, 2014, Arkanova granted 100,000 stock options valued at $3,871 with immediate vesting to an employee to acquire 100,000 stock options 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 per share. On May 1, 2015, Arkanova granted 225,000 stock options valued at $4,133 with immediate vesting to an employee to acquire 225,000 stock options at an exercise price of $0.05 per share expiring in 5 years. The grant date fair value of the options using the Black-Scholes option pricing model was $0.02 per share. On June 1, 2015, Arkanova granted 100,000 stock options valued at $1,738 with immediate vesting to an employee to acquire 100,000 stock options at an exercise price of $0.05 per share expiring in 5 years. The grant date fair value of the options using the Black-Scholes option pricing model was $0.02 per share. The following assumptions were used to value the options: November 1, 2014 May 1, 2015 June 1, 2015 Expected dividend yield 0.00% 0.00% 0.00% Expected volatility 206% 206% 205% Expected life (in years) 5.00 5.00 5.00 Risk-free interest rate 1.62% 1.50% 1.55% During the nine months ended June 30, 2015 and 2014, no stock options were exercised. Stock-based compensation of $9,742 (2014 - $101,967) was recorded for the nine months ended June 30, 2015. During the nine months ended June 30, 2015 and 2014, no stock options expired unexercised and 250,000 (2014 – nil) stock options were cancelled. 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, 2014 4,800,000 $ 0.05* Granted 425,000 0.05* Cancelled (250,000 ) (0.10 ) Outstanding, June 30, 2015 4,975,000 $ 0.05* Exercisable, June 30, 2015 4,975,000 $ 0.05* 3.66 $ – * On February 25, 2015, Arkanova amended the terms of the outstanding stock options to decrease the exercise prices from $0.10 to $0.05. The weighted average grant date fair value of the modified stock options was $0.02 and Arkanova recognized an additional stock-based compensation expense of $1,519 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 220% 220% Expected life (in years) 3.92 3.92 Risk-free interest rate 1.20% 1.20% At June 30, 2015, 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 June 30, 2015.

COMMITMENTS

COMMITMENTS	9 Months Ended
	Jun. 30, 2015
COMMITMENTS [Abstract]
COMMITMENTS	NOTE 9: COMMITMENTS See Note 7. (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 June 30, 2015, 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 nine months ended June 30, 2015 was $44,741 (2014 - $43,438). Lease payments at the monthly base rate for the remainder of the lease term are as follows: 2015 $ 9,510 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 nine months ended June 30, 2015, the Company repaid a total of $28,125 (2014 - $28,125) to Ms. Eustice. At June 30, 2015, there is a total balance owing of $56,250 of which $37,500 is current and $18,750 is long term. The following principal payments are required: 2015 $ 9,375 2016 $ 37,500 2017 $ 9,375

ASSET RETIREMENT OBLIGATION

ASSET RETIREMENT OBLIGATION	9 Months Ended
	Jun. 30, 2015
ASSET RETIREMENT OBLIGATION [Abstract]
ASSET RETIREMENT OBLIGATION	NOTE 10: ASSET RETIREMENT OBLIGATIONS Changes in Arkanova’s asset retirement obligations were as follows: Nine months Year Ended Ended June 30, September 30, 2015 2014 Asset retirement obligations, beginning of period $ 149,124 $ 135,888 Accretion expense 10,735 13,236 Asset retirement obligations, end of period $ 159,859 $ 149,124

SUPPLEMENTAL CASH FLOW AND OTHE

SUPPLEMENTAL CASH FLOW AND OTHER DISCLOSURES	9 Months Ended
	Jun. 30, 2015
SUPPLEMENTAL CASH FLOW AND OTHER DISCLOSURES [Abstract]
SUPPLEMENTAL CASH FLOW AND OTHER DISCLOSURES	NOTE 11: SUPPLEMENTAL CASH FLOW AND OTHER DISCLOSURES Nine months Nine months Ended Ended June 30, June 30, 2015 2014 Supplemental Disclosures: Interest paid $ 1,458 $ 2,050 Income taxes paid $ – $ – Non-cash Financing and Investing Activities Shares issued to settle accrued interest $ – $ 466,815 Accounts payable related to capital expenditures $ 20,301 $ –

EARNINGS (LOSS) PER SHARE (Tabl

EARNINGS (LOSS) PER SHARE (Tables)	9 Months Ended
	Jun. 30, 2015
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 Three Months Ended June 30, 2015 2014 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 $ (960,293 ) 54,182,000 $ (0.02 ) $ (999,806 ) 54,182,000 $ (0.02 ) Effective of Dilutive Securities: Stock options and other – – – – – – Diluted: Income (loss) attributable to common stock, including assumed conversions $ (960,293 ) 54,182,000 $ (0.02 ) $ (999,806 ) 54,182,000 $ (0.02 ) For the Nine Months Ended June 30, 2015 2014 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 $ (2,740,326 ) 54,182,000 $ (0.05 ) $ (2,438,630 ) 52,438,000 $ (0.05 ) Effective of Dilutive Securities: Stock options and other – – – – – – Diluted: Income (loss) attributable to common stock, including assumed conversions $ (2,740,326 ) 54,182,000 $ (0.05 ) $ (2,438,630 ) 52,438,000 $ (0.05 )

COMMON STOCK (Tables)

COMMON STOCK (Tables)	9 Months Ended
	Jun. 30, 2015
COMMON STOCK [Abstract]
Schedule of Stock Options, Valuation Assumptions	The following assumptions were used to value the options: November 1, 2014 May 1, 2015 June 1, 2015 Expected dividend yield 0.00% 0.00% 0.00% Expected volatility 206% 206% 205% Expected life (in years) 5.00 5.00 5.00 Risk-free interest rate 1.62% 1.50% 1.55%
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, 2014 4,800,000 $ 0.05* Granted 425,000 0.05* Cancelled (250,000 ) (0.10 ) Outstanding, June 30, 2015 4,975,000 $ 0.05* Exercisable, June 30, 2015 4,975,000 $ 0.05* 3.66 $ –
Schedule of Weighted Average Assumptions Used to Estimate Fair Value of Each Option Amendment on the Date of the Amendment Using the Black-Scholes Option Pricing Model	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 220% 220% Expected life (in years) 3.92 3.92 Risk-free interest rate 1.20% 1.20%

COMMITMENTS (Tables)

COMMITMENTS (Tables)	9 Months Ended
	Jun. 30, 2015
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 $ 9,510 2016 $ 32,083
Schedule of principal payments required	The following principal payments are required: 2015 $ 9,375 2016 $ 37,500 2017 $ 9,375

ASSET RETIREMENT OBLIGATION (Ta

ASSET RETIREMENT OBLIGATION (Tables)	9 Months Ended
	Jun. 30, 2015
ASSET RETIREMENT OBLIGATION [Abstract]
Schedule of Changes in Asset Retirement Obligations	Changes in Arkanova’s asset retirement obligations were as follows: Nine months Year Ended Ended June 30, September 30, 2015 2014 Asset retirement obligations, beginning of period $ 149,124 $ 135,888 Accretion expense 10,735 13,236 Asset retirement obligations, end of period $ 159,859 $ 149,124

SUPPLEMENTAL CASH FLOW AND OT21

SUPPLEMENTAL CASH FLOW AND OTHER DISCLOSURES (Tables)	9 Months Ended
	Jun. 30, 2015
SUPPLEMENTAL CASH FLOW AND OTHER DISCLOSURES [Abstract]
Schedule of Cash Flow Supplemental Disclosures	SUPPLEMENTAL CASH FLOW AND OTHER DISCLOSURES Nine months Nine months Ended Ended June 30, June 30, 2015 2014 Supplemental Disclosures: Interest paid $ 1,458 $ 2,050 Income taxes paid $ – $ – Non-cash Financing and Investing Activities Shares issued to settle accrued interest $ – $ 466,815 Accounts payable related to capital expenditures $ 20,301 $ –

BASIS OF PRESENTATION (Narrativ

BASIS OF PRESENTATION (Narrative) (Details)	9 Months Ended
	Jun. 30, 2015
BASIS OF PRESENTATION [Abstract]
Date of incorporation (Date)	Sep. 6, 2001

GOING CONCERN (Narrative) (Deta

GOING CONCERN (Narrative) (Details) - USD ($)	Jun. 30, 2015	Sep. 30, 2014
GOING CONCERN [Abstract]
Losses since inception	$ 33,811,324	$ 31,070,998

SHORT TERM INVESTMENT (Narrativ

SHORT TERM INVESTMENT (Narrative) (Details)	Apr. 20, 2015USD ($)$ / shares	Dec. 02, 2014USD ($)$ / shares	Nov. 22, 2014USD ($)$ / shares	Jun. 30, 2015USD ($)	Jun. 30, 2014USD ($)
Restricted Cash and Cash Equivalents Items [Line Items]
Investment in deposit				$ 104,123	$ 10,000
November 22, 2014 Certificate of Deposit [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Investment in deposit			$ 25,125
Deposit investment term (in Duration)			12 months
Deposit investment, maturity date (in Date)			Nov. 22, 2015
Deposit investment, interest rate (in Percent)			0.30%
Short-term deposit investment, interest earned				36
Short-term deposit investment, amount of EPA letter secured by restricted deposit investment			$ 23,595
Number of wells covered under EPA Letter Certificate of Deposit | $ / shares			1
December 2, 2014 Certificate of Deposit [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Investment in deposit		$ 18,000
Deposit investment term (in Duration)		12 months
Deposit investment, maturity date (in Date)		Dec. 2, 2015
Deposit investment, interest rate (in Percent)		0.30%
Short-term deposit investment, amount of EPA letter secured by restricted deposit investment		$ 18,000
December 2, 2014 Certificate of Deposit 2 [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Investment in deposit		$ 18,000
Deposit investment term (in Duration)		12 months
Deposit investment, maturity date (in Date)		Dec. 2, 2015
Deposit investment, interest rate (in Percent)		0.30%
Short-term deposit investment, amount of EPA letter secured by restricted deposit investment		$ 18,000
Combined December 2, 2014 Certificates of Deposit [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Short-term deposit investment, interest earned				56
Number of wells covered under EPA Letter Certificate of Deposit | $ / shares		2
April 20, 2015 Certificate of Deposit [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Investment in deposit	$ 68,000
Deposit investment term (in Duration)	36 months
Deposit investment, maturity date (in Date)	Apr. 20, 2018
Deposit investment, interest rate (in Percent)	0.60%
Short-term deposit investment, interest earned				$ 0
Short-term deposit investment, amount of EPA letter secured by restricted deposit investment	$ 68,000
Number of wells covered under EPA Letter Certificate of Deposit | $ / shares	4

OIL AND GAS INTERESTS (Narrativ

OIL AND GAS INTERESTS (Narrative) (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Sep. 30, 2014
Proven and Developed Properties, Montana [Abstract]
Evaluated oil and gas properties, impairment recorded	$ 353,785	$ 386,059	$ 898,861	$ 630,787
Evaluated oil and gas properties, carrying value	64,400		64,400		$ 725,240
Depletion	106,764	$ 183,001	255,953	$ 343,356
Project advances, total amount received			2,025,000		1,395,000
Project advances	2,439,793		2,439,793		812,114
Project advances, re-allocated to oil and gas properties			397,321		$ 582,886
Total project advances	3,420,000		3,420,000
Total project advances, re-allocated to oil and gas properties	$ 980,207		980,207
Property, Plant, and Equipment [Line Items]
Costs incurred in oil and gas property, acquisition, exploration and development activities			$ 493,973

EARNINGS (LOSS) PER SHARE (Sche

EARNINGS (LOSS) PER SHARE (Schedule of Earnings Per Share, Basic and Diluted) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Basic:
Income (loss) attributable to common stock	$ (960,293)	$ (999,806)	$ (2,740,326)	$ (2,438,630)
Basic weighted average common shares outstanding (in Shares)	54,182,000	54,182,000	54,182,000	52,438,000
Basic per share (in Dollars per share)	$ (0.02)	$ (0.02)	$ (0.05)	$ (0.05)
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	$ (960,293)	$ (999,806)	$ (2,740,326)	$ (2,438,630)
Diluted weighted average common shares outstanding (in Shares)	54,182,000	54,182,000	54,182,000	52,438,000
Diluted per share (in Dollars per share)	$ (0.02)	$ (0.02)	$ (0.05)	$ (0.05)

RELATED PARTY TRANSACTIONS (Nar

RELATED PARTY TRANSACTIONS (Narrative) (Details) - USD ($)	Oct. 01, 2014	Jun. 30, 2015	Sep. 30, 2014
President [Member]
Related Party Transaction [Line Items]
Backpay owed to officers		$ 3,750	$ 5,000
Chief Financial Officer [Member]
Related Party Transaction [Line Items]
Backpay owed to officers		$ 17,029	$ 33,029
Annual compensation under revised executive employment agreement	$ 175,000
Executive employment agreement, period of required written notice to terminate (in Duration)	60 days
Officers employment agreement, term [in Duration]	1 year
Chief Executive Officer [Member]
Related Party Transaction [Line Items]
Annual compensation under revised executive employment agreement	$ 240,000
Executive employment agreement, period of required written notice to terminate (in Duration)	60 days
Officers employment agreement, term [in Duration]	1 year

NOTES PAYABLE (Narrative) (Deta

NOTES PAYABLE (Narrative) (Details) - USD ($)	Nov. 01, 2014	Nov. 13, 2013	Jun. 25, 2013	Jun. 30, 2015	Jun. 30, 2014	Sep. 30, 2014	Nov. 15, 2013
Debt Instrument [Line Items]
Proceeds from issuance of debt	$ 2,475,000	$ 1,705,000	$ 79,300	$ 2,475,000	$ 1,705,000
Debt instrument, amount outstanding	$ 14,963,861			41,227		$ 55,867	$ 11,811,025
Debt maturity, maturity date, pre-modification (in Date)	Dec. 31, 2015	Mar. 31, 2014
Debt instrument, maturity date, post-modification (in Date)	Dec. 31, 2016	Dec. 31, 2015
Debt conversion, original debt amount		$ 466,815
Debt conversion, shares issued (in Shares)		4,668,152
Debt conversion converted instrument price per share (in Dollars per Share)							$ 0.10
Gain recognized on debt modification	$ 0	$ 0
Debt instrument, increase from accrued interest rolled into principal	$ 677,836
Debt interest rate (in Percent)			3.95%
Debt instrument, number of equal monthly payments (in Duration)			48 months
Repayments of debt				$ 14,641	$ 14,075

COMMON STOCK (Narrative) (Detai

COMMON STOCK (Narrative) (Details) - USD ($)	Jun. 01, 2015	May. 01, 2015	Feb. 25, 2015	Nov. 01, 2014	Jun. 30, 2015		Jun. 30, 2014
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Shares available for issuance under the 2007 Stock Option Plan (in Shares)					5,000,000
Termination period of vested Non-Qualified stock options, 2008 Plan, pre-amendment (in Duration)					3 months
Termination period of vested Non-Qualified stock options, 2008 Plan, post-amendment (in Duration)					1 year
Expiration period of options granted (in Duration)	5 years	5 years		5 years
Options granted, grant date fair value (in Dollars per Share)	$ .02	$ .02		$ 0.04
Share based compensation					$ 11,261		$ 101,967
Share based compensation, portion recognized before terms amendment					$ 9,742
Share-based compensation, portion attributable to terms amendment			$ 1,519
Options granted in period (in Shares)	100,000	225,000		100,000	425,000
Value of options granted	$ 1,738	$ 4,133		$ 3,871
Exercise price of stock options granted (in Dollars per Share)	$ 0.05	$ 0.05		$ 0.10	$ .05	[1]
Stock options exercised (in Shares)					0		0
Stock options expired (in Shares)					0		0
Stock options cancelled (in Shares)					250,000		0
Aggregate intrinsic value, options, Outstanding					$ 0
Share based compensation, not yet recognized					$ 0
[1]	* On February 25, 2015, Arkanova amended the terms of the outstanding stock options to decrease the exercise prices from $0.10 to $0.05. The weighted average grant date fair value of the modified stock options was $0.02 and Arkanova recognized an additional stock-based compensation expense of $1,519 related to the modification.

COMMON STOCK (Schedule of Grant

COMMON STOCK (Schedule of Grant Date Fair Value Assumptions) (Details)	Jun. 01, 2015	May. 01, 2015	Nov. 01, 2014
COMMON STOCK [Abstract]
Expected dividend yield (in Percent)	0.00%	0.00%	0.00%
Expected volatility (in Percent)	205.00%	206.00%	206.00%
Expected life (in years) (in Duration)	5 years	5 years	5 years
Risk-free interest rate (in Percent)	1.55%	1.50%	1.62%

COMMON STOCK (Summary of Stock

COMMON STOCK (Summary of Stock Option Activity) (Details) - USD ($)		Jun. 01, 2015	May. 01, 2015	Nov. 01, 2014	Jun. 30, 2015		Jun. 30, 2014
Stock Options, Roll Forward
Number of Options Outstanding (in Shares)					4,800,000
Weighted Average Excercise Price, Outstanding (in Dollars per Share)	[1]				$ .05
Number of options, Granted (in Shares)		100,000	225,000	100,000	425,000
Weighted average exercise price, Granted (in Dollars per Share)		$ 0.05	$ 0.05	$ 0.10	$ .05	[2]
Stock options cancelled (in Shares)					(250,000)		0
Stock options cancelled (in Dollars per Share)					$ (.10)
Number of Options Exercisable (in Shares)					4,975,000
Weighted Average Exercise Price, Excercisable (in Dollars per Share)	[3]				$ .05
Weighted Average Remaining Contractual Term, Exercisable (in Duration)					3 years 7 months 28 days
Aggregate Intrinsic Value, Exercisable
Share based compensation					$ 11,261		$ 101,967
[1]	* On February 25, 2015, Arkanova amended the terms of the outstanding stock options to decrease the exercise prices from $0.10 to $0.05. The weighted average grant date fair value of the modified stock options was $0.02 and Arkanova recognized an additional stock-based compensation expense of $1,519 related to the modification.
[2]	* On February 25, 2015, Arkanova amended the terms of the outstanding stock options to decrease the exercise prices from $0.10 to $0.05. The weighted average grant date fair value of the modified stock options was $0.02 and Arkanova recognized an additional stock-based compensation expense of $1,519 related to the modification.
[3]	* On February 25, 2015, Arkanova amended the terms of the outstanding stock options to decrease the exercise prices from $0.10 to $0.05. The weighted average grant date fair value of the modified stock options was $0.02 and Arkanova recognized an additional stock-based compensation expense of $1,519 related to the modification.

COMMON STOCK (Schedule of Stock

COMMON STOCK (Schedule of Stock Options, Valuation Assumptions) (Details)	Jun. 01, 2015	May. 01, 2015	Feb. 25, 2015	Nov. 01, 2014
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Expected dividend yield (in Percent)	0.00%	0.00%		0.00%
Expected volatility (in Percent)	205.00%	206.00%		206.00%
Expected life (in years) (in Duration)	5 years	5 years		5 years
Risk-free interest rate (in Percent)	1.55%	1.50%		1.62%
Pre - Amendment [Member]
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Expected dividend yield (in Percent)			0.00%
Expected volatility (in Percent)			220.00%
Expected life (in years) (in Duration)			3 years 11 months 1 day
Risk-free interest rate (in Percent)			1.20%
Post - Amendment [Member]
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Expected dividend yield (in Percent)			0.00%
Expected volatility (in Percent)			220.00%
Expected life (in years) (in Duration)			3 years 11 months 1 day
Risk-free interest rate (in Percent)			1.20%

COMMITMENTS (Narrative) (Detail

COMMITMENTS (Narrative) (Details) - USD ($)	Dec. 14, 2014	Jun. 10, 2011	Jun. 30, 2015	Jun. 30, 2014	Sep. 30, 2013
COMMITMENTS [Abstract]
Term of lease agreement (in Duration)		62 months
Monthly base rate, lease payments		$ 2,750	$ 9,510
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
Lease expense			44,741	$ 43,438
Preliminary Eustice settlement amount	$ 150,000
Preliminary Eustice settlement agreement, years over which amount is to be paid	4 years
Amount owed on Eustice 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 recognized on Eustice agreement					$ (29,165)
Payments made under Eustice settlement agreement			28,125	$ 28,125
Total balance owed to Ms. Eustice			56,250
Eustice commitment, current			37,500
Eustice commitment, non-current			$ 18,750

COMMITMENTS (Schedule of Future

COMMITMENTS (Schedule of Future Minimum Rent Payments Due) (Details) - USD ($)	Jun. 30, 2015	Jun. 10, 2011
COMMITMENTS [Abstract]
Monthly base rent due in next twelve months	$ 9,510	$ 2,750
Monthly base rate due in year two	$ 32,083

COMMITMENTS (Schedule of of Req

COMMITMENTS (Schedule of of Required Principal Payments on Settlement) (Details)	Jun. 30, 2015USD ($)
Other Commitments [Line Items]
Required principal payments in next twelve months, settlement	$ 9,375
Required principal payments in year two, settlement	37,500
Required principal payments in year three, settlement	$ 9,375

ASSET RETIREMENT OBLIGATION (Ch

ASSET RETIREMENT OBLIGATION (Changes in Asset Retirement Obligations) (Details) - USD ($)	9 Months Ended	12 Months Ended
	Jun. 30, 2015	Sep. 30, 2014
ASSET RETIREMENT OBLIGATION [Abstract]
Asset retirement obligations, beginning of period	$ 149,124	$ 135,888
Accretion expense	10,735	13,236
Asset retirement obligations, end of period	$ 159,859	$ 149,124

SUPPLEMENTAL CASH FLOW AND OT37

SUPPLEMENTAL CASH FLOW AND OTHER DISCLOSURES (Supplemental Cash Flow and Other Disclosures) (Details) - USD ($)	9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
SUPPLEMENTAL CASH FLOW AND OTHER DISCLOSURES [Abstract]
Interest paid	$ 1,458	$ 2,050
Income taxes paid
Non-cash Financing and Investing Activities
Shares issued to settle accrued interest		$ 466,815
Accounts payable related to capital expenditures	$ 20,301

Uncategorized Items - akva-2015

Label		Element	Value
Weighted average exercise price, Outstanding (in Dollars per share)	[1]	us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice	$ .05
Number of options, Outstanding (in Shares)		us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber	4,975,000
[1]	* On February 25, 2015, Arkanova amended the terms of the outstanding stock options to decrease the exercise prices from $0.10 to $0.05. The weighted average grant date fair value of the modified stock options was $0.02 and Arkanova recognized an additional stock-based compensation expense of $1,519 related to the modification.