Jayhawk Energy (JYHW) 10-Q 25 Feb 14 2014 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Dec. 31, 2014	Feb. 25, 2014
Document And Entity Information	'	'
Entity Registrant Name	'Jayhawk Energy, Inc.	'
Entity Central Index Key	'0001308710	'
Document Type	'10-Q	'
Document Period End Date	31-Dec-14	'
Amendment Flag	'false	'
Current Fiscal Year End Date	'--09-30	'
Is Entity a Well-known Seasoned Issuer?	'No	'
Is Entity a Voluntary Filer?	'No	'
Is Entity's Reporting Status Current?	'Yes	'
Entity Filer Category	'Smaller Reporting Company	'
Entity Common Stock, Shares Outstanding	'	80,375,841
Document Fiscal Period Focus	'Q1	'
Document Fiscal Year Focus	'2014	'

Consolidated_Balance_Sheets_Un

Consolidated Balance Sheets (Unaudited) (USD $)	Dec. 31, 2013	Sep. 30, 2013
Statement of Financial Position [Abstract]	'	'
Cash	$24,253	$96,833
Trade accounts receivable, less allowance for doubtful accounts	55,773	68,497
Other current assets	9,493	10,299
TOTAL CURRENT ASSETS	89,519	175,629
Unproved properties, net (NOTE 4)	223,256	235,341
Proved properties, net (NOTE 5)	241,750	288,384
NET PROPERTY AND EQUIPMENT	465,006	523,725
OTHER LONG-TERM ASSETS (NOTE 6)	151,768	151,736
TOTAL ASSETS	706,293	851,090
Accounts payable	547,574	571,107
Due to other working and royalty interests	572,829	540,676
Other payables, interest and taxes accrued	300,501	263,292
Accrual for North Dakota reclamation complaint (NOTE 14)	274,754	330,000
Convertible debenture (NOTE 7)	1,038,687	1,073,687
TOTAL CURRENT LIABILITIES	2,734,345	2,778,762
Conversion option derivative (NOTE 8)	99,758	177,553
Warrant derivative liability (NOTE 8)	38,050	41,553
Asset retirement obligation (NOTE 9)	149,684	146,033
TOTAL LONG TERM LIABILITIES	287,492	365,139
TOTAL LIABILITIES	3,021,837	3,143,901
COMMITMENTS AND CONTINGENCIES (NOTE 14)	'	'
Preferred Stock, $.001 par value; 10,000,0000 shares authorized, none issued and outstanding	'	'
Common Stock, $.001 par value; 200,000,000 shares authorized; 80,375,841 and 76,875,841 shares issued and outstanding, respectively	$80,375	$76,875
Additional paid-in capital	21,698,165	21,657,306
Accumulated deficit	-24,094,084	-24,026,992
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)	-2,315,544	-2,292,811
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$706,293	$851,090

Consolidated_Balance_Sheets_Pa

Consolidated Balance Sheets (Parenthetical)	Dec. 31, 2013	Sep. 30, 2013
Statement of Financial Position [Abstract]	'	'
Preferred Stock, $.001 par value, authorized	10,000,000	10,000,000
Preferred Stock, $.001 par value, issued and outstanding	0	0
Common Stock, $.001 par value, authorized	200,000,000	200,000,000
Common Stock, $.001 par value, issued and outstanding	80,375,841	76,875,841

Consolidated_Statements_of_Ope

Consolidated Statements of Operations (Unaudited) (USD $)	3 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
REVENUE	'	'
Oil sales	$70,027	$111,061
Gas sales	'	'
TOTAL GROSS REVENUE	70,027	111,061
OPERATING EXPENSE	'	'
Production costs-oil	31,785	66,581
Production costs-natural gas	2,014	2,297
Depreciation, depletion, amortization and asset impairment expense	58,719	63,451
(Gain) on sales of leases and equipment	'	-90,721
Accretion of asset retirement obligation	3,651	4,686
General and administrative	90,951	89,502
TOTAL OPERATING EXPENSES	187,120	135,796
OPERATING LOSS	-117,093	-24,735
OTHER INCOME (EXPENSE)	'	'
Interest and financing costs	-31,297	-92,496
Gain on conversion of debt	15,336	'
Gain on change in fair value of conversion option derivative	62,459	44,232
Gain on change in fair value of warrant derivative	3,503	80,328
TOTAL OTHER INCOME (EXPENSE)	50,001	32,064
INCOME (LOSS) BEFORE INCOME TAX	-67,092	7,329
Provision for income taxes	'	'
NET INCOME (LOSS)	($67,092)	$7,329
Basic and diluted loss per share	'	'
Basic and diluted weighted average number shares outstanding	78,778,015	60,759,178

Consolidated_Statements_of_Cas

Consolidated Statements of Cash Flows (Unaudited) (USD $)	3 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:	'	'
Net income (loss)	($67,092)	$7,329
Depreciation, depletion and amortization	58,719	63,451
Accretion of asset retirement obligation	3,651	4,686
(Gain) Loss on extinguishment and conversion of debt	-15,336	59,200
Gain on change in fair value of conversion option derivative	-62,459	-44,232
Gain on change in fair value of warrant derivative	-3,503	-80,328
Gain on sale of leases and equipment	'	-90,721
Stock based compensation	9,360	3,146
Trade accounts receivable	12,723	75,820
Other current assets and other long term assets	774	-1,068
Accounts payable	-23,533	-59,805
Accrual for North Dakota reclamation complaint	-55,246	'
Due to royalty and working interest holders	32,153	3,566
Other payables, interest and taxes accrued	37,209	-12,226
Net cash used by operating activities	-72,580	-71,182
CASH FLOWS FROM INVESTING ACTIVITIES:	'	138,763
Proceeds from sales of leases and equipment	'	138,763
Net cash provided by investing activities	'	138,763
Net cash provided by financing activities	'	'
Net increase (decrease) in cash	-72,580	67,581
CASH AT BEGINNING OF PERIOD	96,833	74,496
CASH AT END OF PERIOD	24,253	142,077
NON-CASH FINANCING AND INVESTING ACTIVITIES:	'	'
Common stock issued for conversion of debentures	$35,000	'

Organization_and_Description_o

Organization and Description of Business	3 Months Ended
	Dec. 31, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]	'
Organization and Description of Business	'
	NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
	JayHawk Energy, Inc. and its wholly owned subsidiary, Jayhawk Gas Transportation Corporation (together the “Company” or “JayHawk”) , are engaged in the acquisition, exploration, development, production and sale of natural gas, crude oil and natural gas liquids primarily from conventional reservoirs within North America. The Company incorporated in Colorado on April 5, 2004 as Bella Trading Company, Inc. During the third quarter ending June 30, 2007, the Company changed management and entered the oil and gas business, and ceased all activity in retail jewelry. On June 21, 2007, the Company changed its name to JayHawk Energy, Inc. Since then, the Company has devoted its efforts principally to the raising of capital, organizational infrastructure development, the acquisition of oil and gas properties and exploration activities. To date, the Company has acquired three properties, Uniontown in Kansas, Crosby in North Dakota, and Girard in Kansas. The Company also formed a wholly owned subsidiary to transport natural gas in Kansas called JayHawk Gas Transportation Corporation.

Summary_of_Significant_Account

Summary of Significant Accounting Policies	3 Months Ended
	Dec. 31, 2014
Accounting Policies [Abstract]	'
Summary of Significant Accounting Policies	'
	NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
	Basis of Presentation
	The unaudited financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information, as well as the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of the Company’s management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the interim financial statements have been included. Operating results for the three months ended December 31, 2013, are not necessarily indicative of the results that may be expected for the full year ending September 30, 2014.
	For further information, refer to the financial statements and footnotes thereto in the Company’s Annual Report on Form 10-K for the year ended September 30, 2013.
	Principles of Consolidation
	The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, JayHawk Gas Transportation Company, after elimination of the intercompany accounts and transactions.
	Going Concern
	As shown in the accompanying consolidated financial statements, the Company has incurred annual operating losses since inception. As of December 31, 2013, the Company has limited financial resources with which to achieve the objectives and obtain profitability and positive cash flows. As shown in the accompanying balance sheets and statements of operations, the Company has an accumulated deficit of $24,094,084 and net loss of $67,092 for the three months ended December 31, 2013, and as of that date the Company's current liabilities exceeded its current assets by $2,644,826. Achievement of the Company's objectives will be dependent upon the ability to obtain additional financing, to locate profitable energy properties and generate revenue from current and planned business operations, and control costs. The Company plans to fund its future operations by joint venturing, obtaining additional financing from investors, and attaining additional commercial production. However, there is no assurance that the Company will be able to achieve these objectives, therefore substantial doubt about its ability to continue as a going concern exists. The financial statements do not include adjustments relating to the recoverability of recorded assets nor the implications of associated bankruptcy costs should the Company be unable to continue as a going concern.
	Joint Venture Operations
	In instances where the Company’s oil and gas activities are conducted jointly with others, the Company’s accounts reflect only its proportionate interest in such activities.
	Use of Estimates
	The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the respective reporting periods. Significant areas requiring the use of management assumptions and estimates relate to asset impairments, asset retirement obligations, stock-based compensation, income taxes and derivatives. Actual results may differ from these estimates and assumptions which could have a material effect on the Company's reported financial position and results of operations.
	Income or Loss Per Common Share
	Basic earnings per share ("EPS") is computed as net income (loss) available to common stockholders divided by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from common shares issuable through stock options, warrants, and other convertible securities.
	The dilutive effect of convertible and outstanding securities at December 31, 2013 and 2012, would be as follows:
		31-Dec-13	31-Dec-12
	Stock options	4,000,000	2,040,000
	Convertible debt	34,028,675	23,279,993
	Warrants	5,833,113	5,999,113
	Total Possible Dilution	43,861,788	31,319,106
	At December 31, 2013 and 2012, respectively, the effect of the Company's outstanding options and common stock equivalents would have been anti-dilutive.
	Reclassifications
	Certain reclassifications have been made to the 2012 financial statements in order to conform to the 2013 presentation. These reclassifications have no effect on net loss, total assets or accumulated deficit as previously reported.
	New Accounting Pronouncements
	From time to time, new accounting guidance is issued by the FASB that the Company adopts as of the specified effective date. If not discussed, management believe that the impact of recently issued standards, which are not yet effective, will not have a material impact on its financial statements upon adoption.

Fair_Value_of_Financial_Instru

Fair Value of Financial Instruments	3 Months Ended
	Dec. 31, 2014
Investments, All Other Investments [Abstract]	'
Fair Value of Financial Instruments	'
	NOTE 3 - FAIR VALUE OF FINANCIAL INSTRUMENTS
	The carrying values of cash and cash equivalents, and reclamation bonds approximate fair value due to their limited time to maturity or ability to immediately convert them to cash in the normal course. The carrying values of convertible debentures is net of a discount and does not reflect fair value of similar instruments.
	The table below sets forth the Company's financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2013 and September 30, 2013, respectively, and the fair value calculation input hierarchy that the Company has determined has applied to each asset and liability category.
		31-Dec-13	30-Sep-13	Input Hierarchy level
	Assets:
	Cash	$                   24,253	$                  96,833	Level 1
	Reclamation bonds	150,268	150,236	Level 1
	Liabilities:
	Conversion option derivative	$                   99,758	$                177,553	Level 2
	Warrant derivative liability	38,050	41,553	Level 2

Unproved_Properties_and_Impair

Unproved Properties and Impairment	3 Months Ended
	Dec. 31, 2014
Extractive Industries [Abstract]	'
Unproved Properties and Impairment	'
	NOTE 4 - UNPROVED PROPERTIES AND IMPAIRMENT
	The total of the Company's investment in unproved properties at December 31, 2013 and September 30, 2013, consists of the following capitalized costs respectively:
		31-Dec-13	30-Sep-13
	UNPROVED AND DEVELOPED PROPERTIES
	Kansas Girard Project
	Field equipment – Jayhawk Gas Transport Company	$            2,605,871	$            2,605,871
	Field equipment – Girard	579,027	579,027
	Capitalized drilling costs	614,756	614,756
	Subtotal	3,799,654	3,799,654
	Less impairments	-2,432,087	-2,432,087
	Less accumulated DD&A	-1,184,636	-1,172,551
	Unproved and developed properties, net	182,931	195,016
	UNPROVED AND UNDEVELOPED PROPERTIES
	Kansas Girard Project	1,421,199	1,421,199
	Less impairments	-839,363	-839,363
	Less accumulated amortization	-581,836	-581,836
	Girard Project, Net	-	-
	North Dakota Project, net	-	-
	Unproved and undeveloped properties, net	40,325	40,325
	TOTAL UNPROVED PROPERTIES	$                 223,256	$             235,341

Proved_Properties_and_Impairme

Proved Properties and Impairment	3 Months Ended
	Dec. 31, 2014
Accounting Policies [Abstract]	'
Proved Properties and Impairment	'
	NOTE 5 - PROVED PROPERTIES AND IMPAIRMENT
	Net capitalized costs are comprised of the following; detailed by property:
		31-Dec-13	30-Sep-13
	Crosby, North Dakota Properties
	Proved reserves	$            2,381,962	$            2,381,962
	Field equipment	1,200,247	1,200,247
	Capitalized drilling costs	416,429	416,429
	Subtotal	3,998,638	3,998,638
	Less impairments	-1,092,302	-1,092,302
	Less accumulated DD&A	-2,664,586	-2,617,952
	Total Proved Oil and Gas Properties	$               241,750	$               288,384
	For the year ended September 30, 2013, the Company performed an analysis to determine whether the carrying amounts in its financial statements exceeded the net present value of the reserve estimates for the Crosby, North Dakota property. Management determined that the net value reflected in the financial statements did not exceed the net discounted present value of the reserves estimated by the independent reserve engineer.

Other_LongTerm_Assets

Other Long-Term Assets	3 Months Ended
	Dec. 31, 2014
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]	'
Other Long-Term Assets	'
	NOTE 6 – OTHER LONG-TERM ASSETS
	Other assets consist of various deposits and reclamation bonds. Detail is disclosed in the following table:
		31-Dec-13	30-Sep-13
	Rental security deposit	$                  1,500	$                  1,500
	Reclamation bonds	150,268	150,236
	TOTAL	$             151,768	$151,735

Convertible_Debentures

Convertible Debentures	3 Months Ended
	Dec. 31, 2014
Debt Disclosure [Abstract]	'
Convertible Debentures	'
	NOTE 7 - CONVERTIBLE DEBENTURES
	On April 23, 2013, the Company entered into a Partial Reset of Conversion Price agreement (the “Partial Reset”) with certain institutional investors (the “Investors”) who are holders of convertible debentures of the Company. Under the terms of the Partial Reset, the Investors and the Company agreed to the following terms:
	Investors have the right to convert, into common stock of the Company, up to twenty five percent (25%) of the principal amount outstanding, as of April 12, 2013, of each Debenture held by each Investor, at a Conversion Price equal to $0.01 per share;
	Each Investor shall convert up to 25% of the amount of the outstanding principal amount, as of April 12, 2013, of each Debenture (the “Conversion Amount”), provided that such conversion will not cause the Investor to own more than 9.99% of the outstanding shares of the Company’s common stock.  If such conversion would result in an Investor owning more than 9.99% of the outstanding shares of the Company’s common stock then each such Investor shall only convert so much of the Conversion Amount  as would result in the Investor owning no more than 9.99% of the outstanding shares of the Company’s common stock.  Each such Investor shall thereafter, as soon as practicably possible, continue to convert so much of the Conversion Amount as possible, without causing the Investor to beneficially own more than 9.99% of the outstanding shares of the Company’s common stock, until such time as each Investor has converted their full Conversion Amount;
	The Maturity Dates of all outstanding Debentures shall be extended to December 31, 2013;
	The Expiration Date of all of the remaining 2,000,000 outstanding share purchase warrants issued pursuant to the December 2009 and April 2010 Transactions shall be extended to July 21, 2014; and
	The Expiration Date of all of the remaining 2,833,113 outstanding Warrants issued pursuant to the October 2010 Transaction, shall be extended to January 26, 2015.
	On or about May 3, 2013, three (3) investors converted $90,313 in convertible debentures at $0.01 per share.  Pursuant to these conversions, the Company issued 9,031,400 shares of its common stock.  The Company also issued 7,085,263 shares of stock at $0.01 per share in payment of interest owed pursuant to the debentures.
	On November 11, 2013, an investor converted $35,000 in convertible debentures at $0.01 per share. Pursuant to this conversion, the Company issued 3,500,000 shares of common stock. The transaction resulted in a gain on conversion of $15,336.

Derivative_Liabilities

Derivative Liabilities	3 Months Ended
	Dec. 31, 2014
Notes to Financial Statements	'
Derivative Liabilities	'
	NOTE 8 - DERIVATIVE LIABILITIES
	The debentures discussed in Note 7 contain anti-dilution provisions which call for the debt conversion and warrant exercise prices to be reduced based on future issues of debt or equity with more favorable provisions. Management has determined that these provisions cause the conversion options and warrants to require derivative liability accounting. As such, management has valued them at fair value at the date of issuance and bifurcated the option from the host instruments.
	The debentures are convertible at any time after the original issue date into a number of shares of the Company’s common stock, determined by dividing the amount to be converted by conversion prices of $0.05 and $0.01 per share at December 31, 2013. Additionally common share purchase warrants were issued, expiring 42 months from the original issue date and permit the holders two exercisable options. The warrants were exercisable by purchase of the Company’s common stock for cash, or alternatively, in a cashless exercise, the number of shares being determined in accordance with a predetermined formula based on the Company’s then current stock price.
	Conversion option derivative
	For the three months ended December 31, 2013 and December 31, 2012, respectively, the fair value of conversion options was estimated at the periods end and amendment date using the Black-Scholes option pricing model using the following weighted average assumptions and the associated revaluation range of assumptions on designated event dates, including end of quarter revaluations:
		31-Dec-13	31-Dec-12
	Risk-free interest rate	0.08% to 0.10%	0.11%
	Expected term	.25 to .50 years	.25 years
	Expected volatility	248.6% to 326.8%	340.90%
	Fair value of conversion option derivative units	$.002 to $0.047	$0.00
	Below is detail of the change in conversion option liability balance for the three months ended December 31, 2013 and December 31, 2012, respectively.
		Three months ended December 31,
		2013	2012
	Beginning balance	$              177,553	$              109,414
	Fair value of option units converted	-15,336	-
	Net change in fair value of conversion option liability	-62,459	-44,232
	Ending balance	$                99,758	$                65,182
	Warrant derivative
	For the three months ended December 31, 2013 and December 31, 2012, respectively, the fair value of warrants was estimated using the Black-Scholes option pricing model using the following weighted average assumptions and the associated revaluation range of assumptions on designated event dates over the past two years:
		31-Dec-13	31-Dec-12
	Risk-free interest rate	.07% to 0.78%	0.11% to 0.72%
	Expected term	3 months to 1 year	6 months to 1 year
	Expected volatility	206.3% to 297.7%	191.2% to 306.9%
	Fair value of conversion option derivative units	$               0.0065	$                0.0088
	Below is detail of the change in warrant derivative liability balance for three months ended December 31, 2013 and December 31, 2012, respectively.
		Three months ended December 31,
		2013	2012
	Beginning balance	$                41,553	$                58,257
	Warrant derivative issued for services	-	59,200
	Net change in fair value of warrant derivative liability	-3,503	-80,328
	Ending balance	$                38,050	$                37,129

Asset_Retirement_Obligation

Asset Retirement Obligation	3 Months Ended
	Dec. 31, 2014
Asset Retirement Obligation Disclosure [Abstract]	'
Asset Retirement Obligation	'
	NOTE 9 – ASSET RETIREMENT OBLIGATION
	The Company has identified asset retirement obligations at the Girard, Kansas and Crosby, North Dakota operating sites. These retirement obligations are determined based on the estimated cost to comply with abandonment regulations established by the Kansas Corporation Commission and the State of North Dakota. The Company's engineers have estimated the cost, in today's dollars, to comply with these regulations. These estimates have been projected out to the anticipated retirement date 7 to 15 years in the future, at an assumed inflation rate of 1.5 percent. The anticipated future cost of remediation efforts in North Dakota and Kansas is $486,403. These amounts were discounted back at an assumed interest rate of 10 percent, to arrive at a net present value of the obligation. The amount of the annual increase in the obligation is charged to accretion expense and for the three months ended December 31, 2013 and 2012, was computed to be $3,651 and $4,686, respectively.
	The following table summarizes the change in the asset retirement obligation for the three months ended December 31, 2013 and 2012, respectively:
		31-Dec-13	31-Dec-12
	Beginning balance	$              146,033	$              187,463
	Liabilities incurred	-	-
	Accretion expense	3,651	4,686
	Ending balance	$              149,684	$              192,149

Common_Stock

Common Stock	3 Months Ended
	Dec. 31, 2014
Earnings Per Share [Abstract]	'
Common Stock	'
	NOTE 10 - COMMON STOCK
	Three months ended December 31, 2013
	On November 11, 2013, the Company issued 3,500,000 shares of common stock to a holder of 10% convertible debentures within the terms thereof referenced in Note 7 who elected to convert the principal amount of $35,000. The shares were all valued at $0.01 per share per the terms of the modification referenced in Note 7.
	Fiscal Year End September 30, 2013
	On May 3, 2013, the Company issued 7,085,263 shares of common stock in lieu of paying interest with cash, to holders of convertible debentures described in Note 7.
	On May 3, 2013, the Company issued 9,031,400 shares of common stock to holders of 10% convertible debentures within the terms thereof referenced in Note 7 who elected to convert the principal amount of $90,313.

Broker_and_Share_Purchase_Warr

Broker and Share Purchase Warrants	3 Months Ended
	Dec. 31, 2014
Brokers and Dealers [Abstract]	'
Broker and Share Purchase Warrants	'
	NOTE 11 - BROKER AND SHARE PURCHASE WARRANTS
	A summary of the Company's share purchase and broker warrants outstanding at December 31, 2013 is presented as follows:
		Broker Warrants		Weighted Average Exercise Price		Share Purchase Warrants		Weighted Average Exercise Price
	Balance outstanding, September 30, 2012	221,335		$               0.05		4,777,778		$                 0.05
	Forfeited	-166,000		0.05		-		-
	Exercised	-		-		-		-
	Granted	1,000,000		0.06		-		-
	Balance outstanding, September 30, 2013	1,055,335		$               0.06		4,777,778		$                 0.05
	Forfeited	-		-		-		-
	Exercised	-		-		-		-
	Granted	-		-		-		-
	Balance outstanding, December 31, 2013	1,055,335		$               0.06		4,777,778		$                 0.05
	The exercise price and expiration dates of the broker and share purchase warrants as revised by the Partial Reset (Note 7) is presented as follows:
	Holder		Warrants outstanding		Exercise Price		Expiration date
	Share purchase warrants		2,000,000		$0.05		21-Jul-14
	Share purchase warrants		27,777,778		$0.05		26-Jan-15
	Total share purchase warrants		4,777,778
	Broker warrants		55,335		$0.05		26-Jan-15
	Broker warrants		1,000,000		$0.06		15-Feb-17
	Total broker warrants		1,055,335

Stock_Based_Compensation

Stock Based Compensation	3 Months Ended
	Dec. 31, 2014
Equity [Abstract]	'
Stock Based Compensation	'
	NOTE 12 - STOCK BASED COMPENSATION
	The Company’s board of directors approved a stock and option plan on August 11, 2009 (the “Plan”). The purpose of the Plan is to provide employees and consultants of the Corporation and its Subsidiaries with an increased incentive to make significant and extraordinary contributions to the long-term performance and growth of the Corporation and its Subsidiaries, to join the interests of employees and consultants with the interests of the shareholders of the Corporation, and to facilitate attracting and retaining employees and consultants of exceptional ability. The total number of shares available for grant under the terms of the Plan is 4,000,000. The number of shares subject to the Plan and any outstanding awards will be adjusted appropriately by the Board of Directors if the Company’s common stock is affected through a reorganization, merger, consolidation, recapitalization, restructuring, reclassification dividend (other than quarterly cash dividends) or other distribution, stock split, spin-off or sale of substantially all of the Company’s assets.
	The Plan also has terms and limitations, including without limitations, that the exercise price for stock options granted under the Plan must equal the stock’s fair market value based on the closing price per share of common stock, at the time the stock or option is granted. The fair value of each option award is estimated on the date of grant utilizing the Black-Scholes model and commonly utilized assumptions associated with the Black-Scholes methodology. Options granted under the Plan have a five year maximum term and varying vesting periods as determined by the Board.
	The stock option price is the market price of the share at the date of issuance, but may be changed by the Board of Directors or designee from time to time. The stock options are non-transferable and expire not more than five (5) years from the date of the granting.
	The Company recognizes compensation expense straight-line over the vesting term. Historically, the Company has issued new shares to satisfy exercises of stock options and the Company expects to issue new shares to satisfy any future exercises of stock options.
	On October 10, 2013, the Board of Directors rescinded, from various officers and directors, 2,040,000 options to purchase shares of the Company’s common stock. The rescinded options had a strike price of $0.20 based on the closing price of the Company’s common stock on the date of grant. Also on October 10, 2013, the Board of Directors authorized the grant, to various officers and directors, of 4,000,000 options to purchase shares of the Company’s common stock. The options have a strike price of $0.01 based on the closing price of the Company’s common stock on the date of grant and vest over 9 months.
	The fair value of each option award was estimated on the date of the grant using the information and assumptions noted in the following table:
		10-Oct-13
	Risk-free interest rate	0.68%
	Expected term	3.5 years
	Expected volatility	196%
	Fair value of conversion option derivative units	0.0093
		Number of shares under options	Weighted Average Exercise Price Per Share	Aggregate Intrinsic Value
	Balance outstanding, September 30, 2012	2,040,000	$                   0.20	$                     -
	Forfeited or rescinded	-	-	-
	Exercised	-	-	-
	Granted	-	-	-
	Balance outstanding, September 30, 2013	2,040,000	0.2	-
	Issued	4,000,000	0.01	-
	Exercised	-	-	-
	Forfeited or rescinded	-2,040,000	-0.2	-
	Balance outstanding, December 31, 2013	4,000,000	$                   0.01	$                     -
	A summary of the status of the Company’s non-vested stock options outstanding at September 30, 2013 is presented as follows:
		Number of options	Weighted Average Fair Value Per Share
	Nonvested, September 30, 2012	80,000	$                    0.16
	Granted	-	-
	Vested	-80,000	0.16
	Forfeited	-	-
	Nonvested, September 30, 2013	-	-
	Granted	4,000,000	0.01
	Vested	-1,000,000	-0.01
	Forfeited	-	-
	Nonvested, December 30, 2013	3,000,000	$                    0.01
	The total value of the Plan stock option awards is expensed ratably over the vesting period of the employees receiving the awards. As of December 31, 2013, total unrecognized compensation cost related to stock-based options and awards is $28,080 and the related weighted average period over which it is expected to be recognized is approximately .56 years.
	The average remaining contractual terms of the options both outstanding and exercisable at December 31, 2013, was 4.78 years. No options were exercised during the three months ended December 31, 2013. At December 31, 2013 and 2012, the Company had 4,000,000 options granted and outstanding.
	Total compensation charged against operations under the plan for officers, directors employees and consultants was $9,360 and $3,146 for the three months ended December 31, 2013 and 2012, respectively. These costs are classified under management and administrative expense.
	The aggregate intrinsic value of options exercisable at December 31, 2013, was $Nil based on the Company’s closing price of $0.01 per common share at December 31, 2013.

Related_Party_Transactions

Related Party Transactions	3 Months Ended
	Dec. 31, 2014
Related Party Transactions [Abstract]	'
Related Party Transactions	'
	NOTE 13 - RELATED PARTY TRANSACTIONS
	On December 1, 2011, the Company entered into a four year lease with Marlin Property Management, LLC, an entity owned by the spouse of the Company's former President/CEO and current member of the board of directors. Under the terms of the lease the Company is required to pay $2,500 per month for office space in Coeur d'Alene, Idaho. For the three months ended December 31, 2013 and 2012, $7,500 and $7,500, respectively, were due under the terms of the lease.

Commitments_and_Contingencies

Commitments and Contingencies	3 Months Ended
	Dec. 31, 2014
Commitments and Contingencies Disclosure [Abstract]	'
Commitments and Contingencies	'
	NOTE 14 – COMMITMENTS AND CONTINGENCIES
	On December 1, 2011, the Company entered into an office space lease, with a term of four years, at the fixed monthly rental amount of $2,500. Accordingly, the Company's commitment to make these lease payments for each successive year is $30,000.
	The Company is obligated to pay royalties to holders of oil and natural gas interests in both North Dakota and Kansas operations. The Company also is obligated to pay working interest holders a pro-rata portion of revenue in oil operations net of shared operating expenses. The amounts are based on monthly oil and natural gas sales and are charged monthly net of oil and gas revenue and recognized as "Due to royalty and working interest holders" on the Company's balance sheet.
	On August 1, 2013, the North Dakota Industrial Commission (“NDIC”) submitted an administrative complaint to the State of North Dakota related to plugging and remediation of the Company’s Jenks 1 and Knudsen 1 wells in Crosby, ND. The administrative complaint alleged the Company violated certain portions of the North Dakota Century Code and requested administrative relief against Jayhawk Energy, Inc. for violation of sections of the North Dakota Administrative Code governing the oil and gas industry.
	On or about August 12, 2013, the Company responded to the administrative complaint and entered into settlement negotiations with the NDIC. As a good faith effort, the Company began plugging the Knudsen 1 well on or about December 20, 2013. The work required to plug the Knudsen 1 well was completed on or about January, 01, 2014. The range of associated penalties as proposed by the NDIC was $100,000 to $525,000 for failure to comply (See Note 15 Subsequent Events).
	As September 30, 2013, the Company accrued $330,000 as an estimate of total liability related to the Jenks and Knudsen reclamation. The remaining balance at December 31, 2013 is $275,754 and is classified as “Accrual for North Dakota reclamation complaint”.

Subsequent_Events

Subsequent Events	3 Months Ended
	Dec. 31, 2014
Subsequent Events [Abstract]	'
Subsequent Events	'
	NOTE 15– SUBSEQUENT EVENTS
	On February 18, 2014, the Company entered into a Consent Agreement with the State of North Dakota whereby the Company is required to finish reclamation work, by June 30, 2014, on the two waste water storage pits adjacent to the Jenks 1 and Knudsen 1 wells respectively. Further, the Consent Agreement allows that the Company must plug the “production zone” of the Jenks 1 well and then may apply for a permit to convert the Jenks 1 well to a salt water disposal well. As a part of the Consent Agreement the Company agreed to pay a civil penalty of no less than $105,000, consisting of $25,000 due and payable upon execution of the Consent Agreement and a $16,000 installment per month for four successive months thereafter. Should the Company fail to comply with the terms of the Consent Agreement, the Company is subject to penalties of up to an additional $420,000 (over and above the $105,000 penalty agreed to in the Consent Agreement).

Summary_of_Significant_Account1

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Dec. 31, 2014
Accounting Policies [Abstract]	'
Basis of Presentation	'
	Basis of Presentation
	The unaudited financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information, as well as the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of the Company’s management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the interim financial statements have been included. Operating results for the three months ended December 31, 2013, are not necessarily indicative of the results that may be expected for the full year ending September 30, 2014.
	For further information, refer to the financial statements and footnotes thereto in the Company’s Annual Report on Form 10-K for the year ended September 30, 2013.
Principles of Consolidation	'
	Principles of Consolidation
	The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, JayHawk Gas Transportation Company, after elimination of the intercompany accounts and transactions.
Going Concern	'
	Going Concern
	As shown in the accompanying consolidated financial statements, the Company has incurred annual operating losses since inception. As of December 31, 2013, the Company has limited financial resources with which to achieve the objectives and obtain profitability and positive cash flows. As shown in the accompanying balance sheets and statements of operations, the Company has an accumulated deficit of $24,094,084 and net loss of $67,092 for the three months ended December 31, 2013, and as of that date the Company's current liabilities exceeded its current assets by $2,644,826. Achievement of the Company's objectives will be dependent upon the ability to obtain additional financing, to locate profitable energy properties and generate revenue from current and planned business operations, and control costs. The Company plans to fund its future operations by joint venturing, obtaining additional financing from investors, and attaining additional commercial production. However, there is no assurance that the Company will be able to achieve these objectives, therefore substantial doubt about its ability to continue as a going concern exists. The financial statements do not include adjustments relating to the recoverability of recorded assets nor the implications of associated bankruptcy costs should the Company be unable to continue as a going concern.
Joint Venture Operations	'
	Joint Venture Operations
	In instances where the Company’s oil and gas activities are conducted jointly with others, the Company’s accounts reflect only its proportionate interest in such activities.
Use of Estimates	'
	Use of Estimates
	The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the respective reporting periods. Significant areas requiring the use of management assumptions and estimates relate to asset impairments, asset retirement obligations, stock-based compensation, income taxes and derivatives. Actual results may differ from these estimates and assumptions which could have a material effect on the Company's reported financial position and results of operations.
Income or Loss Per Common Share	'
	Income or Loss Per Common Share
	Basic earnings per share ("EPS") is computed as net income (loss) available to common stockholders divided by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from common shares issuable through stock options, warrants, and other convertible securities.
	The dilutive effect of convertible and outstanding securities at December 31, 2013 and 2012, would be as follows:
		31-Dec-13	31-Dec-12
	Stock options	4,000,000	2,040,000
	Convertible debt	34,028,675	23,279,993
	Warrants	5,833,113	5,999,113
	Total Possible Dilution	43,861,788	31,319,106
	At December 31, 2013 and 2012, respectively, the effect of the Company's outstanding options and common stock equivalents would have been anti-dilutive.
Reclassifications	'
	Reclassifications
	Certain reclassifications have been made to the 2012 financial statements in order to conform to the 2013 presentation. These reclassifications have no effect on net loss, total assets or accumulated deficit as previously reported.
New Accounting Pronouncements	'
	New Accounting Pronouncements
	From time to time, new accounting guidance is issued by the FASB that the Company adopts as of the specified effective date. If not discussed, management believe that the impact of recently issued standards, which are not yet effective, will not have a material impact on its financial statements upon adoption.

Summary_of_Significant_Account2

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Dec. 31, 2014
Accounting Policies [Abstract]	'
Schedule of Securities	'
		31-Dec-13	31-Dec-12
	Stock options	4,000,000	2,040,000
	Convertible debt	34,028,675	23,279,993
	Warrants	5,833,113	5,999,113
	Total Possible Dilution	43,861,788	31,319,106

Fair_Value_of_Financial_Instru1

Fair Value of Financial Instruments (Tables)	3 Months Ended
	Dec. 31, 2014
Investments, All Other Investments [Abstract]	'
Fair Value of Financial Assets and Liabilities	'
		31-Dec-13	30-Sep-13	Input Hierarchy level
	Assets:
	Cash	$                   24,253	$                  96,833	Level 1
	Reclamation bonds	150,268	150,236	Level 1
	Liabilities:
	Conversion option derivative	$                   99,758	$                177,553	Level 2
	Warrant derivative liability	38,050	41,553	Level 2

Unproved_Properties_and_Impair1

Unproved Properties and Impairment (Tables)	3 Months Ended
	Dec. 31, 2014
Extractive Industries [Abstract]	'
Capitalized Costs of Unproved Properties	'
		31-Dec-13	30-Sep-13
	UNPROVED AND DEVELOPED PROPERTIES
	Kansas Girard Project
	Field equipment – Jayhawk Gas Transport Company	$            2,605,871	$            2,605,871
	Field equipment – Girard	579,027	579,027
	Capitalized drilling costs	614,756	614,756
	Subtotal	3,799,654	3,799,654
	Less impairments	-2,432,087	-2,432,087
	Less accumulated DD&A	-1,184,636	-1,172,551
	Unproved and developed properties, net	182,931	195,016
	UNPROVED AND UNDEVELOPED PROPERTIES
	Kansas Girard Project	1,421,199	1,421,199
	Less impairments	-839,363	-839,363
	Less accumulated amortization	-581,836	-581,836
	Girard Project, Net	-	-
	North Dakota Project, net	-	-
	Unproved and undeveloped properties, net	40,325	40,325
	TOTAL UNPROVED PROPERTIES	$                 223,256	$             235,341

Proved_Properties_and_Impairme1

Proved Properties and Impairment (Tables)	3 Months Ended
	Dec. 31, 2014
Accounting Policies [Abstract]	'
Capitalized Costs of Proved Properties	'
		31-Dec-13	30-Sep-13
	Crosby, North Dakota Properties
	Proved reserves	$            2,381,962	$            2,381,962
	Field equipment	1,200,247	1,200,247
	Capitalized drilling costs	416,429	416,429
	Subtotal	3,998,638	3,998,638
	Less impairments	-1,092,302	-1,092,302
	Less accumulated DD&A	-2,664,586	-2,617,952
	Total Proved Oil and Gas Properties	$               241,750	$               288,384

Other_LongTerm_Assets_Tables

Other Long-Term Assets (Tables)	3 Months Ended
	Dec. 31, 2014
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]	'
Other Assets	'
		31-Dec-13	30-Sep-13
	Rental security deposit	$                  1,500	$                  1,500
	Reclamation bonds	150,268	150,236
	TOTAL	$             151,768	$151,735

Derivative_Liabilities_Tables

Derivative Liabilities (Tables)	3 Months Ended
	Dec. 31, 2014
Notes to Financial Statements	'
Fair Value of Conversion Options	'
		31-Dec-13	31-Dec-12
	Risk-free interest rate	0.08% to 0.10%	0.11%
	Expected term	.25 to .50 years	.25 years
	Expected volatility	248.6% to 326.8%	340.90%
	Fair value of conversion option derivative units	$.002 to $0.047	$0.00
Change in Conversion Option Liability	'
		Three months ended December 31,
		2013	2012
	Beginning balance	$              177,553	$              109,414
	Fair value of option units converted	-15,336	-
	Net change in fair value of conversion option liability	-62,459	-44,232
	Ending balance	$                99,758	$                65,182

Asset_Retirement_Obligation_Ta

Asset Retirement Obligation (Tables)	3 Months Ended
	Dec. 31, 2014
Asset Retirement Obligation Disclosure [Abstract]	'
Asset Retirement Obligation	'
		31-Dec-13	31-Dec-12
	Beginning balance	$              146,033	$              187,463
	Liabilities incurred	-	-
	Accretion expense	3,651	4,686
	Ending balance	$              149,684	$              192,149

Broker_and_Share_Purchase_Warr1

Broker and Share Purchase Warrants (Tables)	3 Months Ended
	Dec. 31, 2014
Brokers and Dealers [Abstract]	'
Share Purchase and Broker Warrants	'
		Broker Warrants		Weighted Average Exercise Price		Share Purchase Warrants		Weighted Average Exercise Price
	Balance outstanding, September 30, 2012	221,335		$               0.05		4,777,778		$                 0.05
	Forfeited	-166,000		0.05		-		-
	Exercised	-		-		-		-
	Granted	1,000,000		0.06		-		-
	Balance outstanding, September 30, 2013	1,055,335		$               0.06		4,777,778		$                 0.05
	Forfeited	-		-		-		-
	Exercised	-		-		-		-
	Granted	-		-		-		-
	Balance outstanding, December 31, 2013	1,055,335		$               0.06		4,777,778		$                 0.05
Exercise Price and Expiration Dates	'
	Holder		Warrants outstanding		Exercise Price		Expiration date
	Share purchase warrants		2,000,000		$0.05		21-Jul-14
	Share purchase warrants		27,777,778		$0.05		26-Jan-15
	Total share purchase warrants		4,777,778
	Broker warrants		55,335		$0.05		26-Jan-15
	Broker warrants		1,000,000		$0.06		15-Feb-17
	Total broker warrants		1,055,335

Stock_Based_Compensation_Table

Stock Based Compensation (Tables)	3 Months Ended
	Dec. 31, 2014
Equity [Abstract]	'
Fair Value Option Awards	'
		Number of shares under options	Weighted Average Exercise Price Per Share	Aggregate Intrinsic Value
	Balance outstanding, September 30, 2012	2,040,000	$                   0.20	$                     -
	Forfeited or rescinded	-	-	-
	Exercised	-	-	-
	Granted	-	-	-
	Balance outstanding, September 30, 2013	2,040,000	0.2	-
	Issued	4,000,000	0.01	-
	Exercised	-	-	-
	Forfeited or rescinded	-2,040,000	-0.2	-
	Balance outstanding, December 31, 2013	4,000,000	$                   0.01	$                     -
Schedule of Non-vested Stock Options	'
		Number of options	Weighted Average Fair Value Per Share
	Nonvested, September 30, 2012	80,000	$                    0.16
	Granted	-	-
	Vested	-80,000	0.16
	Forfeited	-	-
	Nonvested, September 30, 2013	-	-
	Granted	4,000,000	0.01
	Vested	-1,000,000	-0.01
	Forfeited	-	-
	Nonvested, December 30, 2013	3,000,000	$                    0.01

Summary_of_Significant_Account3

Summary of Significant Accounting Policies - Schedule of Securities (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Accounting Policies [Abstract]	'	'
Stock options	$4,000,000	$2,040,000
Convertible debt	34,028,675	23,279,993
Warrants	5,833,113	5,999,113
Total Possible Dilution	$43,861,788	$31,319,106

Summary_of_Significant_Account4

Summary of Significant Accounting Policies (Details Narrative) (USD $)	Dec. 31, 2013	Sep. 30, 2013
Accounting Policies [Abstract]	'	'
Accumulated Deficit	($24,094,084)	($24,026,992)