Jayhawk Energy (JYHW) 10-Q 20 May 14 2014 Q2 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	6 Months Ended
	Mar. 31, 2015	19-May-14
Document And Entity Information	'	'
Entity Registrant Name	'Jayhawk Energy, Inc.	'
Entity Central Index Key	'0001308710	'
Document Type	'10-Q	'
Document Period End Date	31-Mar-15	'
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	'Q2	'
Document Fiscal Year Focus	'2014	'

Consolidated_Balance_Sheets_Un

Consolidated Balance Sheets (Unaudited) (USD $)	Mar. 31, 2014	Sep. 30, 2013
Statement of Financial Position [Abstract]	'	'
Cash	$3,491	$96,833
Trade accounts receivable, less allowance for doubtful accounts	25,416	68,497
Other current assets	'	10,299
TOTAL CURRENT ASSETS	28,907	175,629
Unproved properties, net (NOTE 4)	211,172	235,341
Proved properties, net (NOTE 5)	211,917	288,384
NET PROPERTY AND EQUIPMENT	423,089	523,725
OTHER LONG-TERM ASSETS (NOTE 6)	151,788	151,736
TOTAL ASSETS	603,784	851,090
Accounts payable	721,792	571,107
Due to other working and royalty interests	554,106	540,676
Other payables, interest and taxes accrued	352,956	263,292
Accrual for North Dakota reclamation complaint (NOTE 14)	182,224	330,000
Convertible debenture (NOTE 7)	1,038,687	1,073,687
TOTAL CURRENT LIABILITIES	2,849,765	2,778,762
Conversion option derivative (NOTE 8)	298,022	177,553
Warrant derivative liability (NOTE 8)	45,073	41,553
Asset retirement obligation (NOTE 9)	153,335	146,033
TOTAL LONG TERM LIABILITIES	496,430	365,139
TOTAL LIABILITIES	3,346,195	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	21,707,526	21,657,306
Accumulated deficit	-24,530,312	-24,026,992
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)	-2,742,411	-2,292,811
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$603,784	$851,090

Consolidated_Balance_Sheets_Pa

Consolidated Balance Sheets (Parenthetical)	Mar. 31, 2014	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	'	'
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		6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
REVENUE	'	'	'	'
Oil sales	$59,405	$42,765	$129,432	$156,213
Gas sales	'	'	'	'
TOTAL GROSS REVENUE	59,405	42,765	129,432	156,213
OPERATING EXPENSE	'	'	'	'
Production costs-oil	76,151	12,922	107,936	81,221
Production costs-natural gas	1,905	2,721	3,919	5,687
Depreciation, depletion, amortization and asset impairment expense	41,917	64,330	100,636	127,780
(Gain) on sales of leases and equipment	'	'	'	-90,721
Accretion of asset retirement obligation	3,651	4,687	7,302	9,373
General and administrative	141,249	92,767	232,200	182,270
TOTAL OPERATING EXPENSES	264,873	177,427	451,993	315,610
OPERATING LOSS	-205,468	-134,662	-322,561	-159,397
OTHER INCOME (EXPENSE)	'	'	'	'
Interest and financing costs	-25,473	-31,340	-56,770	-123,836
Miscellaneous income	'	1,077	'	1,077
Gain on conversion of debt	'	'	15,336	'
Loss on change in fair value of conversion option derivative	-198,264	-505,176	-135,805	-460,944
Loss on change in fair value of warrant derivative	-7,023	-141,580	-3,520	-61,252
TOTAL OTHER INCOME (EXPENSE)	-230,760	-677,019	-180,759	-644,955
INCOME (LOSS) BEFORE INCOME TAX	-436,228	-811,681	-503,320	-804,352
Provision for income taxes	'	'	'	'
NET INCOME (LOSS)	($436,228)	($811,681)	($503,320)	($804,352)
Basic and diluted loss per share	($0.01)	($0.01)	($0.01)	($0.01)
Basic and diluted weighted average number shares outstanding	80,375,841	60,759,178	79,568,149	60,759,178

Consolidated_Statements_of_Cas

Consolidated Statements of Cash Flows (Unaudited) (USD $)	6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:	'	'
Net income (loss)	($503,320)	($804,352)
Depreciation, depletion and amortization	100,636	127,780
Accretion of asset retirement obligation	7,302	9,373
(Gain) Loss on extinguishment and conversion of debt	-15,336	59,200
Loss on change in fair value of conversion option derivative	135,805	460,944
Loss on change in fair value of warrant derivative	3,520	61,252
Gain on sale of leases and equipment	'	-90,721
Stock based compensation	18,720	6,291
Trade accounts receivable	43,081	132,454
Other current assets and other long term assets	10,247	-39,865
Accounts payable	150,685	-28,673
Accrual for North Dakota reclamation complaint	-147,776	'
Due to royalty and working interest holders	13,430	-82,308
Other payables, interest and taxes accrued	89,664	4,733
Net cash used by operating activities	-93,342	-183,892
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	-93,342	-45,129
CASH AT BEGINNING OF PERIOD	96,833	74,496
CASH AT END OF PERIOD	3,491	29,367
NON-CASH FINANCING AND INVESTING ACTIVITIES:	'	'
Common stock issued for conversion of debentures	$35,000	'

Organization_and_Description_o

Organization and Description of Business	6 Months Ended
	Mar. 31, 2015
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 Company (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	6 Months Ended
	Mar. 31, 2015
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 and six months ended March 31, 2014, 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 March 31, 2014, the Company has limited financial resources with which to achieve its business 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 $24,530,312 and net loss of $503,320 for the six months ended March 31, 2014, and as of that date the Company's current liabilities exceeded its current assets by $2,820,858. 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 to 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 exists about its ability to continue as a going concern. 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 March 31, 2014 and 2013 would be as follows:
		31-Mar-14	31-Mar-13
	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 March 31, 2014 and 2013, 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 2013 financial statements in order to conform to the 2014 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	6 Months Ended
	Mar. 31, 2015
Fair Value Disclosures [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 March 31, 2014 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-Mar-14	30-Sep-13	Input Hierarchy level
	Assets:
	Cash	$                   3,491	$              96,833	Level 1
	Reclamation bonds	150,288	150,236	Level 1
	Liabilities:
	Conversion option derivative	$               298,022	$            177,553	Level 2
	Warrant derivative liability	45,073	41,553	Level 2

Unproved_Properties_and_Impair

Unproved Properties and Impairment	6 Months Ended
	Mar. 31, 2015
Extractive Industries [Abstract]	'
Unproved Properties and Impairment	'
	NOTE 4 - UNPROVED PROPERTIES AND IMPAIRMENT
	The total of the Company's investment in unproved properties at March 31, 2014 and September 30, 2013, consists of the following capitalized costs respectively:
		31-Mar-14	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	-1,196,720	-1,172,551
	Unproved and developed properties, net	170,847	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	40,325	40,325
	Unproved and undeveloped properties, net	40,325	40,325
	TOTAL UNPROVED PROPERTIES	$             211,172	$              235,341

Proved_Properties_and_Impairme

Proved Properties and Impairment	6 Months Ended
	Mar. 31, 2015
Extractive Industries [Abstract]	'
Proved Properties and Impairment	'
	NOTE 5 - PROVED PROPERTIES AND IMPAIRMENT
	Net capitalized costs are comprised of the following; detailed by property:
		31-Mar-14	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	-2,694,419	-2,617,952
	Total Proved Oil and Gas Properties	$             211,917	$            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.

Long_Term_Assets

Long Term Assets	6 Months Ended
	Mar. 31, 2015
PROPERTY AND EQUIPMENT	'
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-Mar-14	30-Sep-13
	Rental security deposit	$                 1,500	$                1,500
	Reclamation bonds	150,288	150,236
	TOTAL	$             151,788	$            151,736

Convertible_Debentures

Convertible Debentures	6 Months Ended
	Mar. 31, 2015
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 March 31, 2014;
	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	6 Months Ended
	Mar. 31, 2015
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 bi-furcated 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 March 31, 2014. Additionally common share purchase warrants were issued with an expiration date 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 March 31, 2014 and March 31, 2013, 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-Mar-14	31-Mar-13
	Risk-free interest rate	0.07%	.07% to 0.11%
	Expected term	.25 to .50 years	.25 years
	Expected volatility	301.7% to 326.8%	340.9% to 375.2%
	Fair value of conversion option derivative units	$.002 to $0.01	$              0.0245
	Below is detail of the change in conversion option liability balance for the three months ended March 31, 2014 and March 31, 2013, respectively.
		Three months ended March 31,
		2014	2013
	Beginning balance	$               99,758	$                  65,182
	Fair value of option units converted	-	-
	Net change in fair value of conversion option liability	198,264	505,176
	Ending balance	$             298,022	$                570,358
	Below is detail of the change in conversion option liability balance for the six months ended March 31, 2014 and March 31, 2013, respectively.
		Six months ended March 31,
		2014	2013
	Beginning balance	$             177,553	$             109,414
	Fair value of option units converted	-15,336	-
	Net change in fair value of conversion option liability	135,805	460,944
	Ending balance	$             298,022	$             570,358
	Warrant derivative
	For the three months ended March 31, 2014 and March 31, 2013, 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-Mar-14	31-Mar-13
	Risk-free interest rate	.03% to 0.90%	0.07% 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 warrant derivative units	$               0.0077	$0.0202 to $0.0391
	Below is detail of the change in warrant derivative liability balance for the three months ended March 31, 2014 and March 31, 2013, respectively.
		Three months ended March 31,
		2014	2013
	Beginning balance	$               38,050	$               37,129
	Net change in fair value of warrant derivative liability	7,023	141,580
	Ending balance	$               45,073	$             178,709
	Below is detail of the change in warrant derivative liability balance for the six months ended March 31, 2014 and March 31, 2013, respectively.
		Six months ended March 31,
		2014	2013
	Beginning balance	$               41,553	$               58,257
	Warrant derivative issued for services	-	59,200
	Net change in fair value of warrant derivative liability	3,520	61,252
	Ending balance	$               45,073	$             178,709

Asset_Retirement_Obligation

Asset Retirement Obligation	6 Months Ended
	Mar. 31, 2015
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 charged to accretion expense and for the three and six months ended March 31, 2014 and 2013, was computed to be $3,651 and $7,302, and $4,687 and $9,373,respectively.
	The following table summarizes the change in the asset retirement obligation for the three months ended March 31, 2014 and 2013, respectively.
		Three months ended March 31,
		2014	2013
	Beginning balance	$             149,684	$             192,149
	Liabilities incurred	-	-
	Accretion expense	3,651	4,687
	Ending balance	$             153,335	$             196,836
	The following table summarizes the change in the asset retirement obligation for the six months ended March 31, 2014 and 2013, respectively.
		Six months ended March 31,
		2014	2013
	Beginning balance	$            146,033	$             187,463
	Liabilities incurred	-	-
	Liabilities settled	-	-
	Reduction in present value of liability due to change in estimated costs, net	-	-
	Accretion expense	7,302	9,373
	Ending balance	$            153,335	$             196,836

Common_Stock

Common Stock	6 Months Ended
	Mar. 31, 2015
Equity [Abstract]	'
Common Stock	'
	NOTE 10 - COMMON STOCK
	Six months ended March 31, 2014
	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	6 Months Ended
	Mar. 31, 2015
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 March 31, 2014 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, March 31, 2014	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	2,777,778	$0.05	26-Jan-15
	Total share purchase warrants	4,777,778
	Broker warrants	55,335	$0.05	26-Apr-14
	Broker warrants	1,000,000	$0.06	15-Feb-17
	Total broker warrants	1,055,335

Stock_Based_Compensation

Stock Based Compensation	6 Months Ended
	Mar. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [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.
	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 options		.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, March 31, 2014	4,000,000		$                   0.01	$                         -
	A summary of the status of the Company’s non-vested stock options outstanding at March 31, 2014 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			-2,000,000	-0.01
	Forfeited			-	-
	Nonvested, March 31, 2014			2,000,000	$                   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 March 31, 2014, total unrecognized compensation cost related to stock-based options and awards is $18,720 and the related weighted average period over which it is expected to be recognized is approximately .50 years.
	The average remaining contractual terms of the options both outstanding and exercisable at March 31, 2014, was 4.53 years. No options were exercised during the three months ended March 31, 2014. At March 31, 2014 and 2013, 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, and $18,720 and $6,292, for the three months and six months ended March 31, 2014 and 2013, respectively. These costs are classified under management and administrative expense.
	The aggregate intrinsic value of options exercisable at March 31, 2014, was $Nil based on the Company’s closing price of $0.01 per common share at March 31, 2014.

Related_Party_Transactions

Related Party Transactions	6 Months Ended
	Mar. 31, 2015
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 chairman 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 and six months ended March 31, 2014 and 2013, $7,500 and $7,500, and $15,000 and $15,000, respectively, were due under the terms of the lease. The balance due to the related party including common area expenses as of March 31, 2014 was $31,741.

Commitments_and_Contingencies

Commitments and Contingencies	6 Months Ended
	Mar. 31, 2015
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 March 31, 2014 is $275,754 and is classified as “Accrual for North Dakota reclamation complaint”. The Company has paid $54,246 through March 31, 2014 toward the estimated total liability.
	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).

Susequent_Events

Susequent Events	6 Months Ended
	Mar. 31, 2015
Subsequent Events [Abstract]	'
Susequent Events	'
	NOTE 15 – SUBSEQUENT EVENTS
	On April 18, 2014, the Company entered into a Farmout Agreement (“Agreement”) with Vast Petroleum Corporation (“Vast” or “Vast Petroleum”) covering the Company’s natural gas pipeline and adjacent natural gas wells in Bourbon and Crawford Counties, Kansas.
	Under the terms of the Agreement, Vast shall reinstate production of natural gas, from one or more of the leases, within one year after the execution of the Agreement. Once actual production of natural gas is reinstated from one or more leases, Vast shall have earned 50% interest in the Farmout Area, subject to certain terms and conditions as set forth in the Agreement. Vast also agrees to evaluate, prospect and study the leases to determine whether oil exists in commercially viable quantities and, if so, to drill test wells upon the leases until the sooner of (1) the completion of twenty (20) test wells or (2) Vast discovers that it would be imprudent to drill any additional wells upon the leases.
	Under the terms of the Agreement, Vast shall be assigned all operational rights with respect to the leases and shall operate the leases pursuant to the terms of the Joint Operating Agreement (Vast shall incur all costs associated with the performance of the development requirements as set forth in the Agreement). Once development requirements have been performed by Vast, all parties to the Agreement will be responsible for their respective share of all development and operating expenses. All revenue attributable to the working interest in the leases generated from the sale of oil or gas produced from the leases shall be distributed as forth in the Agreement.

Summary_of_Significant_Account1

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Mar. 31, 2015
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 and six months ended March 31, 2014, 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 March 31, 2014, the Company has limited financial resources with which to achieve its business 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 $24,530,312 and net loss of $503,320 for the six months ended March 31, 2014, and as of that date the Company's current liabilities exceeded its current assets by $2,820,858. 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 to 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 exists about its ability to continue as a going concern. 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 March 31, 2014 and 2013 would be as follows:
		31-Mar-14	31-Mar-13
	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 March 31, 2014 and 2013, 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 2013 financial statements in order to conform to the 2014 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.

Fair_Value_of_Financial_Instru1

Fair Value of Financial Instruments (Tables)	6 Months Ended
	Mar. 31, 2015
Fair Value Disclosures [Abstract]	'
Financial Assets and Liabilities Accounted for At Fair Value	'
		31-Mar-14	30-Sep-13	Input Hierarchy level
	Assets:
	Cash	$                   3,491	$              96,833	Level 1
	Reclamation bonds	150,288	150,236	Level 1
	Liabilities:
	Conversion option derivative	$               298,022	$            177,553	Level 2
	Warrant derivative liability	45,073	41,553	Level 2