Jayhawk Energy (JYHW) 10-Q 19 Aug 14 2014 Q3 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	9 Months Ended
	Jun. 30, 2015	Aug. 14, 2014
Document And Entity Information	'	'
Entity Registrant Name	'Jayhawk Energy, Inc.	'
Entity Central Index Key	'0001308710	'
Document Type	'10-Q	'
Document Period End Date	30-Jun-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	'Q3	'
Document Fiscal Year Focus	'2014	'

Consolidated_Balance_Sheets_Un

Consolidated Balance Sheets (Unaudited) (USD $)	Jun. 30, 2014	Sep. 30, 2013
Statement of Financial Position [Abstract]	'	'
Cash	$204,764	$96,833
Trade accounts receivable, less allowance for doubtful accounts	98,725	68,497
Other current assets	18,026	10,299
TOTAL CURRENT ASSETS	321,515	175,629
Unproved properties, net (NOTE 4)	202,698	235,341
Proved properties, net (NOTE 5)	168,641	288,384
NET PROPERTY AND EQUIPMENT	371,339	523,725
OTHER LONG-TERM ASSETS	151,820	151,736
TOTAL ASSETS	844,674	851,090
Accounts payable	621,320	571,107
Due to other working and royalty interests	548,807	540,676
Other payables, interest and taxes accrued	391,088	263,292
Accrual for North Dakota reclamation	211,298	330,000
Current portion of promissory note payable	32,071	0
Convertible debenture (NOTE 6)	1,038,687	1,073,687
TOTAL CURRENT LIABILITIES	2,843,271	2,778,762
LONG TERM LIABILITIES	'	'
Convertible debentures, net of discount	10,000	0
Promissory note payable	14,571	0
Conversion option derivative (NOTE 7)	1,151,230	177,553
Warrant derivative liability (NOTE 7)	82,367	41,553
Asset retirement obligation	156,986	146,033
TOTAL LONG TERM LIABILITIES	1,415,154	365,139
TOTAL LIABILITIES	4,258,425	3,143,901
COMMITMENTS AND CONTINGENCIES (NOTE 12)	0	0
Preferred Stock, $.001 par value; 10,000,0000 shares authorized, none issued and outstanding	$0	$0
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	22,316,885	21,657,306
Accumulated deficit	-25,811,011	-24,026,992
TOTAL STOCKHOLDERS' (DEFICIT)	-3,413,751	-2,292,811
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$844,674	$851,090

Consolidated_Balance_Sheets_Pa

Consolidated Balance Sheets (Parenthetical)	Jun. 30, 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	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		9 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
REVENUE	'	'	'	'
Oil sales	$83,994	$109,328	$213,426	$263,154
Gas sales	0	0	0	0
TOTAL GROSS REVENUE	83,994	109,328	213,426	263,154
OPERATING EXPENSE	'	'	'	'
Production costs-oil	260,578	19,065	368,514	98,568
Production costs-natural gas	1,582	3,691	5,501	8,709
Depreciation, depletion, amortization and asset impairment expense	51,750	77,746	152,386	205,527
(Gain) on sales of leases and equipment	0	0	0	-90,721
Accretion of asset retirement obligation	3,651	4,687	10,953	14,060
General and administrative	109,234	79,369	341,434	261,638
TOTAL OPERATING EXPENSES	426,795	184,558	878,788	497,781
OPERATING LOSS	-342,801	-75,230	-665,362	-234,627
OTHER INCOME (EXPENSE)	'	'	'	'
Interest and financing costs	-37,396	-29,614	-94,166	-153,450
Miscellaneous expense	0	-21,971	0	-20,894
Amortization of debt discount	-10,000	0	-10,000	0
Gain (loss) on extinguishment and conversion of debt	-317,460	-1,518,520	-302,124	-1,518,520
Gain (loss) on change in fair value of conversion option derivative	-535,748	1,131,880	-671,553	670,936
Gain (loss) on change in fair value of warrant derivative	-37,294	113,685	-40,814	52,433
TOTAL OTHER INCOME (EXPENSE)	-937,898	-324,540	-1,118,657	-969,495
INCOME (LOSS) BEFORE INCOME TAX	-1,280,699	-399,770	-1,784,019	-1,204,122
Provision for income taxes	0	0	0	0
NET LOSS	($1,280,699)	($399,770)	($1,784,019)	($1,204,122)
Basic and diluted loss per share	$0	$0	$0	$0
Basic and diluted weighted average number shares outstanding	80,375,841	71,187,057	79,837,379	64,235,138

Consolidated_Statements_of_Cas

Consolidated Statements of Cash Flows (Unaudited) (USD $)	9 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:	'	'
Net income (loss)	($1,784,019)	($1,204,122)
Depreciation, depletion and amortization	152,386	205,527
Accretion of asset retirement obligation	10,953	14,060
Amortization of discount on debt	10,000	'
Loss on initial recording of derivative	0	59,200
(Gain) Loss on extinguishment and conversion of debt	302,124	1,518,520
(Gain) Loss on change in fair value of conversion option derivative	671,553	-670,936
(Gain) Loss on change in fair value of warrant derivative	40,814	-52,433
Gain on sale of leases and equipment	0	-90,721
Loss on settlement of litigation	0	21,971
Common stock issued in lieu of interest	0	70,853
Stock based compensation	28,080	9,437
Trade accounts receivable	-30,228	73,759
Other current assets and other long term assets	-7,811	-51,005
Accounts payable	50,212	50,431
Accrual for North Dakota reclamation complaint	-118,702	0
Due to royalty and working interest holders	54,773	-85,469
Other payables, interest and taxes accrued	127,796	-34,544
Net cash used by operating activities	-492,069	-165,472
CASH FLOWS FROM INVESTING ACTIVITIES:	0	138,763
Proceeds from sales of leases and equipment	0	138,763
Net cash provided by investing activities	0	138,763
CASH FLOWS FROM FINANCING ACTIVITIES:	'	'
Proceeds from convertible debentures	600,000	0
Net cash provided by financing activities	600,000	0
Net increase (decrease) in cash	107,931	-26,709
CASH AT BEGINNING OF PERIOD	96,833	74,496
CASH AT END OF PERIOD	204,764	47,787
NON-CASH FINANCING AND INVESTING ACTIVITIES:	'	'
Proceeds from convertible debentures allocated to converion option	600,000	0
Common stock issued for conversion of debentures	35,000	90,313
Due to working interest holders converted to promissory note	$46,642	$0

Organization_and_Description_o

Organization and Description of Business	9 Months Ended
	Jun. 30, 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	9 Months Ended
	Jun. 30, 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 nine months ended June 30, 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 June 30, 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 $25,811,011 and net loss of $1,784,019 for the nine months ended June 30, 2014, and as of that date the Company's current liabilities exceeded its current assets by $2,521,756. 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 June 30, 2014 and 2013 would be as follows:
		30-Jun-14	30-Jun-13
	Stock options	4,000,000	2,040,000
	Convertible debt	110,028,675	37,528,700
	Warrants	5,777,778	5,833,113
	Total Possible Dilution	119,806,453	45,401,813
	At June 30, 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	9 Months Ended
	Jun. 30, 2015
Notes to Financial Statements	'
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 June 30, 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.
		30-Jun-14	30-Sep-13	Input Hierarchy level
	Assets:
	Cash	$              204,764	$            96,833	Level 1
	Reclamation bonds	150,320	150,236	Level 1
	Liabilities:
	Conversion option derivative	$           1,151,230	$          177,553	Level 2
	Warrant derivative liability	82,367	41,553	Level 2

Unproved_Properties_and_Impair

Unproved Properties and Impairment	9 Months Ended
	Jun. 30, 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 June 30, 2014 and September 30, 2013, consists of the following capitalized costs respectively:
		30-Jun-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	-1,205,194	-1,172,551
	Unproved and developed properties, net	162,373	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	$             202,698	$              235,341

Proved_Properties_and_Impairme

Proved Properties and Impairment	9 Months Ended
	Jun. 30, 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:
		30-Jun-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	-2,737,695	-2,617,952
	Total Proved Oil and Gas Properties	$             168,641	$                  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.

Convertible_Debentures

Convertible Debentures	9 Months Ended
	Jun. 30, 2015
Debt Disclosure [Abstract]	'
Convertible Debentures	'
	NOTE 6 - 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 issued December 2009, April 2010 and October 2010 (the “December 2009 Transaction”, the “April 2010 Transaction” and the “October 2010 Transaction”). 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 June 30, 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.
	On June 3, 2014, the Company entered into a Partial Reset of Conversion Price for the 10% Senior Secured Convertible Debentures agreement (the “2014 Partial Reset”) with one of the Investors.  Under the terms of the 2014 Partial Reset, the Investor and the Company agreed to the following terms:
	The Investor has the right to convert, into common stock of the Company, up to two hundred thousand dollars ($200,000) (in addition to the principle amount of the Debentures rest in the 2013 Partial Reset) of the principal amount of the Debentures outstanding at a Conversion Price equal to $0.01.
	The Company has considered the impact of ASC 470-50 “Debt Modifications and Extinguishments” of the 2014 Partial Reset and concluded it constitutes a substantial modification and therefore should be accounted for as an extinguishment of debt. During the three months ended June 30, 2014, the Company recognized a loss on extinguishment of $317,460 representing the change in fair value of the embedded conversion option at the date of modification.
	On June 3, 2014, the Company entered into Securities Purchase Agreements with an institutional investor and the Chairman of the Board of Directors of the Company (each an “Investor” and together the “Investors”), wherein the Company agreed to sell and the Investors agreed to purchase $400,000 (total) of Secured Convertible Debentures. The Debentures are due sixty (60) months from the date of closing. The Debentures are secured by a security agreement granting the Investors a security interest in and to all of the Company’s assets located in the State of Kansas. At closing, the Company also entered into a Stock Pledge Agreement pledging to each Investor, as additional security, all of the Company’s right, title and interest in and to the capital stock of JayHawk Gas Transportation Corporation (a wholly owned subsidiary of the Company and the owner of the Company’s gas transmission pipeline in Kansas).
	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 a conversion price of $0.01 per share, or an aggregate of 40,000,000 shares.
	On June 5, 2014, the Company entered into a Securities Purchase Agreement with an accredited investor (the “Investor”), wherein the Company agreed to sell and the Investor agreed to purchase a $200,000 Secured Convertible Debenture (the “Debenture”). The Debenture is due sixty (60) months from the date of closing. The Debenture is secured by a security agreement granting the Investor a security interest in and to all of the Company’s assets located in the State of Kansas. At closing, the Company will also enter into a Stock Pledge Agreement pledging to the Investor, as additional security, all of the Company’s right, title and interest in and to the capital stock of JayHawk Gas Transportation Corporation (a wholly owned subsidiary of the Company and the owner of the Company’s gas transmission pipeline in Kansas).
	The Debenture is 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 a conversion price of $0.01 per share, or an aggregate of 20,000,000 shares.
	On June 5, 2014, the price for the Company’s common stock exceeded the $0.01 conversion price stated in the debentures. Management determined that the favorable exercise price represented a beneficial conversion feature. Using the intrinsic value method at the debenture date, a total discount of $600,000 was recognized on the debentures. The discount will be amortized over the term of the debentures using the straight-line method, which approximated the effective interest method. The Company recorded $10,000 in interest expense related to the amortization of the discount for the three months ended June 30, 2014. The remaining discount balance was $590,000 at June 30, 2014.

Derivative_Liabilities

Derivative Liabilities	9 Months Ended
	Jun. 30, 2015
Other Liabilities Disclosure [Abstract]	'
Derivative Liabilities	'
	NOTE 7 - DERIVATIVE LIABILITIES
	The debentures issued December 2009, April 2010 and December 2010 as discussed in Note 6 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 issued with the debentures to require derivative 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 June 30, 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 June 30, 2014 and 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:
		30-Jun-14	30-Jun-13
	Risk-free interest rate	.06% to 0.10%	.05% to 0.11%
	Expected term	.25 to .50 years	.25 to .50 years
	Expected volatility	248.6% to 339.3%	277.8% to 375.2%
	Fair value of conversion option derivative units	$.002 to $0.01	$0.0127 to $0.047
	Below is detail of the change in conversion option liability balance for the three months ended June 30, 2014 and 2013, respectively.
		Three months ended June 30,
		2014	2013
	Beginning balance	$            298,022	$             570,358
	Loss on extinguishment and conversion of debt	317,460	1,118,411
	Net change in fair value of conversion option liability	535,748	(1,131,880)
	Ending balance	$         1,151,230	$             556,889
	Below is detail of the change in conversion option liability balance for the nine months ended June 30, 2014 and 2013, respectively.
		Nine months ended June 30,
		2014	2013
	Beginning balance	$           177,553	$            109,414
	Loss on extinguishment and conversion of debt	302,124	1,118,411
	Net change in fair value of conversion option liability	671,553	(670,936)
	Ending balance	$        1,151,230	$            556,889

Common_Stock

Common Stock	9 Months Ended
	Jun. 30, 2015
Equity [Abstract]	'
Common Stock	'
	NOTE 8 - COMMON STOCK
	Nine months ended June 30, 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	9 Months Ended
	Jun. 30, 2015
Brokers and Dealers [Abstract]	'
Broker and Share Purchase Warrants	'
	NOTE 9 - BROKER AND SHARE PURCHASE WARRANTS
	A summary of the Company's share purchase and broker warrants outstanding at June 30, 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	(55,335)	(0.05)	-	-
	Exercised	-	-	-	-
	Granted	-	-	-	-
	Balance outstanding, June 30, 2014	1,000,000	$               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	1,000,000	$0.06	15-Feb-17
	Total broker warrants	1,000,000

Stock_Based_Compensation

Stock Based Compensation	9 Months Ended
	Jun. 30, 2015
Equity [Abstract]	'
Stock Based Compensation	'
	NOTE 10 - 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 and 2013	2,040,000		$                    0.20	$                         -
	Issued	4,000,000		0.01	77,600
	Exercised	-		-	-
	Forfeited or rescinded	(2,040,000)		(0.20)	-
	Balance outstanding, June 30, 2014	4,000,000		$                    0.01	$                77,600
	A summary of the status of the Company’s non-vested stock options outstanding at June 30, 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			-3,000,000	-0.01
	Forfeited			-	-
	Nonvested, June 30, 2014			1,000,000	$                   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 June 30, 2014, total unrecognized compensation cost related to stock-based options and awards is $9,360 and the related weighted average period over which it is expected to be recognized is approximately .25 years.
	The average remaining contractual terms of the options both outstanding and exercisable at June 30, 2014, was 4.28 years. No options were exercised during the three and nine months ended June 30, 2014. At June 30, 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 $28,080 and $9,437, for the three months and nine months ended June 30, 2014 and 2013, respectively. These costs are classified under management and administrative expense.
	The aggregate intrinsic value of options exercisable at June 30, 2014, was $58,200 based on the Company’s closing price of $0.0294 per common share at June 30, 2014.

Related_Party_Transactions

Related Party Transactions	9 Months Ended
	Jun. 30, 2015
Related Party Transactions [Abstract]	'
Related Party Transactions	'
	NOTE 11 - 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 nine months ended June 30, 2014 and 2013, $7,500 and $7,500, and $22,500 and $22,000, respectively, were due under the terms of the lease. The balance due to the related party including common area expenses as of June 30, 2014 was $17,391.

Commitments_and_Contingencies

Commitments and Contingencies	9 Months Ended
	Jun. 30, 2015
Commitments and Contingencies Disclosure [Abstract]	'
Commitments and Contingencies	'
	NOTE 12 – 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 1, 2014. The range of associated penalties as proposed by the NDIC was $100,000 to $525,000 for failure to comply.
	As September 30, 2013, the Company accrued $330,000 as an estimate of total liability related to the Jenks and Knudsen reclamation. On June 30, 2014, the Company revised the estimate related to the Jenks and Knudsen reclamation and accrued an additional $190,947 for completion of remaining remediation. The Company has paid $118,702 through June 30, 2014 toward the estimated total liability. The remaining balance at June 30, 2014 is $211,298 and is classified as “Accrual for North Dakota reclamation”.
	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).
	The Company made the final installment payment of $16,000 to the State of North Dakota on June 26, 2014.

Subsequent_Events

Subsequent Events	9 Months Ended
	Jun. 30, 2015
Subsequent Events [Abstract]	'
Subsequent Events	'
	NOTE 13 – SUBSEQUENT EVENTS
	On July 12, 2014, the Company completed reclamation work on both the Jenks 1 and Knudsen 1 waste water storage pits. Unseasonably heavy rains which saturated the soil and limited safe access to the site by heavy equipment delayed scheduled reclamation until such time as ground conditions improved. The Company also completed plugging of the ‘production zone’ on the Jenks 1 well and has submitted a permit to convert the Jenks 1 well to a salt water disposal well. Final costs incurred approximated the accrual on the consolidated balance sheet at June 30, 2014.

Summary_of_Significant_Account1

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Jun. 30, 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 nine months ended June 30, 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 June 30, 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 $25,811,011 and net loss of $1,784,019 for the nine months ended June 30, 2014, and as of that date the Company's current liabilities exceeded its current assets by $2,521,756. 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 June 30, 2014 and 2013 would be as follows:
		30-Jun-14	30-Jun-13
	Stock options	4,000,000	2,040,000
	Convertible debt	110,028,675	37,528,700
	Warrants	5,777,778	5,833,113
	Total Possible Dilution	119,806,453	45,401,813
	At June 30, 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)	9 Months Ended
	Jun. 30, 2015
Notes to Financial Statements	'
Fair Value Calculation	'
		30-Jun-14	30-Sep-13	Input Hierarchy level
	Assets:
	Cash	$              204,764	$            96,833	Level 1
	Reclamation bonds	150,320	150,236	Level 1
	Liabilities:
	Conversion option derivative	$           1,151,230	$          177,553	Level 2
	Warrant derivative liability	82,367	41,553	Level 2

Unproved_Properties_and_Impair1

Unproved Properties and Impairment (Tables)	9 Months Ended
	Jun. 30, 2015
Extractive Industries [Abstract]	'
Unproved Property	'
		30-Jun-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	-1,205,194	-1,172,551
	Unproved and developed properties, net	162,373	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	$             202,698	$              235,341

Proved_Properties_and_Impairme1

Proved Properties and Impairment (Tables)	9 Months Ended
	Jun. 30, 2015
Extractive Industries [Abstract]	'
Proved Oil and Gas Properties	'
		30-Jun-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	-2,737,695	-2,617,952
	Total Proved Oil and Gas Properties	$             168,641	$                  288,384