Jayhawk Energy (JYHW) 10-Q 31 Aug 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Jun. 30, 2015	Aug. 19, 2015
Document And Entity Information
Entity Registrant Name	Jayhawk Energy, Inc.
Entity Central Index Key	1,308,710
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
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		199,725,629
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,015

Balance Sheets (Unaudited)

Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2015	Sep. 30, 2014
CURRENT ASSETS
Cash	$ 161	$ 177,260
Trade accounts receivable	32,922	55,528
Other current assets	13,503	19,490
TOTAL CURRENT ASSETS	46,586	252,278
PROPERTY AND EQUIPMENT
Unproved properties, net	167,000	196,144
Proved properties, net	3,980	82,012
NET PROPERTY AND EQUIPMENT	170,980	278,156
RECLAMATION BONDS AND OTHER LONG TERM ASSETS	151,924	151,846
TOTAL ASSETS	369,490	$ 682,280
CURRENT LIABILITIES
Checks issued and payable	2,413
Accounts payable	717,200	$ 775,227
Due to working and royalty interests	443,894	$ 596,442
Accrued interest related party	235,710
Other payables, interest and taxes accrued	178,930	$ 446,321
Convertible line of credit related party	36,933
Current portion of promissory notes payable	226,612	$ 30,814
Convertible debentures related party	470,439	1,038,687
TOTAL CURRENT LIABILITIES	2,312,131	2,887,491
LONG TERM LIABILITIES
Convertible debentures	130,000	40,000
Promissory notes payable	28,280	5,828
Conversion option derivative	90,515	676,533
Warrant derivative liability	14,345	24,697
Asset retirement obligation	172,684	160,636
TOTAL LONG TERM LIABILITIES	435,824	907,694
TOTAL LIABILITIES	$ 2,747,955	$ 3,795,185
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ DEFICIT
Preferred Stock, $.001 par value; 10,000,000 shares authorized, none issued and outstanding
Common Stock, $.001 par value; 200,000,000 shares authorized; 199,725,629 and 80,375,841 shares issued and outstanding	$ 199,726	$ 80,375
Additional paid in capital	$ 24,991,932	$ 22,313,609
Accumulated deficit	(27,570,123)	(25,506,889)
TOTAL STOCKHOLDERS DEFICIT	(2,378,465)	(3,112,905)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$ 369,490	$ 682,280

Balance Sheets (Parenthetical)

Balance Sheets (Parenthetical) - shares	Jun. 30, 2015	Sep. 30, 2014
Statement of Financial Position [Abstract]
Preferred Stock, $.001 par value, shares authorized	10,000,000	10,000,000
Common Stock, $.001 par value, shares authorized	200,000,000	200,000,000
Preferred Stock, $.001 par value, shares issued and outstanding	0	0
Common Stock, $.001 par value, sahres issued and outstanding	199,725,629	80,375,841

Statements of Operations (Unaud

Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
REVENUE
Oil sales	$ 67,720	$ 83,994	$ 178,414	$ 213,426
Gas sales
TOTAL GROSS REVENUE	$ 67,720	$ 83,994	$ 178,414	$ 213,426
OPERATING EXPENSE
Production costs-oil	65,629	260,578	168,810	368,514
Production costs-natural gas	330	1,582	7,434	5,501
Depreciation, depletion and amortization	32,748	$ 51,750	95,648	$ 152,386
Loss on write-off of equipment	11,528		11,528
Accretion of asset retirement obligation	$ 4,016	$ 3,651	12,048	$ 10,953
North Dakota reclamation			2,306
General and administration	$ 178,621	$ 109,234	391,955	$ 341,434
TOTAL OPERATING EXPENSES	292,872	426,795	689,729	878,788
OPERATING LOSS	(225,152)	(342,801)	(511,315)	(665,362)
OTHER INCOME (EXPENSE)
Interest and financing costs	(858,086)	(37,396)	(966,922)	(94,166)
Amortization of debt discount	(30,000)	$ (10,000)	(90,000)	$ (10,000)
Gain on forgiveness of liabilities	284,750		284,750
Loss on extinguishment of debt	(1,179,688)	$ (317,460)	(1,179,688)	$ (302,124)
Gain (loss) on change in fair value of conversion option derivative	11,105	(535,748)	389,589	(671,553)
Gain (loss) on change in fair value of warrant derivative	(3,759)	(37,294)	10,352	(40,814)
TOTAL OTHER INCOME (EXPENSE)	(1,775,678)	(937,898)	(1,551,919)	(1,118,657)
LOSS BEFORE INCOME TAX	$ (2,000,830)	$ (1,280,699)	$ (2,063,234)	$ (1,784,019)
Provision for income taxes
NET LOSS	$ (2,000,830)	$ (1,280,699)	$ (2,063,234)	$ (1,784,019)
Basic and diluted loss per share	$ (0.01)	$ (0.02)	$ (0.02)	$ (0.02)
Basic and diluted weighted average number of shares outstanding	159,977,347	80,375,841	106,909,676	79,837,379

Statements of Cash Flows (Unaud

Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ (2,063,234)	$ (1,784,019)
Adjustments to reconcile net income (loss) to cash used by operating activities:
Depreciation, depletion and amortization	95,648	152,386
Accretion of asset retirement obligation	12,048	10,953
Amortization and discount on debt	90,000	10,000
Non-cash financing costs	841,585
Loss on write-off of equipment	11,528
Gain on forgiveness of liabilities	(284,750)
Loss on extinguishment of debt	1,179,688	302,124
(Gain) Loss on change in fair value of conversion option derivative	(389,589)	671,553
(Gain) Loss on change in fair value of warrant derivative	$ (10,352)	40,814
Stock based compensation		28,080
Changes in assets and liabilities:
Trade accounts receivable	$ 22,606	(30,228)
Other current assets and other long term asset	5,909	(7,811)
Accounts payable	$ (23,866)	50,212
Accrual for North Dakota reclamation complaint		(118,702)
Due to working and royalty interests	$ 22,877	54,773
Accrued interest related party	235,710
Other payables, interest and taxes accrued	60,929	127,796
Net cash used by operating activities	(193,263)	$ (492,069)
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in checks issued and payable	$ 2,413
Proceeds from convertible debentures		$ 600,000
Principal payments on promissory notes payable	$ (23,182)
Proceeds from convertible line of credit related party	36,933
Net cash provided by financing activities	16,164	$ 600,000
Net decrease in cash	(177,099)	107,931
CASH AT BEGINNING OF PERIOD	177,260	96,833
CASH AT END OF PERIOD	161	204,764
NON-CASH FINANCING AND INVESTING ACTIVITIES:
Proceeds from convertible debentures allocated to conversion option	828,211	600,000
Common stock issued for conversion of debentures	359,287	35,000
Due to working interest holders converted to promissory notes	175,425	$ 46,642
Due to vendor converted to promissory note	34,162
Common stock issued for forgiveness of directors fees	$ 6,000

Organization and Description of

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. (the “Company” or “JayHawk”) and its wholly owned subsidiary, Jayhawk Gas Transportation Company, 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, the Uniontown in Kansas, the 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 Accounti

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 nine months ended June 30, 2015 are not necessarily indicative of the results that may be expected for the full year ending September 30, 2015. 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, 2014. 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 operating losses since inception. As of June 30, 2015, 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 $27,570,123, and as of that date the Company's current liabilities exceeded its current assets by $2,265,545. 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/or lenders, 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. 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 as of June 30, 2015 and 2014, would be as follows: June 30, 2015 June 30, 2014 Stock options 3,400,000 4,000,000 Convertible debt 136,753,350 110,028,675 Warrants 16,000,000 5,777,778 Total possible dilution 156,153,350 119,806,453 At June 30, 2015 and 2014, the effect of the Company's outstanding options and common stock equivalents would have been anti-dilutive. Revenue and Cost Recognition The Company uses the sales method of accounting for oil and gas revenues. Under this method, revenues are recognized based on the actual volumes of gas and oil sold to purchasers. The volume sold may differ from the volumes the Company may be entitled to, based on the Company's individual interest in the property. Periodically, imbalances between production and nomination volumes can occur for various reasons. In cases where imbalances have occurred, a production imbalance receivable or liability will be recorded when determined. Costs associated with production are expensed in the period in which they are incurred. Cash Equivalents The Company considers all highly liquid instruments purchased with maturity of three months or less when acquired to be cash equivalents. Trade Accounts Receivable Trade accounts receivable are carried at original invoice amount less an estimate for doubtful accounts. There was no allowance for doubtful accounts at June 30, 2015 and September 30, 2014. Management determines the allowance by regularly evaluating individual customer receivables and considering a customer's financial condition, credit history and current economic conditions. Trade receivables are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded as income when received. Concentrations All of the Company’s direct operating revenues originate from oil production from its property in Crosby, North Dakota. Each revenue stream is sold to a single customer through month to month contracts. While this creates a customer concentration, there are alternate buyers of the production in the event the sole customer is unable or unwilling to purchase. Property, Plant and Equipment Acquisition costs associated with the acquisition of leases are capitalized when incurred. These consist of costs incurred in obtaining a mineral interest or right in the property, such as a lease, concession, license, production sharing agreement, or other type of agreement granting such rights. In addition, options to lease, brokers' fees, recording fees, legal costs, and other similar costs related to activities in acquiring property interests are capitalized. The Company follows the successful effort method of accounting for oil and gas property as promulgated in Accounting Standards Codification (ASC) Topic 932, "Extractive Activities – Oil and Gas". Under this method of accounting, acquisition costs for proved and unproved properties are capitalized when incurred. Exploration costs, including geological and geophysical costs, the costs of carrying and retaining unproved properties and exploratory dry hole drilling costs, are expensed. Development costs, including the costs to drill and equip development wells, and successful exploratory drilling costs to locate proved reserves are capitalized. Exploratory drilling costs are capitalized when incurred pending the determination of whether a well has found proved reserves. A determination of whether a well has found proved reserves is made shortly after drilling is completed. The determination is based on a process that relies on interpretations of available geologic, geophysics and engineering data. If a well is determined to be successful, the capitalized drilling costs will be reclassified as part of the cost of the well. If a well is determined to be unsuccessful, the capitalized drilling costs will be charged to expense in the period the determination is made. If an exploratory well requires a major capital expenditure before production can begin, the cost of drilling the exploratory well will continue to be carried as an asset pending determination of whether proved reserves have been found only as long as: i) the well has found a sufficient quantity of reserves to justify its completion as a producing well if the required capital expenditure is made and ii) drilling of the additional exploratory wells is under way or firmly planned for the near future. If drilling in the area is not under way or firmly planned, or if the well has not found a commercially producible quantity of reserves, the exploratory well is assumed to be impaired and its costs are charged to expense. In the absence of a determination as to whether the reserves that have been found can be classified as proved, the costs of drilling such an exploratory well is not carried as an asset for more than one year following completion of drilling. If, after that year has passed, a determination that proved reserves exist cannot be made, the well is assumed to be impaired, and its capitalized costs, net of salvage value are charged to expense. Its costs can, however, continue to be capitalized if sufficient quantities of reserves are discovered in the well to justify its completion as a producing well and sufficient progress is made in assessing the reserves and the well's economic and operating feasibility. The Company calculates depletion, depreciation and amortization (DD&A) of capitalized cost of proved oil properties on a field-by-field basis using the units-of-production method based upon proved reserves. In computing DD&A the Company will take into consideration restoration, dismantlement and abandonment cost and the anticipated proceeds from equipment salvage. When applicable, the Company will apply the provisions of ASC Topic 410, "Accounting for Asset Retirement Obligations" ("ASC 410") which provides guidance on accounting for dismantlement and abandonment cost. Support equipment and other property, plant and equipment related to oil and gas production are depreciated on a straight-line basis over their estimated useful lives which range from 5 to 35 years. Property, plant and equipment unrelated to oil and gas producing activities is recorded at cost and depreciated on a straight-line basis over the estimated useful lives of the assets, which range from 3 to 25 years. The Company recognizes a gain or loss on sales or retirement of property, plant and equipment and includes the gain or loss in the results of operations. Impairment of Long-Lived Assets The Company performs separate impairment tests for proved and unproved properties. Proved properties Unproved properties In the case of unproved developed properties, the fair value of property is primarily evaluated based upon the present value of expected revenues directly associated with those assets. An impairment loss would be recognized if the carrying amount of a capitalized asset is not recoverable and exceeds its fair value. Fair Value Measures ASC Topic 820 "Fair Value Measurements and Disclosures" ("ASC 820") requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1: Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2: Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quote prices for similar assets or liabilities in active markets; quoted prices for identical assets in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3: Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. Derivative Instruments The Company has financing arrangements that contain freestanding derivative instruments or hybrid instruments that contained embedded derivative features. In accordance with U.S. GAAP, derivative instruments and hybrid instruments are recognized as either assets or liabilities in the Company’s balance sheet and are measured at fair value with gains or losses recognized in earnings depending on the nature of the derivative or hybrid instruments. Embedded derivatives that are not clearly and closely related to the host contract are bifurcated and recognized at fair value with changes in fair value recognized as either a gain or loss in earnings if they can be reliably measured. When the fair value of embedded derivative features cannot be reliably measured, the Company measures and reports the entire hybrid instrument at fair value with changes in fair value recognized as either a gain or loss in earnings. The Company determines the fair value of derivative instruments and hybrid instruments based on available market data using a Black Scholes model, giving consideration to all of the rights and obligations of each instrument and precluding the use of “blockage” discounts or premiums in determining the fair value of a large block of financial instruments. Fair value under these conditions does not necessarily represent fair value determined using valuation standards that give consideration to blockage discounts and other factors that may be considered by market participants in establishing fair value. Income Tax and Accounting for Uncertainty Income taxes are determined using the liability method in accordance with ASC Topic 740 "Income Taxes" ("ASC 740"). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. In addition, a valuation allowance is established to reduce any deferred tax asset for which it is determined that it is more likely than not that some portion of the deferred tax asset will not be realized. ASC 740 recognizes that the ultimate deductibility of positions taken or expected to be taken on tax returns is often uncertain. It provides guidance on when tax positions claimed by an entity can be recognized and guidance on the dollar amount at which those positions are recorded. In order to recognize the benefits associated with a tax position taken the entity must conclude that the ultimate allowability of the deduction is more likely than not. If the ultimate allowability of the tax position exceeds 50% (more likely than not), the benefit associated with the position is recognized at the largest dollar amount that has more than a 50% likelihood of being realized upon ultimate settlement. Differences between tax positions taken in a tax return and recognized in accordance with the guidance will generally result in (1) an increase in income taxes currently payable or a reduction in an income tax refund receivable or (2) an increase in a deferred tax liability or a decrease in a deferred tax asset, or both (1) and (2). Stock Options Granted to Employees and Non-Employees The Company follows financial accounting standards that require the measurement of the value of employee services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. The Company estimates the fair value of employee stock option awards on the date of grant using a Black-Scholes valuation model which requires management to make certain assumptions regarding: (i) the expected volatility in the market price of the Company's common stock; (ii) dividend yield; (iii) risk-free interest rates; and (iv) the period of time employees are expected to hold the award prior to exercised (referred to as the expected holding period). The expected volatility under this valuation model is based on the current and historical implied volatilities of the Company's common stock. The dividend yield is based on the approved annual dividend rate in effect and current market price of the underlying common stock at the time of grant. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for bonds with maturities ranging from one month to five years. The expected holding period of the awards granted is estimated using the historical exercise behavior of employees. In addition, the Company estimates the expected impact of forfeited awards and recognize stock-based compensation cost only for those awards expected to vest. The Company utilizes historical experience to estimate projected forfeitures. If actual forfeitures are materially different from estimates, stock-based compensation expense could be significantly different from what we have recorded in the current period. The cumulative effect on current and prior periods of a change in the estimated forfeiture rate is recognized as compensation cost in the period of the revision. Stock Granted to Employees and Non-Employees in Lieu of Cash Payments The Company periodically issues shares of its common stock in lieu of cash payments to certain consultants, vendors and employees. The Company follows financial accounting standards that require the measurement of the value of services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. Reclassifications Certain reclassifications have been made to the 2014 financial statements in order to conform to the 2015 presentation. These reclassifications have no effect on net loss, total assets or accumulated deficit as previously reported. New Accounting Pronouncements In August 2014, the FASB issued ASU No. 2014-15—Presentation of Financial Statements—Going Concern. The guidance requires an entity’s management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). If conditions or events exist that raise substantial doubt about an entity’s ability to continue as a going concern, the guidance requires disclosure in the financial statements. The guidance will be effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company is currently evaluating the new standard and its impact on the Company’s consolidated financial statements.

Fair Value of Financial Instrum

Fair Value of Financial Instrument	9 Months Ended
	Jun. 30, 2015
Fair Value Disclosures [Abstract]
Fair Value of Financial Instrument	NOTE 3 - FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying values of cash and cash equivalents, reclamation bonds, convertible line of credit and promissory note payable 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 approximate fair value of the convertible debentures based upon the number of shares into which the debentures are convertible is $1,100,287 using the current market price per share of stock at June 30, 2015. 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, 2015 and September 30, 2014, respectively, and the fair value calculation input hierarchy that the Company has determined has applied to each asset and liability category. June 30, 2015 September 30, 2014 Input Hierarchy level Assets: Cash $ 161 $ 177,260 Level 1 Reclamation bonds 150,924 150,346 Level 1 Liabilities: Conversion option derivative liability $ 90,515 $ 676,533 Level 2 Warrant derivative liability 14,345 24,697 Level 2

Unproved Properties and Impairm

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 and equipment at June 30, 2015 and September 30, 2014, consists of the following capitalized costs respectively: June 30, 2015 September 30, 2014 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 depreciation, depletion and amortization (1,240,892) (1,211,748) Unproved and developed properties, net 126,675 155,819 UNPROVED AND UNDEVELOPED PROPERTIES North Dakota Project, net 40,325 40,325 Unproved and undeveloped properties, net 40,325 40,325 TOTAL UNPROVED PROPERTIES $ 167,000 $ 196,144

Proved Properties and Impairmen

Proved Properties and Impairment	9 Months Ended
	Jun. 30, 2015
Extractive Industries [Abstract]
Proved Properties and Impairment	NOTE 5 - PROVED PROPERTIES AND IMPAIRMENT For the nine months ended June 30, 2015 and 2014, respectively, the Company performed an analysis to determine whether the carrying amounts in its financial statements exceeded the present value of the expected revenues directly associated with the Crosby, North Dakota property. Management determined that the net value reflected in the financial statements did not exceed the present value of such revenues. The total of the Company's investment in proved properties and equipment at June 30, 2015 and September 30, 2014, consists of the following capitalized costs respectively: June 30, 2015 September 30, 2014 Crosby, North Dakota Properties Proved reserves $ 2,381,962 $ 2,381,962 Field equipment 1,200,247 1,200,247 Capitalized drilling costs - 427,957 Subtotal 3,582,209 4,010,166 Less impairments (811,339) (1,092,302) Less accumulated depreciation, depletion and amortization (2,766,890) (2,835,852) TOTAL PROVED OIL AND GAS PROPERTIES $ 3,980 $ 82,012 For the year ended September 30, 2014, 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. During the three months ended June 30, 2015, management scrapped certain capitalized drilling costs and equipment associated with the Jenks and Knudsen wells in Crosby, North Dakota. The Company determined the costs associated with completing the necessary engineering, road improvements and purchase of additional equipment to construct a disposal well exceeded the future benefits of said well. The Company has plugged both the Jenks and Knudsen well bores. The loss on write-off of $11,528 was charged to operations.

Convertible Line of Credit Rela

Convertible Line of Credit Related Party	9 Months Ended
	Jun. 30, 2015
Related Party Transactions [Abstract]
Convertible Line of Credit Related Party	NOTE 6 - CONVERTIBLE LINE OF CREDIT RELATED PARTY On June 30, 2015, the Company entered into a revolving credit loan agreement with Vast Exploration, LLC (the “Lender” or “Vast”). Vast is a controlling shareholder of the Company and an affiliate of Vast Petroleum Corp., an entity that entered into a joint development agreement for the Company’s oil and gas operations in Kansas in May 2014. Vast Petroleum Corp. was not a party to the loan. The Chairman of the board for the Company, is the individual who possesses voting and dispositive authority on behalf of Vast. The loan permits the Company to borrow up to $100,000 with an interest rate equal to 1.5% per month of the unpaid principal balance on the loan. The Company is required to pay principal on demand or, if not sooner demanded, then on or before June 30, 2016. The Company is required to pay interest on demand or, if not sooner demanded, then on the 1st day of each month, commencing August 1, 2015. After demand, interest on the outstanding balance of the Loan will accrue at a rate equal to 2% per month. Vast has the right, at any time after the date of the Loan, at its election, to convert all or part of the Loan into shares of fully paid and non-assessable shares of common stock of the Company. The Lender has the right, at any time after the date of the, at its election, to convert all or part of the loan amount into shares of fully paid and non-assessable shares of common stock of the Company. The conversion price shall be the lesser of (a) $0.01 per share of common stock, (b) 50% of the average of the three lowest trade prices of three separate trading days of Common Stock recorded during the twenty five previous trading days prior to conversion, or (c) the lowest effective price per share granted to any person or entity after the date of this Note to acquire Common Stock, or adjust, whether by operation of purchase price adjustment, settlement agreements, exchange agreements, reset provision, floating conversion or otherwise, any outstanding warrant, option or other right to acquire Common Stock or outstanding Common Stock equivalents, excluding any outstanding warrants or options that existed prior to the date of the loan. As a result of the variable nature of the conversion price, the Company recognize a conversion derivative liability based on the fair value of the conversion units at periodic valuation dates and events (Note 8). As of June 30, 2015, the line of credit balance was $36,933 was convertible to 6,138,450 shares of the Company’s common stock at a share price of $0.006017 based on the aforementioned conversion formula.

Convertible Debentures

Convertible Debentures	9 Months Ended
	Jun. 30, 2015
Debt Disclosure [Abstract]
Convertible Debentures	NOTE 7 - CONVERTIBLE DEBENTURES Modification of debt On November 5, 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. 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 principal 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 considered the impact of ASC 470-50 “Debt Modifications and Extinguishments” of the 2014 Partial Reset and concluded it constituted a substantial modification and therefore should be accounted for as an extinguishment of debt. During the year ended September 30, 2014, the Company recognized a loss on extinguishment of $399,287 representing the change in fair value of the embedded conversion option because of the modification. Fiscal year ended September 30, 2014 On or about June 3, 2014, the Company entered into Securities Purchase Agreements with an institutional investor, and accredited 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. Additionally, each Investor will receive: 1) a Wastewater Disposal Fee; and 2) a Royalty Interest. Wastewater Disposal Fee: the Company agrees to pay each Investor a per barrel fee (the "Disposal Fee") for each barrel of wastewater, which emanates from the Company's five currently producing, as of the original issue date of the Debentures, oil wells located in North Dakota, which is disposed of in the Company's proposed wastewater disposal well to be located in North Dakota (the "Disposal Well"). For a period commencing on the original issue date of the Debentures and continuing for five years or until the Debenture is repaid by the Company, whichever is sooner, the Disposal Fee will be equal to one and no/I 00 dollars ($1.00) per barrel of wastewater disposed of in the Disposal Well. After year five and continuing until each respective Debenture repaid by the Company the Disposal Fee shall be equal to fifty cents ($.50) per barrel of wastewater, emanating from the Company's five currently producing, as of the date the Debenture is issued, oil wells located in North Dakota, disposed of in the Disposal Well. Royalty Interest: beginning on the original issue date of the Debentures and continuing thereafter so long as the Company owns the subject wells, the Company agrees to pay each Investor a one percent (1 %) overriding royalty interest, calculated monthly, on all proceeds received by the Company from sales of crude oil produced from the Company's five (5) then producing, as of the date the Debentures were issued, oil wells located in North Dakota On June 6, 2014, the Registrant 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 $200,000 Secured Convertible Debenture (the “Debenture”). The Debenture is due sixty (60) months from the date of closing (the “Securities Purchase Agreement,” and “Debenture” collectively constitute the “Offering”). The Debenture is secured by a security agreement granting the Investor a security interest in and to all of the Company’s assets located in the State of Kansas. At closing, the Company will also enter into a Stock Pledge Agreement pledging to the Investor, as additional security, all of the Company’s right, title and interest in and to the capital stock of JayHawk Gas Transportion Corporation (a wholly owned subsidiary of the Company and the owner of the Company’s gas transmission pipeline in Kansas). Additionally, the Company agrees to pay the Investor a per barrel fee (the “Disposal Fee”) for each barrel of wastewater, which emanates from the Company’s five (5) currently producing, as of the original issue date of the Debenture, oil wells located in North Dakota, which is disposed of in the Company’s proposed wastewater disposal well to be located in North Dakota (the “Disposal Well”). For a period commencing on the original issue date of the Debenture and continuing for five (5) years or until the Debenture is repaid by the Company, whichever is sooner, the Disposal Fee will be equal to fifty cents ($.50) per barrel of wastewater disposed of in the Disposal Well. Thereafter the Disposal Fee shall be equal to twenty five cents ($.25) per barrel of wastewater, emanating from the Company’s 5 currently producing, as of the date the Debenture is issued, oil wells located in North Dakota, disposed of in the Disposal Well. The Debenture is convertible at any time after the original issue date into a number of shares of the registrant’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 of common stock.On June 3, 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 is being amortized over the term of the debentures using the straight-line method, which approximated the effective interest method. The Company recorded $40,000 in interest expense related to the amortization of the discount for the year ended September 30, 2014. The remaining discount balance was $560,000 at September 30, 2014. For the nine months ended June 30, 2015, the Company recorded $90,000 in interest and finance expense related to the amortization of the discount. The remaining discount balance was $470,000 at June 30, 2015. Nine months ended June 30, 2015 On April 17, 2015, Vast Exploration, LLC (“Vast”) acquired, from the various original institutional holders, the Convertible Debentures originally issued by the Company on or about December 11, 2009, December 30, 2009, April 22, 2010 and October 18, 2010 (collectively the “Convertible Debentures”). Vast also acquired two outstanding convertible debentures originally issued by the Company on or about June 3, 2014, in aggregate amount of $400,000 from an institutional holder and a related party to the Company. On or about April 17, 2015, Vast notified the Company of its intent to hold the Company in default of certain provisions of the Convertible Debentures, including but not limited to additional interest at 18% and recalculating the principal balances to 125% of their face amount retroactive to the last known date of compliance. The increase in principal balance of the debentures as a result of the default at date of notification was $283,188. The increase in additional accrued interest on the debentures as a result of the default at the date of notification was $300,441. The total $583,629 was recognized as interest and finance expense during the three months ended June 30, 2015. As of June 30, 2015, the Convertible Debentures and accrued interest remain in default and consequently are classified as “current liabilities”. Effective April 30, 2015 the Company entered into an agreement, with Vast, to amend the Company’s outstanding convertible debentures held by Vast. Under the terms of the Amendment to Convertible Debentures the “Conversion Price” for the remaining entire outstanding balance owed by the Company under the Convertible Debentures has been reset to $.01 per share. The amendment to the convertible debentures includes a conversion feature that allows the principal and accrued interest of the loans to be converted into common stock of Jayhawk Energy, Inc. at $0.01 per share at the option of related party note holders. These notes and accrued interest as of April 30, 2015, would convert into 207,954,477 shares of Jayhawk Energy, Inc.’s common stock, subject to an increase in the Company’s authorized shares of common stock. The Amendment to Convertible Debentures also eliminated certain provisions of the convertible debentures that required convertible derivative accounting rules to be applied to the convertible debentures (See Note 8). The fair value of the conversion feature prior to amendment of the agreement was $286,952. The Company estimated the fair value of the amended conversion feature to be $1,436,734 which has been recognized as a loss on extinguishment of debt in the Company’s non-operating expenses. The Company recognized extinguishment of debt of $1,179,688. On April 30, 2015, Vast gave the Company written Notice of Conversion of four of the Convertible Debentures (Note 7) into the Company's common stock. Vast converted $828,211 of the principal balance and $359,287 of accrued interest of the debentures for a total conversion of $1,187,498. The conversion price was $0.01 per share The Company issued 118,749,800 shares of its common stock. As a result of the conversion, Vast became the majority shareholder of the Company. The fair value was calculated using Level 2 inputs. The fair value of the amended conversion feature was estimated by applying a Black-Scholes model and using the following conversion variables: Stock price $ .00112 Risk-free interest rate 286.6% Expected term .25 years Expected volatility 286.6% Fair value of conversion option per unit 0.0069 At June 30, 2015, principal payments on debt are due as follows: Year ending June 30, 2015 $ 470,439 Year ending June 30, 2016 - Year ending June 30, 2017 - Year ending June 30, 2018 - Year ending June 30, 2019 600,000 $ 1,070,439

Derivative Liabilities

Derivative Liabilities	9 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Derivative Liabilities	NOTE 8 - DERIVATIVE LIABILITIES The Company had convertible debentures which contained provisions allowing holders of the debentures to convert outstanding debt to shares of the Company's common stock. The debentures 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. During the three months ended June 30, 2015, the Company entered into a modification agreement with the holders of the convertible debentures. The modification agreement changed the conversion price to $0.01 per common share and also specifically eliminated provisions of the debentures requiring conversion derivative accounting. The fair value of the derivative liability on that date of $1,436,734 was charged to ‘additional paid-in capital’. The Company also entered into a convertible line of credit (Note 6), dated June 30, 2015, which contained provisions allowing holders of the note to convert outstanding debt to shares of the Company's common stock. The line of credit contains anti-dilution provisions which call for the debt conversion price 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 to require derivative liability accounting. Management has valued them at fair value using a Black Scholes model with the inputs as indicated below at the date of issuance. Conversion option derivative At June 30, 2015 and 2014, the fair value of conversion options was estimated at the period’s end using the Black-Scholes option pricing model using the following weighted average assumptions. June 30, 2015 2014 Stock price $ 0.0169 $ 0.0294 Risk-free interest rate 0.01% to 0.28% 0.06% to 0.10% Expected term .25 years to 1 year .25 to .50 years Expected volatility 242.5% to 298.6% 248.6% to 339.3% Fair value of conversion option derivative units $0.003 to $0.015 $.002 to $0.01 Below is detail of the change in conversion option liability balance for the three months ended June 30, 2015 and 2014, respectively. For the three months ended June 30, 2015 2014 Beginning balance $ 298,049 $ 298,022 Fair value of derivative conversion option extinguished (286,944) 317,460 Line of credit derivative conversion option liability 90,515 - Net change in fair value of conversion option liability (11,105) 535,748 Ending balance $ 90,515 $ 1,151,230 Below is detail of the change in conversion option liability balance for the nine months ended June 30, 2015 and 2014, respectively. For the nine months ended June 30, 2015 2014 Beginning balance $ 676,533 $ 177,553 Fair value of derivative conversion option extinguished (286,944) 302,124 Line of credit derivative conversion option liability 90,515 Net change in fair value of conversion option liability (389,589) 671,553 Ending balance $ 90,515 $ 1,151,230 Warrant derivative At June 30, 2015 and 2014, respectively, the fair value of warrant derivative liability was estimated using the Black-Scholes option pricing model using the following weighted average assumptions: June 30, 2015 2014 Stock price $ 0.0169 $ 0.0294 Risk-free interest rate 0.56% 0.02% to 0.90% Expected term 1.88 year 1 month to 1 year Expected volatility 274.3% 128.4% to 297.7% Fair value of warrant derivative units $0.0106 $0.0002 to $0.028 Below is detail of the change in warrant derivative liability balance for three months ended June 30, 2015 and 2014, respectively: Three months ended June 30, 2015 2014 Beginning balance $ 10,586 $ 45,073 Net change in fair value of warrant derivative liability 3,759 37,294 Ending balance $ 14,345 $ 82,367 Below is detail of the change in warrant derivative liability balance for nine months ended June 30, 2015 and 2014, respectively: Nine months ended June 30, 2015 2014 Beginning balance $ 24,697 $ 41,553 Net change in fair value of warrant derivative liability (10,352) 40,814 Ending balance $ 14,345 $ 82,367

Stock Based Compensation

Stock Based Compensation	9 Months Ended
	Jun. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock Based Compensation	NOTE 9 - 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 concurrent grant of a replacement award was accounted for as a modification of terms and resulted in an offset to compensation expense of $20,151. 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. The outstanding options have a weighted average remaining term of 3.78 years. No options were exercised during the three months ended June 30, 2015. At June 30, 2015 and 2014, the Company had 3,400,000 options outstanding and exercisable. The following table reflects the summary of changes during the periods ended September 30, 2014 and June 30, 2015: Number of shares under options Weighted Average Exercise Price Per Share Aggregate Intrinsic Value Balance outstanding, September 30, 2013 2,040,000 $ 0.20 $ - Issued 4,000,000 0.01 - Exercised - - - Forfeited or rescinded (2,040,000) (0.20) - Balance outstanding and exercisable, September 30, 2014 4,000,000 $ 0.01 $ - Issued - - - Exercised - - - Forfeited or rescinded (600,000) (0.01) - Balance outstanding and exercisable, June 30, 2015 3,400,000 $ 0.01 $ 23,460 All 3,400,000 options outstanding are fully vested and exercisable at $0.01 per share. As of June 30, 2015, there was no unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan. The Company recognized $Nil and $9,360 of compensation cost related to options vested during the three months ended June 30, 2015 and 2014, respectively. The Company recognized $Nil and $28,080 of compensation cost related to options vested during the nine months ended June 30, 2015 and 2014, respectively These costs are classified under management and administrative expense. The aggregate intrinsic value of options exercisable at June 30, 2015 was $23,460 based on the Company’s closing price of $0.0169 per common share, respectively.

Broker and Share Purchase Warra

Broker and Share Purchase Warrants	9 Months Ended
	Jun. 30, 2015
Brokers and Dealers [Abstract]
Broker and Share Purchase Warrants	NOTE 10 - BROKER AND SHARE PURCHASE WARRANTS A summary of activity of the Company's share purchase and broker warrants outstanding at June 30, 2015 is presented as follows: Broker Warrants Weighted Average Exercise Price Share Purchase Warrants Weighted Average Exercise Price Balance outstanding, September 30, 2013 1,055,335 $ 0.06 4,777,778 $ 0.05 Forfeited or expired (55,335) (0.05) (2,000,000) (0.05) Exercised - - - - Granted - - - - Balance outstanding, September 30, 2014 1,000,000 $ 0.06 2,777,778 $ 0.05 Forfeited or expired - (2,777,778) (0.05) Exercised - - - - Granted - - 15,000,000 0.001 Balance outstanding, June 30, 2015 1,000,000 $ 0.06 15,000,000 $ 0.001 The Broker Warrants expire February 15, 2017 and have an exercise price of $0.06. On April 17, 2015 the Company granted, to four institutional investors, warrants to purchase up to an aggregate of 15,000,000 shares of the Company’s common stock in consideration of the investors waiving the Company’s prior defaults under the Convertible Debentures. The Warrants give the holders thereof the right to purchase common stock of the Company at the purchase price of $0.001 per share and expire on March 17, 2020. The fair value of the warrants issued was $167,442 was charged to interest and financing costs.

Promissory Notes Payable

Promissory Notes Payable	9 Months Ended
	Jun. 30, 2015
Debt Disclosure [Abstract]
Promissory Notes Payable	NOTE 10 - BROKER AND SHARE PURCHASE WARRANTS A summary of activity of the Company's share purchase and broker warrants outstanding at June 30, 2015 is presented as follows: Broker Warrants Weighted Average Exercise Price Share Purchase Warrants Weighted Average Exercise Price Balance outstanding, September 30, 2013 1,055,335 $ 0.06 4,777,778 $ 0.05 Forfeited or expired (55,335) (0.05) (2,000,000) (0.05) Exercised - - - - Granted - - - - Balance outstanding, September 30, 2014 1,000,000 $ 0.06 2,777,778 $ 0.05 Forfeited or expired - (2,777,778) (0.05) Exercised - - - - Granted - - 15,000,000 0.001 Balance outstanding, June 30, 2015 1,000,000 $ 0.06 15,000,000 $ 0.001 The Broker Warrants expire February 15, 2017 and have an exercise price of $0.06. On April 17, 2015 the Company granted, to four institutional investors, warrants to purchase up to an aggregate of 15,000,000 shares of the Company’s common stock in consideration of the investors waiving the Company’s prior defaults under the Convertible Debentures. The Warrants give the holders thereof the right to purchase common stock of the Company at the purchase price of $0.001 per share and expire on March 17, 2020. The fair value of the warrants issued was $167,442 was charged to interest and financing costs.

Related Party Transactions

Related Party Transactions	9 Months Ended
	Jun. 30, 2015
Related Party Transactions [Abstract]
Related Party Transactions	NOTE 12 - RELATED PARTY TRANSACTIONS On or about 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 and nine months ended June 30, 2015 and 2014, $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 June 30, 2015 was $17,113. On or about June 3, 2014, the Company entered into a Securities Purchase Agreement with the former Chairman and current member of the board of directors to sell $200,000 of Secured Convertible Debentures (Note 7). On or about April 17, 2015, the former Chairman assigned for consideration the $200,000 convertible debenture to Vast. On or about April 17, 2015, Vast also was assigned for consideration to the holder a $200,000 convertible debenture held by an institutional investor and also acquired the Convertible Debentures (Note 7) from their original holders. On or about April 17, 2015, Vast notified the Company of its intent to hold the Company in default of certain provisions of the Convertible Debentures, including but not limited to additional interest at 18% and recalculating the principal balances to 125% of their face amount retroactive to the last known date of compliance. On April 17, 2015, the Board of Directors appointed the managing member of Vast Exploration LLC as a director of the Company to fill a vacancy on the Board and in connection with Vast Exploration, LLC’s acquisition of certain Convertible Debentures from institutional investors. The managing member of Vast Exploration LLC will serve as the Chairman of the board of Directors of Jayhawk Energy. The aggregate debenture and accrued interest balance due to the Vast as of June 30, 2015 is $1,106,149 which 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 shares.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Jun. 30, 2015
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	NOTE 13 – COMMITMENTS AND CONTINGENCIES On December 1, 2011, the Company entered into an office space lease with a related party for 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 in January 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. For the year ended September 30, 2014, the Company revised the estimate related to the Jenks and Knudsen reclamation and paid an additional $190,947 for completion of remaining remediation. On February 18, 2014, the Company entered into a Consent Agreement with the State of North Dakota whereby the Company was required to finish reclamation work 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 five successive months thereafter. The Company made the initial $25,000 payment and each subsequent monthly installment payment of $16,000 with the final installment paid to the State of North Dakota on June 26, 2014. As of September 30, 2014 the Company has completed substantially all reclamation work and has paid all fines assessed. 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 set a balance plug on the Knudsen 1 well bore. With respect to the Knudsen 1 site reclamation, under North Dakota statute, the Company is required to re-vegetate the disturbed area with native species or with crops according to reasonable specifications of the surface owner. The Company intends to plant native grass in the Spring and Summer of 2015 and believes it has substantially complied with the standards set for reclamation of the site. Management does not believe the cost of replanting to be material at this time and, therefore, accrues no additional contingent liability. With respect to the Jenks site reclamation (Note 14), management determined the cost to construct a salt water disposal well exceeded the present value of the economic benefit thereof. The Company engaged contractors to plug the Jenks well of which the expected completion date will be during August 2015. On February 12, 2015, the Company entered into a settlement agreement with the Staff of the Corporation Commission of the State of Kansas with respect to a Penalty Order served by the Company for failure to comply with certain portions of the Kansas Administrative Regulations. The Company was found in violation of failure to plug, return to service or temporarily abandon 71 wells and assessed a $7,100 penalty, of which $3,100 was payable immediately, a $2,000 payment due by April 1, 2015 and the final $2,000 payment by May 1, 2015. The Company has subsequently submitted 71 temporary abandonment applications, of which 71 applications were approved. The Company has up to one year to plug the wells, return them to service or file additional temporary abandonment applications. On or about April 17, 2015, as a result of the Vast transaction, the Company reported a Change of Control which triggered certain provisions of a Company officer’s Executive Employment Agreement. The Company accrued a liability of $143,781 which is included in “other payables, taxes and interest accrued” at June 30, 2015. For the three months ended June 30, 2015, the Company charged “general and administrative” expense in the amount of $143,781.

Subsequent Events

Subsequent Events	9 Months Ended
	Jun. 30, 2015
Subsequent Events [Abstract]
Subsequent Events	NOTE 14– SUBSEQUENT EVENTS On August 6, 2015, the Company entered into a Line of Credit Modification Agreement with Vast. The Agreement modifies that certain Revolving Credit Note (Note 6) entered into on June 30, 2015 by the Company for the benefit of Vast.. The Agreement adjusts the maximum principal balance that may be borrowed from $100,000 to $150,000. On July 8, 2015, the Company executed a Contract Operating Agreement (the “Operating Agreement”) with Vast, which was made retroactive to January 01, 2015. Under the terms of the Operating Agreement Vast becomes the “operator of record” for all of the Company’s properties. Vast’s duties include the exclusive responsibility for the operation of the Company’s oil and gas properties, which includes handling routine operations, major operations, reporting services and other miscellaneous services. The Company will pay Vast a monthly fee for services in the amount of $20,000. The Company will remain responsible for all fees, expenses and taxes related to its properties and has agreed to reimburse Vast for any fees, expenses or taxes advanced on the Company’s behalf. The Company has the right to audit the books, records and invoices maintained by Vast in its operation of the Company properties. The term of the Operating Agreement is two years from the effective date. The Operating Agreement automatically renews for successive one year terms until the Company or Vast provide notice of non-renewal. The Operating Agreement includes mutual indemnities and waivers of consequential and punitive damages. The Operating Agreement also includes release and hold harmless provisions for the exclusive benefit of Vast. Finally, the Operating Agreement consents to and ratifies any operational services Vast has provided to the Company prior to the date the Operating Agreement was executed. Vast billed the Company $120,000 for the nine months ended June 30, 2015 which was charged to ‘production expense’ and subsequently billed to working interest partners for their pro-rata share of the expense. Vast is a controlling shareholder of the Company, the contract operator of the Company’s oil and gas properties and an affiliate of Vast Petroleum Corp. – an entity that entered into a joint development agreement for the Company’s oil and gas operations in Kansas in May 2014. Vast Petroleum Corp. was not a party to the Agreements. The Chairman of the Board of Directors for the Company, is the individual who possesses voting and dispositive authority on behalf of Vast. Acting in his capacity of Chairman of the Board of the Company, he recused himself from voting on the approvals of the Line of Credit Modification Agreement and the Contract Operating Agreement, both of which were subsequently approved by the remaining members of the Company’s Board of Directors. On or about August 11, 2015, the Company plugged the Jenks well bore and is taking additional steps to re-vegetate the surrounding disturbed area with native species or with crops according to reasonable specifications of the surface owner. In the event the Company does not comply with the restoring the disturbed area with native species or crops according to reasonable specifications by the land owner, the Company may be subject to fines and penalties up to $1,825,000 and would be subject to post a $120,000 bond with the state to ensure adequate cleanup. Management believes it has substantially complied with the requirements of plugging and abandonment on the Jenks well and expects to complete surface work and replanting by the end of the fiscal year September 30, 2015.

Common Stock

Common Stock	9 Months Ended
	Jun. 30, 2015
Supplemental Cash Flow Elements [Abstract]
Common Stock	NOTE 15– COMMON STOCK On April 30, 2015, Vast gave the Company written Notice of Conversion of four of the Convertible Debentures (Note 7) into the Company's common stock. The holder converted $828,211 of the principal balance and $359,287 of accrued interest of the debentures for a total conversion of $1,187,498. The conversion price was $0.01 per share. The Company issued 118,749,800 shares of its common stock. On June 8, 2015, the Company issued 600,000 shares of its common stock at $0.01 per shares (Note 16) to certain directors of the Company’s board of directors in consideration for accrued board fees.

Gain on Forgiveness of Liabilit

Gain on Forgiveness of Liabilities	9 Months Ended
	Jun. 30, 2015
Debt Disclosure [Abstract]
Gain on Forgiveness of Liabilities	NOTE 16– GAIN ON FORGIVENESS OF LIABLILITIES During the three months ended June 30, 2015, the former President, Chief Executive Officer and Chairman of the board of directors forgave $84,500 of accrued compensation and four members of the Company’s board of directors entered into agreements in which $206,250 of accrued directors fees were forgiven in consideration of 600,000 shares of the Company’s common stock with a fair value of $6,000. The Company recognized ‘gain on forgiveness of liabilities” of $284,750 during the three months ended June 30, 2015.

Summary of Significant Accoun22

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 nine months ended June 30, 2015 are not necessarily indicative of the results that may be expected for the full year ending September 30, 2015. 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, 2014.
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 operating losses since inception. As of June 30, 2015, 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 $27,570,123, and as of that date the Company's current liabilities exceeded its current assets by $2,265,545. 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/or lenders, 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.
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 as of June 30, 2015 and 2014, would be as follows: June 30, 2015 June 30, 2014 Stock options 3,400,000 4,000,000 Convertible debt 136,753,350 110,028,675 Warrants 16,000,000 5,777,778 Total possible dilution 156,153,350 119,806,453 At June 30, 2015 and 2014, the effect of the Company's outstanding options and common stock equivalents would have been anti-dilutive.
Revenue and Cost Recognition	Revenue and Cost Recognition The Company uses the sales method of accounting for oil and gas revenues. Under this method, revenues are recognized based on the actual volumes of gas and oil sold to purchasers. The volume sold may differ from the volumes the Company may be entitled to, based on the Company's individual interest in the property. Periodically, imbalances between production and nomination volumes can occur for various reasons. In cases where imbalances have occurred, a production imbalance receivable or liability will be recorded when determined. Costs associated with production are expensed in the period in which they are incurred.
Cash Equivalents	Cash Equivalents The Company considers all highly liquid instruments purchased with maturity of three months or less when acquired to be cash equivalents.
Trade Accounts Receivable	Trade Accounts Receivable Trade accounts receivable are carried at original invoice amount less an estimate for doubtful accounts. There was no allowance for doubtful accounts at June 30, 2015 and September 30, 2014. Management determines the allowance by regularly evaluating individual customer receivables and considering a customer's financial condition, credit history and current economic conditions. Trade receivables are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded as income when received.
Concentrations	Concentrations All of the Company’s direct operating revenues originate from oil production from its property in Crosby, North Dakota. Each revenue stream is sold to a single customer through month to month contracts. While this creates a customer concentration, there are alternate buyers of the production in the event the sole customer is unable or unwilling to purchase.
Property, Plant and Equipment	Property, Plant and Equipment Acquisition costs associated with the acquisition of leases are capitalized when incurred. These consist of costs incurred in obtaining a mineral interest or right in the property, such as a lease, concession, license, production sharing agreement, or other type of agreement granting such rights. In addition, options to lease, brokers' fees, recording fees, legal costs, and other similar costs related to activities in acquiring property interests are capitalized. The Company follows the successful effort method of accounting for oil and gas property as promulgated in Accounting Standards Codification (ASC) Topic 932, "Extractive Activities – Oil and Gas". Under this method of accounting, acquisition costs for proved and unproved properties are capitalized when incurred. Exploration costs, including geological and geophysical costs, the costs of carrying and retaining unproved properties and exploratory dry hole drilling costs, are expensed. Development costs, including the costs to drill and equip development wells, and successful exploratory drilling costs to locate proved reserves are capitalized. Exploratory drilling costs are capitalized when incurred pending the determination of whether a well has found proved reserves. A determination of whether a well has found proved reserves is made shortly after drilling is completed. The determination is based on a process that relies on interpretations of available geologic, geophysics and engineering data. If a well is determined to be successful, the capitalized drilling costs will be reclassified as part of the cost of the well. If a well is determined to be unsuccessful, the capitalized drilling costs will be charged to expense in the period the determination is made. If an exploratory well requires a major capital expenditure before production can begin, the cost of drilling the exploratory well will continue to be carried as an asset pending determination of whether proved reserves have been found only as long as: i) the well has found a sufficient quantity of reserves to justify its completion as a producing well if the required capital expenditure is made and ii) drilling of the additional exploratory wells is under way or firmly planned for the near future. If drilling in the area is not under way or firmly planned, or if the well has not found a commercially producible quantity of reserves, the exploratory well is assumed to be impaired and its costs are charged to expense. In the absence of a determination as to whether the reserves that have been found can be classified as proved, the costs of drilling such an exploratory well is not carried as an asset for more than one year following completion of drilling. If, after that year has passed, a determination that proved reserves exist cannot be made, the well is assumed to be impaired, and its capitalized costs, net of salvage value are charged to expense. Its costs can, however, continue to be capitalized if sufficient quantities of reserves are discovered in the well to justify its completion as a producing well and sufficient progress is made in assessing the reserves and the well's economic and operating feasibility. The Company calculates depletion, depreciation and amortization (DD&A) of capitalized cost of proved oil properties on a field-by-field basis using the units-of-production method based upon proved reserves. In computing DD&A the Company will take into consideration restoration, dismantlement and abandonment cost and the anticipated proceeds from equipment salvage. When applicable, the Company will apply the provisions of ASC Topic 410, "Accounting for Asset Retirement Obligations" ("ASC 410") which provides guidance on accounting for dismantlement and abandonment cost. Support equipment and other property, plant and equipment related to oil and gas production are depreciated on a straight-line basis over their estimated useful lives which range from 5 to 35 years. Property, plant and equipment unrelated to oil and gas producing activities is recorded at cost and depreciated on a straight-line basis over the estimated useful lives of the assets, which range from 3 to 25 years. The Company recognizes a gain or loss on sales or retirement of property, plant and equipment and includes the gain or loss in the results of operations.
Impairment of Long-Lived Assets	Impairment of Long-Lived Assets The Company performs separate impairment tests for proved and unproved properties. Proved properties Unproved properties In the case of unproved developed properties, the fair value of property is primarily evaluated based upon the present value of expected revenues directly associated with those assets. An impairment loss would be recognized if the carrying amount of a capitalized asset is not recoverable and exceeds its fair value.
Fair Value Measures	Fair Value Measures ASC Topic 820 "Fair Value Measurements and Disclosures" ("ASC 820") requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1: Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2: Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quote prices for similar assets or liabilities in active markets; quoted prices for identical assets in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3: Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
Derivative Instruments	Derivative Instruments The Company has financing arrangements that contain freestanding derivative instruments or hybrid instruments that contained embedded derivative features. In accordance with U.S. GAAP, derivative instruments and hybrid instruments are recognized as either assets or liabilities in the Company’s balance sheet and are measured at fair value with gains or losses recognized in earnings depending on the nature of the derivative or hybrid instruments. Embedded derivatives that are not clearly and closely related to the host contract are bifurcated and recognized at fair value with changes in fair value recognized as either a gain or loss in earnings if they can be reliably measured. When the fair value of embedded derivative features cannot be reliably measured, the Company measures and reports the entire hybrid instrument at fair value with changes in fair value recognized as either a gain or loss in earnings. The Company determines the fair value of derivative instruments and hybrid instruments based on available market data using a Black Scholes model, giving consideration to all of the rights and obligations of each instrument and precluding the use of “blockage” discounts or premiums in determining the fair value of a large block of financial instruments. Fair value under these conditions does not necessarily represent fair value determined using valuation standards that give consideration to blockage discounts and other factors that may be considered by market participants in establishing fair value.
Income Tax and Accounting for Uncertainty	Income Tax and Accounting for Uncertainty Income taxes are determined using the liability method in accordance with ASC Topic 740 "Income Taxes" ("ASC 740"). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. In addition, a valuation allowance is established to reduce any deferred tax asset for which it is determined that it is more likely than not that some portion of the deferred tax asset will not be realized. ASC 740 recognizes that the ultimate deductibility of positions taken or expected to be taken on tax returns is often uncertain. It provides guidance on when tax positions claimed by an entity can be recognized and guidance on the dollar amount at which those positions are recorded. In order to recognize the benefits associated with a tax position taken the entity must conclude that the ultimate allowability of the deduction is more likely than not. If the ultimate allowability of the tax position exceeds 50% (more likely than not), the benefit associated with the position is recognized at the largest dollar amount that has more than a 50% likelihood of being realized upon ultimate settlement. Differences between tax positions taken in a tax return and recognized in accordance with the guidance will generally result in (1) an increase in income taxes currently payable or a reduction in an income tax refund receivable or (2) an increase in a deferred tax liability or a decrease in a deferred tax asset, or both (1) and (2).
Stock Options Granted to Employees and Non-Employees	Stock Options Granted to Employees and Non-Employees The Company follows financial accounting standards that require the measurement of the value of employee services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. The Company estimates the fair value of employee stock option awards on the date of grant using a Black-Scholes valuation model which requires management to make certain assumptions regarding: (i) the expected volatility in the market price of the Company's common stock; (ii) dividend yield; (iii) risk-free interest rates; and (iv) the period of time employees are expected to hold the award prior to exercised (referred to as the expected holding period). The expected volatility under this valuation model is based on the current and historical implied volatilities of the Company's common stock. The dividend yield is based on the approved annual dividend rate in effect and current market price of the underlying common stock at the time of grant. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for bonds with maturities ranging from one month to five years. The expected holding period of the awards granted is estimated using the historical exercise behavior of employees. In addition, the Company estimates the expected impact of forfeited awards and recognize stock-based compensation cost only for those awards expected to vest. The Company utilizes historical experience to estimate projected forfeitures. If actual forfeitures are materially different from estimates, stock-based compensation expense could be significantly different from what we have recorded in the current period. The cumulative effect on current and prior periods of a change in the estimated forfeiture rate is recognized as compensation cost in the period of the revision. Stock Granted to Employees and Non-Employees in Lieu of Cash Payments The Company periodically issues shares of its common stock in lieu of cash payments to certain consultants, vendors and employees. The Company follows financial accounting standards that require the measurement of the value of services received in exchange for an award of an equity instrument based on the grant-date fair value of the award.
Reclassifications	Reclassifications Certain reclassifications have been made to the 2014 financial statements in order to conform to the 2015 presentation. These reclassifications have no effect on net loss, total assets or accumulated deficit as previously reported.
New Accounting Pronouncements	New Accounting Pronouncements In August 2014, the FASB issued ASU No. 2014-15—Presentation of Financial Statements—Going Concern. The guidance requires an entity’s management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). If conditions or events exist that raise substantial doubt about an entity’s ability to continue as a going concern, the guidance requires disclosure in the financial statements. The guidance will be effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company is currently evaluating the new standard and its impact on the Company’s consolidated financial statements.

Unproved Properties and Impai23

Unproved Properties and Impairment (Tables)	9 Months Ended
	Jun. 30, 2015
Extractive Industries [Abstract]
Unproved Properties and Equipment	June 30, 2015 September 30, 2014 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 depreciation, depletion and amortization (1,240,892) (1,211,748) Unproved and developed properties, net 126,675 155,819 UNPROVED AND UNDEVELOPED PROPERTIES North Dakota Project, net 40,325 40,325 Unproved and undeveloped properties, net 40,325 40,325 TOTAL UNPROVED PROPERTIES $ 167,000 $ 196,144

Proved Properties and Impairm24

Proved Properties and Impairment (Tables)	9 Months Ended
	Jun. 30, 2015
Extractive Industries [Abstract]
Schedule of Oil and Gas Properties	June 30, 2015 September 30, 2014 Crosby, North Dakota Properties Proved reserves $ 2,381,962 $ 2,381,962 Field equipment 1,200,247 1,200,247 Capitalized drilling costs - 427,957 Subtotal 3,582,209 4,010,166 Less impairments (811,339) (1,092,302) Less accumulated depreciation, depletion and amortization (2,766,890) (2,835,852) TOTAL PROVED OIL AND GAS PROPERTIES $ 3,980 $ 82,012

Derivative Liabilities (Tables)

Derivative Liabilities (Tables)	9 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Fair Value of Conversion Options	June 30, 2015 2014 Stock price $ 0.0169 $ 0.0294 Risk-free interest rate 0.01% to 0.28% 0.06% to 0.10% Expected term .25 years to 1 year .25 to .50 years Expected volatility 242.5% to 298.6% 248.6% to 339.3% Fair value of conversion option derivative units $0.003 to $0.015 $.002 to $0.01
Schedule of Change in Conversion Option Liability	For the three months ended June 30, 2015 2014 Beginning balance $ 298,049 $ 298,022 Fair value of derivative conversion option extinguished (286,944) 317,460 Line of credit derivative conversion option liability 90,515 - Net change in fair value of conversion option liability (11,105) 535,748 Ending balance $ 90,515 $ 1,151,230 Below is detail of the change in conversion option liability balance for the nine months ended June 30, 2015 and 2014, respectively. For the nine months ended June 30, 2015 2014 Beginning balance $ 676,533 $ 177,553 Fair value of derivative conversion option extinguished (286,944) 302,124 Line of credit derivative conversion option liability 90,515 Net change in fair value of conversion option liability (389,589) 671,553 Ending balance $ 90,515 $ 1,151,230
Schedule of Warrant Options	June 30, 2015 2014 Stock price $ 0.0169 $ 0.0294 Risk-free interest rate 0.56% 0.02% to 0.90% Expected term 1.88 year 1 month to 1 year Expected volatility 274.3% 128.4% to 297.7% Fair value of warrant derivative units $0.0106 $0.0002 to $0.028 Below is detail of the change in warrant derivative liability balance for three months ended June 30, 2015 and 2014, respectively: Three months ended June 30, 2015 2014 Beginning balance $ 10,586 $ 45,073 Net change in fair value of warrant derivative liability 3,759 37,294 Ending balance $ 14,345 $ 82,367 Below is detail of the change in warrant derivative liability balance for nine months ended June 30, 2015 and 2014, respectively: Nine months ended June 30, 2015 2014 Beginning balance $ 24,697 $ 41,553 Net change in fair value of warrant derivative liability (10,352) 40,814 Ending balance $ 14,345 $ 82,367

Convertible Line of Credit Re26

Convertible Line of Credit Related Party (Details Narrative) - USD ($)	Jun. 30, 2015	Sep. 30, 2014
Related Party Transactions [Abstract]
Convertible Debt	$ 130,000	$ 40,000