| SIGNIFICANT ACCOUNTING POLICIES | NOTE
2 – SIGNIFICANT ACCOUNTING POLICIES The
condensed financial statements included herein are unaudited. However, these condensed financial statements include all adjustments
(consisting of normal recurring adjustments), which, in the opinion of management are necessary for a fair presentation of financial
position, results of operations and cash flows for the interim periods. The results of operations for interim periods are not
necessarily indicative of the results to be expected for an entire year. The preparation of financial statements in accordance
with generally accepted accounting principles in the United States of America (“GAAP”) requires management to make
estimates and assumptions that affect the amounts reported in the Company’s condensed financial statements and accompanying
notes. Actual results could differ materially from those estimates. Certain
information, accounting policies, and footnote disclosures normally included in the financial statements prepared in accordance
with generally accepted accounting principles in the United States of America have been omitted pursuant to certain rules and
regulations of the Securities and Exchange Commission (“SEC”). The condensed financial statements should be read in
conjunction with the audited financial statements for the year ended September 30, 2022, which were included in the Company’s
Annual Report on Form 10-K for the fiscal year ended September 30, 2022 and filed with the Securities and Exchange Commission
on December 29, 2022. Cash GulfSlope
considers highly liquid investments with original maturities to the Company of three months or less to be cash equivalents. There
were no cash equivalents on June 30, 2023 and September 30, 2022. Liquidity
/ Going Concern The
Company has incurred accumulated losses as of June 30, 2023 of $ 69.8 14.7 0.94 2,200 10 10 13.1 Accounts
Receivable The
Company records an accounts receivable for operations expense reimbursements due from joint interest partners and also from normal
operations. The Company estimates allowances for doubtful accounts based on the aged receivable balances and historical losses.
If the Company determines any account to be uncollectible based on significant delinquency or other factors, the receivable and
the underlying asset are assessed for recovery. As of June 30, 2023 and September 30, 2022, there was no allowance for doubtful
accounts receivable. Gross accounts receivable was nil 13,000 Full
Cost Method The
Company uses the full cost method of accounting for its oil and gas exploration and development activities. Under the full cost
method of accounting, all costs associated with successful and unsuccessful exploration and development activities are capitalized
on a country-by-country basis into a single cost center (“full cost pool”). Such costs include property acquisition
costs, geological and geophysical (“G&G”) costs, carrying charges on non-producing properties, costs of drilling
both productive and non-productive wells. Overhead costs, which includes employee compensation and benefits including stock-based
compensation, incurred that are directly related to acquisition, exploration and development activities are capitalized. Interest
expense is capitalized related to unevaluated properties and wells in process during the period in which the Company is incurring
costs and expending resources to get the properties ready for their intended purpose. For significant investments in unproved
properties and major development projects that are not being currently depreciated, depleted, or amortized and on which exploration
or development activities are in progress, interest costs are capitalized. Proceeds from property sales will generally be credited
to the full cost pool, with no gain or loss recognized, unless such a sale would significantly alter the relationship between
capitalized costs and the proved reserves attributable to these costs. A significant alteration would typically involve a sale
of 25 Proved
properties are amortized on a country-by-country basis using the units of production method (“UOP”), whereby capitalized
costs are amortized over total proved reserves. The amortization base in the UOP calculation includes the sum of proved property,
net of accumulated depreciation, depletion and amortization (“DD&A”), estimated future development costs (future
costs to access and develop proved reserves), and asset retirement costs, less related salvage value. The
costs of unproved properties and related capitalized costs (such as G&G costs) are withheld from the amortization calculation
until such time as they are either developed or abandoned. Unproved properties and properties under development are reviewed for
impairment at least quarterly and are determined through an evaluation that considers, among other factors, seismic data, requirements
to relinquish acreage, drilling results, remaining time in the commitment period, remaining capital plan, and political, economic,
and market conditions. In countries where proved reserves exist, exploratory drilling costs associated with dry holes are transferred
to proved properties immediately upon determination that a well is dry and amortized accordingly. In countries where a reserve
base has not yet been established, impairments are charged to earnings. Companies
that use the full cost method of accounting for oil and natural gas exploration and development activities are required to perform
a ceiling test calculation each quarter. The full cost ceiling test is an impairment test prescribed by SEC Regulation S-X Rule
4-10. The ceiling test is performed quarterly, on a country-by-country basis, utilizing the average of prices in effect on the
first day of the month for the preceding twelve-month period. The cost center ceiling is defined as the sum of (a) estimated future
net revenues, discounted at 10 The
Company capitalizes exploratory well costs into oil and gas properties until a determination is made that the well has either
found proved reserves or is impaired. If proved reserves are found, the capitalized exploratory well costs are reclassified to
proved properties. The well costs are charged to expense if the exploratory well is determined to be impaired. As
of June 30, 2023, the Company’s oil and gas properties consisted of unproved properties, other miscellaneous capitalized costs primarily related to seismic data and enhanced processing costs as well as delay rental costs and there are no proved reserves. Asset
Retirement Obligations The
Company’s asset retirement obligations will represent the present value of the estimated future costs associated with plugging
and abandoning oil and natural gas wells, removing production equipment and facilities and restoring the seabed in accordance
with the terms of oil and gas leases and applicable state and federal laws. Determining asset retirement obligations requires
estimates of the costs of plugging and abandoning oil and natural gas wells, removing production equipment and facilities and
restoring the sea bed as well as estimates of the economic lives of the oil and gas wells and future inflation rates. The resulting
estimate of future cash outflows will be discounted using a credit-adjusted risk-free interest rate that corresponds with the
timing of the cash outflows. Cost estimates will consider historical experience, third party estimates, the requirements of oil
and natural gas leases and applicable local, state and federal laws, but do not consider estimated salvage values. Asset retirement
obligations will be recognized when the wells drilled reach total depth or when the production equipment and facilities are installed
or acquired with an associated increase in proved oil and gas property costs. Asset retirement obligations will be accreted each
period through depreciation, depletion and amortization to their expected settlement values with any difference between the actual
cost of settling the asset retirement obligations and recorded amount being recognized as an adjustment to proved oil and gas
property costs. Cash paid to settle asset retirement obligations will be included in net cash provided by operating activities
from continuing operations in the statements of cash flows. On a quarterly basis, when indicators suggest there have been material
changes in the estimates underlying the obligation, the Company reassesses its asset retirement obligations to determine whether
any revisions to the obligations are necessary. At least annually, the Company will assess all of its asset retirement obligations
to determine whether any revisions to the obligations are necessary. Future revisions could occur due to changes in estimated
costs or well economic lives, or if federal or state regulators enact new requirements regarding plugging and abandoning oil and
natural gas wells. Derivative
Financial Instruments The
accounting treatment of derivative financial instruments requires that the Company record certain embedded conversion options
and warrants as liabilities at their fair value as of the inception date of the agreement and at fair value as of each subsequent
balance sheet date with any change in fair value recorded as income or expense. As a result of entering into certain note agreements,
for which such instruments contained a variable conversion feature with no floor, the Company has adopted a sequencing policy
in accordance with ASC 815-40-35-12 whereby all future instruments issued after such variable conversion feature instruments may
be classified as a derivative liability with the exception of instruments related to share-based compensation issued to employees
or directors, as long as the certain variable convertible instruments exist. Basic
and Dilutive Earnings Per Share Basic
income (loss) per share (“EPS”) is computed by dividing net income (loss) (the numerator) by the weighted average
number of common shares outstanding for the period (denominator). Diluted EPS is computed by dividing net income (loss) by the
weighted average number of common shares and potential common shares outstanding (if dilutive) during each period. Potential common
shares include stock options, warrants, and convertible notes payable. The number of potential common shares outstanding relating
to stock options and warrants, is computed using the treasury stock method. The number of potential common shares related to convertible
notes payable is determined using the if-converted method. As
the Company has incurred losses for the three and nine months ended June 30, 2023, and 2022, the potentially dilutive shares are
anti-dilutive and are not added into the loss per share calculations. As of June 30, 2023, and 2022, there were 338,161,581 288,849,968 Use
of Estimates The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those
estimates. Recent
Accounting Pronouncements Not Yet Adopted In
August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)
No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting
for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts
in an entity’s own equity. Additionally, ASU 2020-06 requires the application of the if-converted method to calculate the
impact of convertible instruments on diluted earnings per share (EPS), which is consistent with the Company’s accounting
treatment under the current standard. This standard is effective for small reporting companies who adopt the private Company rules
for fiscal years beginning after December 15, 2023. The adoption of ASU 2020-06 is not expected to have a material impact on the
Company’s financial statements or disclosures. The
Company has evaluated all other recent accounting pronouncements and believes either they are not applicable or that none of them
will have a significant effect on the Company’s financial statements. |
