Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 31, 2015 | Feb. 16, 2016 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2015 | |
Entity Registrant Name | GULFSLOPE ENERGY, INC. | |
Entity Central Index Key | 1,341,726 | |
Current Fiscal Year End Date | --09-30 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,016 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 679,991,952 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Dec. 31, 2015 | Sep. 30, 2015 |
Current Assets | ||
Cash and Cash Equivalents | $ 130,173 | $ 1,428,014 |
Prepaid Expenses and Other Current Assets | 279,235 | 53,883 |
Total Current Assets | 409,408 | 1,481,897 |
Property and Equipment, Net of Depreciation | 57,400 | 70,515 |
Oil and Natural Gas Properties, Full Cost Method of Accounting, Unproved Properties | 6,737,699 | 5,557,183 |
Total Non-Current Assets | 6,795,099 | 5,627,698 |
Total Assets | 7,204,507 | 7,109,595 |
Current Liabilities | ||
Accounts Payable | 404,156 | 178,649 |
Related Party Payable | 278,277 | 263,397 |
Accrued Expenses and Other Payables | 1,352,929 | 1,313,415 |
Accrued Interest Payable | 486,178 | $ 384,531 |
Stock Payable | 11,605 | |
Notes Payable | 191,900 | $ 4,988 |
Loan from Related-Party | 7,955,000 | 7,955,000 |
Total Current Liabilities | 10,680,045 | 10,099,980 |
Total Liabilities | $ 10,680,045 | $ 10,099,980 |
Commitments and Contingencies | ||
Stockholders' Deficit | ||
Preferred Stock; par value ($0.001); Authorized 50,000,000 shares none issued or outstanding | ||
Common Stock; par value ($0.001); Authorized 975,000,000 shares; 670,391,952 and 679,991,952 issued and outstanding, respectively | $ 679,992 | $ 670,391 |
Additional Paid-in-Capital - Stock To Be Issued | 230,000 | |
Additional Paid-in-Capital | $ 24,886,277 | 24,460,484 |
Accumulated Deficit | (29,041,807) | (28,351,260) |
Total Stockholders' Deficit | (3,475,538) | (2,990,385) |
Total Liabilities and Stockholders' Deficit | $ 7,204,507 | $ 7,109,595 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2015 | Sep. 30, 2015 | May. 31, 2014 | May. 30, 2014 |
Statement of Financial Position [Abstract] | ||||
Preferred Stock, par value per share | $ 0.001 | $ 0.001 | ||
Preferred Stock, shares authorized | 50,000,000 | 50,000,000 | ||
Preferred Stock, shares issued | ||||
Preferred Stock, shares outstanding | ||||
Common Stock, par value per share | $ 0.001 | $ 0.001 | ||
Common Stock, shares authorized | 975,000,000 | 975,000,000 | 975,000,000 | 750,000,000 |
Common Stock, shares issued | 670,391,952 | 679,991,952 | ||
Common Stock, shares outstanding | 670,391,952 | 679,991,952 |
Condensed Statements of Operati
Condensed Statements of Operations - USD ($) | 3 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Condensed Statements of Operations [Abstract] | ||
Revenues | ||
Impairment of Oil and Natural Gas Properties | ||
General & Administrative Expenses | $ 587,171 | $ 764,086 |
Net Loss from Operations | $ (587,171) | (764,086) |
Other Income/(Expenses): | ||
Interest Income | 113 | |
Interest Expense | $ (103,376) | (84,218) |
Net Loss Before Income Taxes | $ (690,547) | $ (848,191) |
Provision for Income Taxes | ||
Net Loss | $ (690,547) | $ (848,191) |
Loss Per Share - Basic and Diluted | $ 0 | $ 0 |
Weighted Average Shares Outstanding - Basic and Diluted | 672,198,474 | 660,672,345 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) | 3 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
OPERATING ACTIVITIES | ||
Net Loss | $ (690,547) | $ (848,191) |
Adjustments to reconcile net loss to net cash From Operating Activities: | ||
Depreciation | 13,116 | 13,016 |
Stock Issued for Services | 91,697 | 105,202 |
Changes in Operating Assets and Liabilities | ||
(Increase)/Decrease in Prepaid Expenses | 15,494 | 40,058 |
Increase/(Decrease) in Accounts Payable | 25,883 | 36,357 |
Increase/(Decrease) in Related Party Payable | 14,880 | (60,688) |
Increase/(Decrease) in Accrued Interest | 101,647 | 82,544 |
Increase/(Decrease) in Accrued Liabilities | 39,515 | 50,000 |
Net Cash From Operating Activities | (388,315) | (581,702) |
INVESTING ACTIVITIES | ||
Exploration Costs | $ (855,590) | (965,986) |
Purchase of Equipment | (14,478) | |
Net Cash From Investing Activities | $ (855,590) | (980,464) |
FINANCING ACTIVITIES | ||
Restricted Cash | (113) | |
Payments on Note Payable | $ (53,936) | (41,985) |
Net Cash From Financing Activities | (53,936) | (42,098) |
Net Increase/(Decrease) in Cash | (1,297,841) | (1,604,264) |
Beginning Cash Balance | 1,428,014 | 4,410,302 |
Ending Cash Balance | 130,173 | 2,806,038 |
Supplemental Schedule of Cash Flow Activities | ||
Cash Paid for Interest | 1,729 | $ 1,674 |
Non-cash Financing and Investing Activities | ||
Purchase of Developmental Capital Expenditures Through Issuance of Common Stock | ||
Prepaid Asset Financed by Note Payable | 240,848 | $ 224,361 |
Capital Expenditures Included in Accounts Payable | 188,019 | $ 127,667 |
Capital Expenditures Included in Stock Payable | 11,605 | |
Stock-Based Compensation Capitalized to Unproved Properties | $ 113,697 | $ 113,006 |
ORGANIZATION AND NATURE OF BUSI
ORGANIZATION AND NATURE OF BUSINESS | 3 Months Ended |
Dec. 31, 2015 | |
ORGANIZATION AND NATURE OF BUSINESS [ABSTRACT] | |
ORGANIZATION AND NATURE OF BUSINESS | NOTE 1 ORGANIZATION AND NATURE OF BUSINESS GulfSlope Energy, Inc. (the Company, GulfSlope, our and words of similar import), a Delaware corporation, is an independent crude oil and natural gas exploration company whose interests are concentrated in the United States Gulf of Mexico federal waters offshore Louisiana in less than 800 feet of water depth. The Company has leased 23 federal Outer Continental Shelf blocks (referred to as prospect, portfolio or leases in this Report) and licensed 2.2 million acres of three-dimensional (3-D) seismic data in its area of concentration. Since March 2013, we have been singularly focused on identifying high-potential oil and gas prospects. We have licensed 3-D seismic data covering approximately 2.2 million acres and have evaluated this data using advanced interpretation technologies. As a result of these analyses, we have identified and acquired leases on 19 prospects that we believe may contain economically recoverable hydrocarbon deposits, and we plan to continue to conduct more refined analyses of our prospects as well as target additional lease and property acquisitions. Our activities have been focused exclusively in the federal waters of the Gulf of Mexico. We have given preference to areas with water depths of 800 feet or less where production infrastructure already exists, which we believe will allow for any discoveries to be developed faster and less expensively with the goal to reduce economic risk while increasing returns. As of December 31, 2015, we have no proved reserves. We expect that any drilling activities on our prospects will commence in late fiscal year 2016, or first half of fiscal year 2017 at the earliest. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Dec. 31, 2015 | |
SIGNIFICANT ACCOUNTING POLICIES [ABSTRACT] | |
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 U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the Companys 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 accounting principles generally accepted in the United States of America (GAAP) have been omitted in this Form 10-Q 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, 2015, which were included in the Companys Annual Report on Form 10-K for the fiscal year ended September 30, 2015 and filed with the Securities and Exchange Commission on December 29, 2015. Cash and Cash Equivalents GulfSlope considers highly liquid investments with insignificant interest rate risk and original maturities to the Company of three months or less to be cash equivalents. Cash equivalents consist primarily of interest-bearing bank accounts and money market funds. The Companys cash positions represent assets held in checking and money market accounts. These assets are generally available on a daily or weekly basis and are highly liquid in nature. Liquidity/Going Concern The Company has incurred accumulated losses as of December 31, 2015 of $29,041,807. Further losses are anticipated in developing our business. As a result, our auditors have expressed substantial doubt about our ability to continue as a going concern. As of December 31, 2015, we had $130,173 of unrestricted cash on hand. The Company estimates that it will need to raise a minimum of $5 million to meet its obligations and planned expenditures through December 31, 2016. The Company plans to finance its operations through the issuance of equity, debt financings or joint ventures, further sale of working interests in prospects or bridge financing. Our policy has been to periodically raise funds through sale of equity on a limited basis, to avoid undue dilution while at the early stages of execution of our business plan. Short term needs have been historically funded through loans from executive management and other related parties. There are no assurances that financing will be available with acceptable terms, if at all. If the Company is not successful in obtaining financing, operations would need to be curtailed or ceased. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Full Cost Method The Company uses the full cost method of accounting for oil and gas exploration and development activities. Under the full cost method of accounting, all costs associated with the exploration for and development of oil and gas reserves are capitalized on a country-by-country basis into a single cost center (full cost pool). Such costs include land acquisition costs, geological and geophysical (G&G) expenses, carrying charges on non-producing properties, costs of drilling both productive and non-productive wells and overhead charges directly related to acquisition, exploration and development activities. All of the Companys oil and gas properties are located within the United States, its sole cost center. The costs of unproved properties and related capitalized costs are withheld from the depletion base until such time as they are either developed or abandoned. When proved reserves are assigned or the property is considered to be impaired, the cost of the property or the amount of the impairment is added to costs subject to depletion and full cost ceiling calculations. Capitalized costs that are directly associated with unproved properties acquired by the Company during the current quarter are included in the full cost pool. As of December 31, 2015, the Company had no proved reserves. 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 ceiling limits such pooled costs to the aggregate of the present value of future net revenues attributable to proved crude oil and natural gas reserves discounted at 10% plus the lower of cost or market value of unproved properties less any associated tax effects. If such capitalized costs exceed the ceiling, the Company will record a write-down to the extent of such excess as a non-cash charge to earnings. Any such write-down will reduce earnings in the period of occurrence and results in a lower depreciation, depletion and amortization rate in future periods. A write-down may not be reversed in future periods even though higher oil and natural gas prices may subsequently increase the ceiling. 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% or more of the proved reserves related to a single full cost pool. Basic and Dilutive Earnings Per Share Basic earnings 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 restricted stock. The number of potential common shares outstanding relating to stock options, warrants, and restricted stock is computed using the treasury stock method. As the Company has incurred losses for the three months ended December 31, 2015 and 2014, the potentially dilutive shares are anti-dilutive and are thus not added into the loss per share calculations. As of December 31, 2015 and 2014, there were 52,389,171 and 53,290,166 potentially dilutive shares, respectively. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (ASU No. 2014-09), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in GAAP when it becomes effective. The new standard is effective for annual reporting periods beginning after December 15, 2016. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU No. 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. In August 2014, the FASB issued Accounting Standard Update No. 2014-15 (ASU No. 2014-15), Presentation of Financial Statements Going Concern (Subtopic 205-40) which requires management to assess an entitys ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, ASU No. 2014-15 provides a definition of the term substantial doubt and requires an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). It also requires certain disclosures when substantial doubt is alleviated as a result of consideration of managements plans and requires an express statement and other disclosures when substantial doubt is not alleviated. ASU No. 2014-15 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early application is permitted. We are currently evaluating the accounting implication and do not believe the adoption of ASU 2014-15 to have material impact on our consolidated financial statements, although there may be additional disclosures upon adoption. The Company has evaluated all other recent accounting pronouncements and believes that none of them will have a significant effect on the Companys financial statements. |
OIL AND NATURAL GAS PROPERTIES
OIL AND NATURAL GAS PROPERTIES | 3 Months Ended |
Dec. 31, 2015 | |
OIL AND NATURAL GAS PROPERTIES [ABSTRACT] | |
OIL AND NATURAL GAS PROPERTIES | NOTE 3 OIL AND NATURAL GAS PROPERTIES During March 2014, the Company bid on 23 blocks in the Central Gulf of Mexico Lease Sale 231, conducted by the Bureau of Ocean Energy Management (BOEM). Of those 23 bids, the Company was the high bidder on 22 of 23 blocks. During May and June of 2014, the Company was awarded 21 of the 22 blocks and paid the remaining 80% lease bid amount and the first year lease rentals on all of the awarded blocks. The total amount paid was $8,126,972, which includes the lease deposit amount, the remaining 80% and the first year lease rental payment. In March 2014, the Company entered into a farm-out letter agreement with Texas South Energy, Inc. (Texas South), a related party, relating to five prospects located within the blocks the Company bid on at the Central Gulf of Mexico Lease Sale 231 and received $8.2 million from Texas South. In September 2015, the Company completed the March 2014 farm-out agreement with Texas South. Texas South funded the final $1.8 million under the agreement for a total purchase price of $10 million and acquired a 20% working interest in five prospects. Texas South is obligated to pay its proportionate share of the net annual rental costs related to the prospects. The Company will be the operator of record. In accordance with full cost requirements, the Company recorded the proceeds from the transaction as an adjustment to capitalized costs with no gain recognition. During the period April 1 to September 30, 2014, the Company incurred $1,365,239 in consulting fees and salaries and benefits associated with full-time geoscientists, and $763,767 associated with technological infrastructure, third party hosting services and seismic data. The Company properly capitalized these geological and geophysical (G&G) costs because the Company acquired specific unevaluated properties during the period to which these costs were related. During the period October 1, 2014 to September 30, 2015, the Company incurred $3,231,780 in consulting fees and salaries and benefits associated with full-time geoscientists, and $921,124 associated with technological infrastructure, third party hosting services and seismic data. The Company properly capitalized these G&G costs because the Company acquired specific unevaluated properties during the period that these costs relate to. At March 31, 2015, a portion of these costs, $93,052, specifically related to properties that were not yet acquired were subject to the ceiling limitation test and immediately impaired. In March 2015, the Company competitively bid on four blocks in the Central Gulf of Mexico Lease Sale 235 conducted by BOEM. The Company was the high bidder on three of the four blocks. The Company was awarded two of the three blocks and paid the remaining 80% lease bonus amount and the first year rentals for total consideration of $340,547. During the period October 1, 2015 to December 31, 2015, the Company incurred $833,292 in consulting fees and salaries and benefits associated with full-time geoscientists, and $347,224 associated with technological infrastructure, third party hosting services and seismic data. The Company properly capitalized these G&G costs because the Company owned the specific properties that these costs relate to. These above capitalized exploration costs net of impairment amounts when added to our lease acquisition costs net of the sale of the working interest, result in $6,737,699, the amount of unproved oil and natural gas properties on the Companys balance sheet at December 31, 2015. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Dec. 31, 2015 | |
RELATED PARTY TRANSACTIONS [ABSTRACT] | |
RELATED PARTY TRANSACTIONS | NOTE 4 RELATED PARTY TRANSACTIONS During April through September 2013, the Company entered into convertible promissory notes whereby it borrowed a total of $6,500,000 from John Seitz, its current chief executive officer. The notes are due on demand, bear interest at the rate of 5% per annum, and are convertible into shares of common stock at a conversion price equal to $0.12 per share of common stock (the then offering price of shares of common stock to unaffiliated investors). In May 2013, John Seitz converted $1,200,000 of the aforementioned debt into 10,000,000 shares of common stock, which shares were issued in July 2013. In June of 2014, the Company entered into a promissory note whereby it borrowed a total of $1,160,000 from Mr. Seitz. The note is not convertible, due on demand and bears interest at a rate of 5% per annum. Additionally, during June through August 2015, the Company entered into promissory notes with John Seitz whereby it borrowed a total of $1,250,000. The notes are not convertible, due on demand and bear interest at the rate of 5% per annum. These notes when added to the 2013 and 2014 promissory notes payable to John Seitz bring the total owed to our CEO to $7,710,000. There was a total of $481,585 of unpaid interest associated with these loans included in accrued liabilities within our balance sheet as of December 31, 2015. In August 2015, the Company entered into convertible promissory notes whereby it borrowed a total of $245,000 from Dr. Ronald Bain, its current president and chief operating officer, and his affiliate ConRon Consulting, Inc. The notes are not convertible, due on demand, and bear interest at the rate of 5% per annum. As of December 31, 2015, there was a total of $4,593 accrued interest associated with these loans and the Company has recorded interest expense for the same amount. In October 2013, the Company issued to Brady Rodgers, the Companys Vice President Engineering and Business Development, a ten-year option to purchase 2,000,000 shares of the Companys common stock at an exercise price of $0.12 per share. A fair value of $161,143 was computed using the Black-Scholes option-pricing model, of which $161,143 has been expensed from October 2013 through December 31, 2015. The options vested 50% in October 2014 and 50% in October 2015. Domenica Seitz, CPA, has provided accounting consulting services to the Company. During the three month period ended December 31, 2015, services provided were valued at $14,880 based on market-competitive salaries, time devoted and professional rates. The Company has accrued these amounts, and they are reflected in the December 31, 2015 condensed financial statements. John Seitz has not received a salary since May 31, 2013, the date he commenced serving as our chief executive officer and accordingly, no amount has been accrued on our financial statements. Prior to serving as Chief Executive Officer, John Seitz served as a Company consultant and the Company accrued and subsequently paid $120,000 of consulting compensation owed to Mr. Seitz. As of December 31, 2015, Mr. Seitz beneficially owns 246,834,727 shares of the Companys common stock (including shares issuable upon conversion of the principal amount plus accrued interest of convertible notes held by Mr. Seitz). The Company recognizes that his level of stock ownership significantly aligns his interests with shareholders interests. From time to time, the Compensation Committee may consider compensation arrangements for Mr. Seitz given his continuing contributions and leadership. |
COMMON STOCK_PAID IN CAPITAL
COMMON STOCK/PAID IN CAPITAL | 3 Months Ended |
Dec. 31, 2015 | |
COMMON STOCK/PAID IN CAPITAL [ABSTRACT] | |
COMMON STOCK/PAID IN CAPITAL | NOTE 5 COMMON STOCK/PAID IN CAPITAL In September 2014, the Company awarded 3,030,000 shares of restricted stock to six employees under the Companys 2014 Omnibus Incentive Plan, one-half of which vested in September 2015 and the remaining half vests in September 2016. Shares of the restricted stock awards have been and will be issued to the recipients according to the vesting terms. In April 2015, the Company sold 5,000,000 shares of common stock to two accredited investors in a private placement at a price of $0.10 per share, for gross proceeds of $500,000. The common stock sold had anti-dilution protection that was triggered by a private sale of common stock in September 2015 and 5,000,000 additional shares were issued to the two accredited investors in December 2015. During the fiscal year ended September 30, 2015 the Company issued 1,579,607 shares of its common stock to three vendors as consideration for services rendered in the ordinary course of business. In September 2015, the Company sold 4,600,000 shares of common stock to an accredited investor in a private placement at a purchase price of $0.05 per share for gross proceeds of $230,000. As of September 30, 2015 these shares were not yet issued and have been included in additional paid-in capital shares to be issued on our balance sheet. The shares were issued in December 2015. For the period October 1 to December 31, 2015 the Company recorded a liability for 243,425 shares of its common stock owed to one vendor as consideration for services rendered in the ordinary course of business. These shares have not yet been issued and are reflected on the balance sheet as stock payable. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Dec. 31, 2015 | |
STOCK-BASED COMPENSATION [ABSTRACT] | |
STOCK-BASED COMPENSATION | NOTE 6 STOCK-BASED COMPENSATION Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized over the required vesting period. The Company recognized $205,395 and $218,208 in stock-based compensation during the three months ended December 31, 2015, and December 31, 2014, respectively. A portion of these costs, $113,697 and $113,006 were capitalized to unproved properties and the remainder were recorded as general and administrative expenses, for the three months ended December 31, 2015 and 2014 respectively. The following table summarizes the Companys stock option activity during the three months ended December 31, 2015: Number of Options Weighted Exercise Price Weighted Average Outstanding at September 30, 2015 2,000,000 Granted Exercised Cancelled Outstanding at December 31, 2015 2,000,000 $ 0.12 3.56 Vested and expected to vest 2,000,000 $ 0.12 3.56 Exercisable at December 31, 2015 2,000,000 As of December 31, 2015 there was no stock-based compensation cost related to the stock option grant. There was no intrinsic value for options outstanding as of December 31, 2015. As of December 31, 2015 there was $464,900 of unrecognized stock-based compensation cost related to restricted stock grants that is expected to be expensed over a period of nine months. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Dec. 31, 2015 | |
COMMITMENTS AND CONTINGENCIES [ABSTRACT] | |
COMMITMENTS AND CONTINGENCIES | NOTE 7 COMMITMENTS AND CONTINGENCIES In March 2013, the Company licensed certain seismic data pursuant to two agreements. With respect to the first agreement, as of September 30, 2015, the Company has paid $6,135,500 in cash, with no additional amount due. With respect to the second agreement, as September 30, 2015, the Company has paid $3,009,195 in cash and is obligated to pay $1,003,065 during fiscal 2016. In July 2013, the Company entered into a two-year office lease agreement. The agreement calls for monthly payments of approximately $20,200 for the first twelve months and $20,500 for the second twelve months. In addition, the Company paid a security deposit of $18,760 in July 2013. The office lease has been extended through June 30, 2016 and the monthly payment has remained the same. In May 2014, the Company entered into an agreement with a seismic data reprocessing company in which the Company agreed to purchase an aggregate of $3 million of reprocessing services, of which $1.5 million will be paid in cash and the remaining amount by the issuance of 2 million shares of our common stock using the valuation of $0.75 per share. As of December 31, 2015 approximately $1,146,000 of services have been provided under this agreement. In October 2015, the Company purchased a directors and officers insurance policy for $259,936 and financed $235,861 of the premium by executing a note payable. The balance of the note payable at December 31, 2015 is $189,392. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Dec. 31, 2015 | |
SUBSEQUENT EVENTS [ABSTRACT] | |
SUBSEQUENT EVENTS | NOTE 8 SUBSEQUENT EVENTS The company entered into a promissory note with Dr. Ronald Bain in February 2016 whereby it borrowed a total of $22,000. The note is due on demand, bears interest at the rate of 5% per annum, and the principal amount is convertible at the option of the holder into securities issued by the Company in a future offering, at the same price and terms received by investors. The company entered into a promissory note with John Seitz in February 2016 whereby it borrowed a total of $66,000. The note is due on demand, bears interest at the rate of 5% per annum, and the principal amount is convertible at the option of the holder into securities issued by the Company in a future offering, at the same price and terms received by investors. |
SIGNIFICANT ACCOUNTING POLICI14
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Dec. 31, 2015 | |
ORGANIZATION AND NATURE OF BUSINESS [ABSTRACT] | |
Cash and Cash Equivalents | Cash and Cash Equivalents GulfSlope considers highly liquid investments with insignificant interest rate risk and original maturities to the Company of three months or less to be cash equivalents. Cash equivalents consist primarily of interest-bearing bank accounts and money market funds. The Companys cash positions represent assets held in checking and money market accounts. These assets are generally available on a daily or weekly basis and are highly liquid in nature. |
Liquidity/Going Concern | Liquidity/Going Concern The Company has incurred accumulated losses as of December 31, 2015 of $29,041,807. Further losses are anticipated in developing our business. As a result, our auditors have expressed substantial doubt about our ability to continue as a going concern. As of December 31, 2015, we had $130,173 of unrestricted cash on hand. The Company estimates that it will need to raise a minimum of $5 million to meet its obligations and planned expenditures through December 31, 2016. The Company plans to finance its operations through the issuance of equity, debt financings or joint ventures, further sale of working interests in prospects or bridge financing. Our policy has been to periodically raise funds through sale of equity on a limited basis, to avoid undue dilution while at the early stages of execution of our business plan. Short term needs have been historically funded through loans from executive management and other related parties. There are no assurances that financing will be available with acceptable terms, if at all. If the Company is not successful in obtaining financing, operations would need to be curtailed or ceased. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Full Cost Method | Full Cost Method The Company uses the full cost method of accounting for oil and gas exploration and development activities. Under the full cost method of accounting, all costs associated with the exploration for and development of oil and gas reserves are capitalized on a country-by-country basis into a single cost center (full cost pool). Such costs include land acquisition costs, geological and geophysical (G&G) expenses, carrying charges on non-producing properties, costs of drilling both productive and non-productive wells and overhead charges directly related to acquisition, exploration and development activities. All of the Companys oil and gas properties are located within the United States, its sole cost center. The costs of unproved properties and related capitalized costs are withheld from the depletion base until such time as they are either developed or abandoned. When proved reserves are assigned or the property is considered to be impaired, the cost of the property or the amount of the impairment is added to costs subject to depletion and full cost ceiling calculations. Capitalized costs that are directly associated with unproved properties acquired by the Company during the current quarter are included in the full cost pool. As of December 31, 2015, the Company had no proved reserves. 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 ceiling limits such pooled costs to the aggregate of the present value of future net revenues attributable to proved crude oil and natural gas reserves discounted at 10% plus the lower of cost or market value of unproved properties less any associated tax effects. If such capitalized costs exceed the ceiling, the Company will record a write-down to the extent of such excess as a non-cash charge to earnings. Any such write-down will reduce earnings in the period of occurrence and results in a lower depreciation, depletion and amortization rate in future periods. A write-down may not be reversed in future periods even though higher oil and natural gas prices may subsequently increase the ceiling. 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% or more of the proved reserves related to a single full cost pool. |
Basic and Dilutive Earnings Per Share | Basic and Dilutive Earnings Per Share Basic earnings 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 restricted stock. The number of potential common shares outstanding relating to stock options, warrants, and restricted stock is computed using the treasury stock method. As the Company has incurred losses for the three months ended December 31, 2015 and 2014, the potentially dilutive shares are anti-dilutive and are thus not added into the loss per share calculations. As of December 31, 2015 and 2014, there were 52,389,171 and 53,290,166 potentially dilutive shares, respectively. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (ASU No. 2014-09), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in GAAP when it becomes effective. The new standard is effective for annual reporting periods beginning after December 15, 2016. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU No. 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. In August 2014, the FASB issued Accounting Standard Update No. 2014-15 (ASU No. 2014-15), Presentation of Financial Statements Going Concern (Subtopic 205-40) which requires management to assess an entitys ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, ASU No. 2014-15 provides a definition of the term substantial doubt and requires an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). It also requires certain disclosures when substantial doubt is alleviated as a result of consideration of managements plans and requires an express statement and other disclosures when substantial doubt is not alleviated. ASU No. 2014-15 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early application is permitted. We are currently evaluating the accounting implication and do not believe the adoption of ASU 2014-15 to have material impact on our consolidated financial statements, although there may be additional disclosures upon adoption. The Company has evaluated all other recent accounting pronouncements and believes that none of them will have a significant effect on the Companys financial statements. |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Dec. 31, 2015 | |
STOCK-BASED COMPENSATION [ABSTRACT] | |
Summary of Stock Option Activity | Number of Options Weighted Exercise Price Weighted Average Outstanding at September 30, 2015 2,000,000 Granted Exercised Cancelled Outstanding at December 31, 2015 2,000,000 $ 0.12 3.56 Vested and expected to vest 2,000,000 $ 0.12 3.56 Exercisable at December 31, 2015 2,000,000 |
ORGANIZATION AND NATURE OF BU16
ORGANIZATION AND NATURE OF BUSINESS (Details) | 3 Months Ended |
Dec. 31, 2015aitemft | |
ORGANIZATION AND NATURE OF BUSINESS [ABSTRACT] | |
Minimum depth under water where exploration activities are conducted | ft | 800 |
Number of leased federal outer continental shelf blocks | 23 |
Area of three-dimensional (3-D) seismic data licensed | a | 2,200,000 |
Number of leases acquired of hydrocarbon deposits | 19 |
SIGNIFICANT ACCOUNTING POLICI17
SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
ORGANIZATION AND NATURE OF BUSINESS [ABSTRACT] | ||||
Accumulated losses | $ 29,041,807 | $ 28,351,260 | ||
Cash | 130,173 | $ 2,806,038 | $ 1,428,014 | $ 4,410,302 |
Minimum capital which company estimated to raise to meet its obligations and planned expenditures through December 31, 2016 | $ 5,000,000 | |||
Shares excluded from the computation of diluted loss per share | 52,389,171 | 53,290,166 |
OIL AND GAS PROPERTIES (Details
OIL AND GAS PROPERTIES (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Deferred Costs, Capitalized, Prepaid And Other Assets [Line Items] | |||||||
Impairment of Oil and Natural Gas Properties | $ 93,052 | ||||||
Paid for lease | $ 8,126,972 | ||||||
Proceeds from sale of working interest | $ 8,200,000 | ||||||
Unproved oil and gas properties | $ 6,737,699 | 5,557,183 | |||||
Consulting Fees And Salaries And Benefits [Member] | |||||||
Deferred Costs, Capitalized, Prepaid And Other Assets [Line Items] | |||||||
Exploration costs capitalized during the period | 833,292 | 1,365,239 | 3,231,780 | ||||
Technological Infrastructure And Third Party Hosting Services [Member] | |||||||
Deferred Costs, Capitalized, Prepaid And Other Assets [Line Items] | |||||||
Exploration costs capitalized during the period | 347,224 | $ 763,767 | 921,124 | ||||
Farm Out Letter Agreement Texas South [Member] | |||||||
Deferred Costs, Capitalized, Prepaid And Other Assets [Line Items] | |||||||
Maximum proceeds to be received under farm out agreement | $ 10,000,000 | ||||||
Proceeds received under farm out agreement | $ 1,800,000 | $ 8,200,000 | |||||
Ownership percentage by Texas South | 20.00% | ||||||
Bureau Of Ocean Energy Management [Member] | |||||||
Deferred Costs, Capitalized, Prepaid And Other Assets [Line Items] | |||||||
Paid for lease | $ 340,547 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||||||
Oct. 31, 2013 | May. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2015 | Aug. 31, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Related Party Transaction [Line Items] | ||||||||
Loans from Related Parties | $ 7,955,000 | $ 7,955,000 | ||||||
Exercise price | $ 0.12 | |||||||
Stock-based compensation expense | $ 205,395 | $ 218,208 | ||||||
Accrued expense | $ 486,178 | $ 384,531 | ||||||
Chief Executive Officer [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Interest rate | 5.00% | 5.00% | 5.00% | 5.00% | ||||
Conversion of notes payable, shares | 10,000,000 | |||||||
Debt conversion, price per share | $ 0.12 | |||||||
Loans from Related Parties | $ 7,710,000 | |||||||
Accrued Interest Payable | $ 481,585 | |||||||
Note payable from related party, original amount | $ 1,250,000 | $ 1,160,000 | $ 6,500,000 | |||||
Stock issued for debt | $ 1,200,000 | |||||||
Number of common shares beneficially owned | 246,834,727 | |||||||
Accrued expense | $ 120,000 | |||||||
Domenica Seitz [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Accrued expense | $ 14,880 | |||||||
President [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Interest rate | 5.00% | |||||||
Accrued Interest Payable | $ 4,593 | |||||||
Note payable from related party, original amount | $ 245,000 | |||||||
Brady Rodgers [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Number of common stock shares that can be purchased through options granted | 2,000,000 | |||||||
Exercise price | $ 0.12 | |||||||
Option term | 10 years | |||||||
Stock-based compensation expense | $ 161,143 | |||||||
October 2015 [Member] | Brady Rodgers [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Vesting percentage of options granted | 50.00% | |||||||
October 2014 [Member] | Brady Rodgers [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Vesting percentage of options granted | 50.00% |
COMMON STOCK_PAID IN CAPITAL (D
COMMON STOCK/PAID IN CAPITAL (Details) | Apr. 17, 2015USD ($)$ / sharesshares | Dec. 31, 2015$ / sharesshares | Sep. 30, 2015USD ($)$ / sharesshares | Sep. 30, 2014shares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($) | Sep. 30, 2015$ / sharesshares |
Common Stock Issuance [Line Items] | |||||||
Stock issued for services | $ | $ 91,697 | $ 105,202 | |||||
Shares of stock issued for services | 1,579,607 | ||||||
Private Placement [Member] | |||||||
Common Stock Issuance [Line Items] | |||||||
Common stock issued for cash, shares | 5,000,000 | 4,600,000 | |||||
Common stock issued for cash | $ | $ 500,000 | $ 230,000 | |||||
Shares issued, price per share | $ / shares | $ 0.10 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | ||
Common stock payable, shares | 5,000,000 | 5,000,000 | |||||
Common stock issued under anti-dilution protection, shares | 5,000,000 | ||||||
Employees [Member] | |||||||
Common Stock Issuance [Line Items] | |||||||
Shares of stock issued for services | 3,030,000 | ||||||
Number of individuals to whom restricted stock awarded | 6 | ||||||
Vendor [Member] | |||||||
Common Stock Issuance [Line Items] | |||||||
Common stock payable, shares | 243,425 | 243,425 |
STOCK-BASED COMPENSATION (Narra
STOCK-BASED COMPENSATION (Narrative) (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
STOCK-BASED COMPENSATION [ABSTRACT] | ||
Amortization of employee stock options and restricted stock | $ 856,125 | $ 210,928 |
Stock-based compensation expense | 205,395 | 218,208 |
Stock-Based Compensation Capitalized to Unproved Properties | 113,697 | $ 113,006 |
Unrecognized compensation cost related to stock options | $ 464,900 |
STOCK-BASED COMPENSATION (Summa
STOCK-BASED COMPENSATION (Summary of Stock Options Activity) (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2015 | Sep. 30, 2015 | |
Number of Options | ||
Outstanding at September 30, 2015 | 2,000,000 | |
Granted | ||
Exercised | ||
Cancelled | ||
Outstanding at December 31, 2015 | 2,000,000 | |
Vested and expected to vest | 2,000,000 | |
Exercisable at December 31, 2015 | 2,000,000 | |
Weighted Average Exercise Price | ||
Granted | ||
Exercised | ||
Cancelled | ||
Outstanding at December 31, 2015 | $ 0.12 | |
Vested and expected to vest | $ 0.12 | |
Exercisable at December 31, 2015 | ||
Weighted Average Remaining Contractual Term | ||
Outstanding at December 31, 2015 | 3 years 6 months 22 days | |
Vested and expected to vest | 3 years 6 months 22 days | |
Average Intrinsic Value | ||
Exercisable at December 31, 2015 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 20 Months Ended | 31 Months Ended | |||
Oct. 31, 2015 | May. 31, 2014 | Jul. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Sep. 30, 2015 | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |||||||
Payments for exploration costs | $ 855,590 | $ 965,986 | |||||
Security deposit | $ 18,760 | ||||||
Aggregate purchase of reprocessing services | $ 3,000,000 | ||||||
Reprocessing services purchase payment in cash | $ 1,500,000 | ||||||
Shares issued for reprocessing services purchase | 2,000,000 | ||||||
Services provided under reprocessing agreement | $ 1,146,000 | ||||||
Insurance policy purchased | $ 259,936 | ||||||
Amount of premium paid by executing a note payable | $ 235,861 | ||||||
Prepaid asset financed by note payable, outstanding amount | 189,392 | 189,392 | |||||
First Period [Member] | |||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |||||||
Agreement monthly amount | 20,200 | ||||||
Second Period [Member] | |||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |||||||
Agreement monthly amount | $ 20,500 | ||||||
Tgsnopec Geophysical Company [Member] | |||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |||||||
Payments for exploration costs | $ 6,135,500 | ||||||
Nonspecified Siesmic Company [Member] | |||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |||||||
Payments for exploration costs | $ 3,009,195 | ||||||
Payment due during December 2015 | $ 1,003,065 | $ 1,003,065 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | Feb. 01, 2016 | Dec. 31, 2015 | Aug. 31, 2015 | Jun. 30, 2014 | Jun. 30, 2013 |
President [Member] | |||||
Subsequent Event [Line Items] | |||||
Debt Instrument, Face Amount | $ 245,000 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | ||||
President [Member] | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Debt Instrument, Face Amount | $ 22,000 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | ||||
Chief Executive Officer [Member] | |||||
Subsequent Event [Line Items] | |||||
Debt Instrument, Face Amount | $ 1,250,000 | $ 1,160,000 | $ 6,500,000 | ||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | 5.00% | 5.00% | 5.00% | |
Chief Executive Officer [Member] | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Debt Instrument, Face Amount | $ 66,000 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% |