Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2016 | Dec. 27, 2016 | Mar. 31, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | GULFSLOPE ENERGY, INC. | ||
Entity Central Index Key | 1,341,726 | ||
Document Type | 10-K | ||
Trading Symbol | GSPE | ||
Document Period End Date | Sep. 30, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --09-30 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 682,402,225 | ||
Entity Public Float | $ 16,913,975 | ||
Shares Held by non-affiliates | 422,849,382 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Sep. 30, 2016 | Sep. 30, 2015 |
Current Assets | ||
Cash and Cash Equivalents | $ 64,114 | $ 1,428,014 |
Accounts Receivable, Net | 63,147 | |
Prepaid Expenses and Other Current Assets | 38,311 | 53,883 |
Total Current Assets | 165,572 | 1,481,897 |
Property and Equipment, net of depreciation | 24,288 | 70,515 |
Oil and Natural Gas Properties, Full Cost Method of Accounting, Unproved Properties | 4,526,171 | 5,557,183 |
Other Non-Current Assets | ||
Total Non-Current Assets | 4,550,459 | 5,627,698 |
Total Assets | 4,716,031 | 7,109,595 |
Current Liabilities | ||
Accounts Payable | 426,271 | 178,649 |
Related Party Payable | 265,834 | 263,397 |
Accrued Interest Payable | 812,383 | 384,531 |
Accrued Expenses and Other Payables | 1,352,929 | 1,313,415 |
Loans from Related Parties | 8,382,891 | 7,955,000 |
Note Payable | 4,156 | 4,988 |
Convertible Promissory Notes Payable | 153,358 | |
Stock Payable | 11,605 | |
Total Current Liabilities | 11,409,427 | 10,099,980 |
Total Liabilities | 11,409,427 | 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 as of September 30, 2016 and 2015; issued and outstanding 682,402,225 and 670,391,952, as of September 30, 2016 and 2015, respectively | 682,402 | 670,391 |
Additional Paid-in Capital - Stock To Be Issued | 230,000 | |
Additional Paid-in Capital | 26,151,376 | 24,460,484 |
Accumulated Deficit | (33,527,174) | (28,351,260) |
Total Stockholders' Deficit | (6,693,396) | (2,990,385) |
Total Liabilities and Stockholders' Deficit | $ 4,716,031 | $ 7,109,595 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2016 | Sep. 30, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Common Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 975,000,000 | 975,000,000 |
Common Stock, shares issued | 682,402,225 | 670,391,952 |
Common Stock, shares outstanding | 682,402,225 | 670,391,952 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||
Revenues | ||
Impairment of Oil and Natural Gas Properties | $ 2,890,678 | 93,052 |
General & Administrative Expenses | 1,656,062 | 3,219,454 |
Net Loss from Operations | (4,546,740) | (3,312,506) |
Other Income/(Expenses): | ||
Interest Income | 966 | |
Interest Expense | (629,174) | (349,041) |
Net Loss Before Income Taxes | (5,175,914) | (3,660,581) |
Provision for Income Taxes | 31,002 | |
Net Loss | $ (5,175,914) | $ (3,691,583) |
Loss Per Share - Basic and Diluted (in dollars per share) | $ (0.01) | $ (0.01) |
Weighted Average Shares Outstanding - Basic and Diluted (in shares) | 678,387,357 | 662,771,509 |
STATEMENTS OF STOCKHOLDERS' EQU
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) | Common Stock [Member] | Additional Paid-in Capital - Stock to be Issued [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at beginning at Sep. 30, 2014 | $ 660,672 | $ 22,936,685 | $ (24,659,677) | $ (1,062,320) | |
Balance at beginning (in shares) at Sep. 30, 2014 | 660,672,345 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Common stock issued for services | $ 1,579 | 175,814 | 177,393 | ||
Common stock issued for services (in shares) | 1,579,607 | ||||
Restricted Common stock issued to employees | $ 3,140 | (3,140) | |||
Restricted Common stock issued to employees (in shares) | 3,140,000 | ||||
Amortization of employee stock options and restricted stock | 856,125 | $ 856,125 | |||
Common stock issued to settle debt | |||||
Common stock issued to settle debt (in shares) | |||||
Common stock issued for cash | $ 5,000 | 495,000 | $ 500,000 | ||
Common stock issued for cash (in shares) | 5,000,000 | ||||
Common stock purchased for cash - to be Issued | $ 230,000 | 230,000 | |||
Net loss for the twelve months | (3,691,583) | (3,691,583) | |||
Balance at end at Sep. 30, 2015 | $ 670,391 | 230,000 | 24,460,484 | (28,351,260) | $ (2,990,385) |
Balance at end (in shares) at Sep. 30, 2015 | 670,391,952 | 670,391,952 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Common stock issued for services | $ 521 | 15,087 | $ 15,608 | ||
Common stock issued for services (in shares) | 520,273 | ||||
Common stock issued for cash received in prior period | $ 4,600 | $ (230,000) | 225,400 | ||
Common stock issued for cash received in prior period (in shares) | 4,600,000 | ||||
Common stock issued resulting from anti-dilution provision | $ 5,000 | (5,000) | |||
Common stock issued resulting from anti-dilution provision (in shares) | 5,000,000 | ||||
Restricted Common stock issued to employees | $ 1,890 | (1,890) | |||
Restricted Common stock issued to employees (in shares) | 1,890,000 | ||||
Value of warrants in conjunction with convertible promissory notes | 431,528 | 431,528 | |||
Value of beneficial conversion feature in conjunction with convertible promissory notes | 355,473 | 355,473 | |||
Amortization of employee stock options and restricted stock | 670,294 | 670,294 | |||
Net loss for the twelve months | (5,175,914) | (5,175,914) | |||
Balance at end at Sep. 30, 2016 | $ 682,402 | $ 26,151,376 | $ (33,527,174) | $ (6,693,396) | |
Balance at end (in shares) at Sep. 30, 2016 | 682,402,225 | 682,402,225 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
OPERATING ACTIVITIES | ||
Net Loss | $ (5,175,914) | $ (3,691,583) |
Adjustments to reconcile net loss to net cash From Operating Activities: | ||
Impairment of Oil and Natural Gas Properties | 2,890,678 | 93,052 |
Change in Allowance For Doubtful Accounts Receivable | 128,024 | |
Depreciation | 46,226 | 51,934 |
Stock issued for services | 119,650 | |
Debt Discount Amortization | 196,249 | |
Stock based compensation | 283,098 | 405,773 |
Changes in operating assets and liabilities: | ||
(Increase) Decrease in Accounts Receivable | (191,171) | |
(Increase) Decrease in Prepaid Expenses and other Current Assets | 256,418 | 213,142 |
(Increase) Decrease in Other Assets | ||
Increase (Decrease) in Accounts Payable | 74,455 | 12,720 |
Increase (Decrease) in Related Party Payable | 72,437 | (3,340) |
Increase (Decrease) in Accrued Interest Payable | 427,852 | 343,719 |
Increase (Decrease) in Accrued Liabilities and other Payables | 39,515 | (1,189,651) |
Net Cash Used in Operating Activities | (952,133) | (3,644,584) |
INVESTING ACTIVITIES | ||
Lease Deposits | 150,000 | |
Leases Purchased | (441,494) | (1,148,302) |
Proceeds From Sale of Working Interest | 400,000 | 1,800,000 |
Capitalized Exploration Costs | (1,230,593) | (3,617,142) |
Purchase of Equipment | (14,478) | |
Net Cash Used in Investing Activities | (1,272,087) | (2,829,922) |
FINANCING ACTIVITIES | ||
Restricted cash | 1,500,077 | |
Proceeds from Stock Sale or Issuance | 730,000 | |
Proceeds from Related Party Loans | 487,000 | 1,495,000 |
Payments on Note Payable | (241,680) | (232,859) |
Proceeds from Convertible Promissory Notes and Warrants | 615,000 | |
Net Cash Provided by Financing Activities: | 860,320 | 3,492,218 |
Net Increase (Decrease) in cash | (1,363,900) | (2,982,288) |
Beginning Cash Balance | 1,428,014 | 4,410,302 |
Ending Cash Balance | 64,114 | 1,428,014 |
Supplemental Schedule of Cash Flow Activities | ||
Cash paid for income taxes | ||
Cash paid for interest | 5,073 | 5,322 |
Common stock issued for services | 119,650 | |
Prepaid asset financed through notes payable | 240,848 | 233,421 |
Related party payable settled through issuance of Bridge Financing Notes | 70,000 | |
Non-cash Investing and Financing Activities | ||
Purchase of Developmental Capital Expenditures Through Issuance of Common Stock | 15,608 | 57,743 |
Purchase of Developmental Capital Expenditures Included in Accounts Payable | 184,772 | 120,720 |
Purchase of Developmental Capital Expenditures Through Stock Based Compensation to Employees | $ 387,197 | $ 450,351 |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Organization GulfSlope Energy, Inc. (the “Company”, “GulfSlope”, “us”, “we”, or “our”), is an independent oil and natural gas exploration company whose interests are concentrated in the United States Gulf of Mexico federal waters offshore Louisiana. The Company has leased 17 federal Outer Continental Shelf blocks (referred to as “prospect,” “portfolio” or “leases”) and licensed three-dimensional (3-D) seismic data in its area of concentration. (b) Basis of Presentation The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and the instructions to Form 10-K and Regulation S-X published by the US Securities and Exchange Commission (the “SEC”). The accompanying financial statements include the accounts of the Company. (c) Cash and Cash Equivalents The Company 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 Company’s cash positions represent assets held in a checking account. These assets are generally available on a daily or weekly basis and are highly liquid in nature. (d) Restricted Cash At September 30, 2016 and 2015 the Company has no restricted cash. (e) Accounts Receivable The Company records an accounts receivable for lease rental reimbursements due from joint interest lease holders. 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, it is immediately written off. An allowance for bad debts has been provided based on estimated losses amounting to $128,024 as of September 30, 2016. (f) Full Cost Method The Company uses the full cost method of accounting for its oil and gas exploration and development activities as defined by the Securities and Exchange Commission (“SEC”). 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 and overhead charges directly related to acquisition, exploration and development activities. 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. Proved properties are amortized on a country-by-country basis using the units of production method (UOP). The UOP calculation multiplies the percentage of estimated proved reserves produced each quarter by the cost of those 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 considering, 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 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. As of September 30, 2016, the Company’s oil and gas properties consisted of unproved properties and no proved reserves. (g) Capitalized Interest Interest is capitalized on the cost of unevaluated oil and gas properties that are excluded from amortization and actively being evaluated, if any. (h) Property and Equipment Property and equipment are carried at cost and include expenditures for new equipment and those expenditures that substantially increase the productive lives of existing equipment and leasehold improvements. Maintenance and repair costs are expensed as incurred. Property and equipment are depreciated on a straight-line basis over the assets’ estimated useful lives. Fully depreciated property and equipment still in use are not eliminated from the accounts. The Company assesses the carrying value of its property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing estimated undiscounted cash flows, expected to be generated from such assets, to their net book value. If net book value exceeds estimated cash flows, the asset is written down to its fair value, determined by the estimated discounted cash flows from such asset. When an asset is retired or sold, its cost and related accumulated depreciation and amortization are removed from the accounts. The difference between the net book value of the asset and proceeds on disposition is recorded as a gain or loss in our statements of operations in the period in which they occur. (i) Income Taxes The Company applies the provisions of FASB Accounting Standard Codification (ASC) 740 Income Taxes. This standard requires an asset and liability approach for financial accounting and reporting for income taxes, and the recognition of deferred tax assets and liabilities for the temporary differences between the financial reporting basis and tax basis of the Company’s assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. A valuation allowance is provided if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company’s policy is to recognize potential interest and penalties accrued related to unrecognized tax benefits as a component of income tax expense (benefit). (j) Stock-Based Compensation The Company records expenses associated with the fair value of stock-based compensation. For fully vested and restricted stock grants, the Company calculates the stock based compensation expense based upon estimated fair value on the date of grant. For stock warrants and options, the Company uses the Black-Scholes option valuation model to calculate stock based compensation at the date of grant. Option pricing models require the input of highly subjective assumptions, including the expected price volatility. Changes in these assumptions can materially affect the fair value estimate. (k) Stock Issuance The Company records the stock-based compensation awards issued to non-employees and other external entities for goods and services at either the fair market value of the goods received or services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in FASB ASC 505-50-30. (l) Earnings per Share – Basic and Diluted Basic earnings per share (EPS) is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. 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 years ended September 30, 2016 and 2015, the potentially dilutive shares are anti-dilutive and thus not added into the EPS calculations. As of September 30, 2016 and 2015, there were 109,893,291 and 51,824,819 potentially dilutive shares, respectively. (m) Statement of Cash Flows For purposes of the Statements of Cash Flows, the Company considers cash on deposit in the bank to be cash. The Company had unrestricted cash of $64,114 as of September 30, 2016. The Company had $1,428,014 unrestricted cash as of September 30, 2015. (n) 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. (o) Impact of New Accounting Standards 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. As amended, the new standard is effective for annual reporting periods beginning after December 15, 2017. 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 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) On February 25, 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In March 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”) In March 2016, the FASB issued ASU No. 2016-06, Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments (a consensus of the Emerging Issues Task Force) The Company has evaluated all other recent accounting pronouncements and believes that none of them will have a significant effect on the Company’s financial statements. |
LIQUIDITY_GOING CONCERN
LIQUIDITY/GOING CONCERN | 12 Months Ended |
Sep. 30, 2016 | |
Liquiditygoing Concern | |
LIQUIDITY/GOING CONCERN | NOTE 2 - LIQUIDITY/GOING CONCERN The Company has incurred accumulated losses as of September 30, 2016 of $33,527,174 ,and has a net capital deficiency. Further losses are anticipated in developing our business. As a result, the Company’s auditors have expressed substantial doubt about the Company’s ability to continue as a going concern. As of September 30, 2016, the Company had $64,114 of unrestricted cash on hand. The Company estimates that it will need to raise a minimum of $4 million to meet its obligations and planned expenditures through December 2017. The Company also plans to extend the agreements associated with loans from related parties, the accrued interest payable on these loans, as well as the Company’s accrued liabilities. The Company plans to finance the Company through equity and/or debt financings and/or farm-out agreements. 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. |
OIL AND NATURAL GAS PROPERTIES
OIL AND NATURAL GAS PROPERTIES | 12 Months Ended |
Sep. 30, 2016 | |
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | |
OIL AND NATURAL GAS PROPERTIES | NOTE 3 – OIL AND NATURAL GAS PROPERTIES In March 2014, the Company was awarded 21 blocks in the Central Gulf of Mexico Lease Sale 231, conducted by the Bureau of Ocean Energy Management (“BOEM”). In March 2015, the Company was awarded two blocks in the Central Gulf of Mexico Lease Sale 235. During the quarter ended June 30, 2016, the Company relinquished six of the lease blocks acquired in 2014. The relinquished leases are Ewing Bank 904 and 945, Garden Banks 173, Eugene Island 395, Vermilion 393 and South Marsh Island 187. The capitalized lease costs of $2,610,678 associated with these blocks were deducted as impairment of oil and natural gas properties. The Company also deducted $280,000 as an impairment of certain capitalized exploration costs that were directly allocable to the relinquished blocks, for a total impairment deduction of $2,890,678. In March 2014, the Company entered into a farm-out letter agreement with Texas South relating to five prospects located within the blocks the Company bid on at the Central Gulf of Mexico Lease Sale 231. Under the terms of the farm-out letter agreement, Texas South acquired a 20% working interest in these five prospects for $10 million. In accordance with full cost requirements, the Company recorded the proceeds from the transaction as an adjustment to capitalized costs with no gain recognition. 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 May 2016, the Company entered into a letter of intent (the “LOI”) with Texas South that sets out the terms and conditions of a proposed farm-out arrangement (the “Farm-out”) to develop two shallow-depth oil and gas prospects located on offshore Gulf of Mexico blocks currently leased by the Company. Through September 30, 2016 the Company received $400,000 under the terms of the LOI. In accordance with full cost requirements, the Company recorded the proceeds from the transaction as an adjustment to the capitalized costs of its oil & gas properties with no gain or loss recognition. The Company paid $632,665 and $807,755 in gross annual lease rental payments to the BOEM for the year ended September 30, 2016 and 2015, respectively. The Company’s share of these amounts are included in unproved properties. 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. These remaining capitalized amounts when added to the amount paid for our 2014 and 2015 lease bonus and lease rental payments of $9,275,274 and netted with the 2014 and 2015 receipts from sale of a working interest of $10,000,000 results in unproved oil and gas properties of $5,557,183, reflected on our balance sheet at September 30, 2015. During the period October 1, 2015 to September 30, 2016, the Company incurred $1,354,674 in consulting fees and salaries and benefits associated with full-time geoscientists, and $463,497 associated with technological infrastructure, third party hosting services and seismic data. The Company capitalized these G&G costs because the Company owned specific unevaluated properties that these costs relate to. At June 30, 2016, a portion of these costs, $280,000, specifically related to leases relinquished in June 2016 were immediately impaired. These remaining capitalized amounts when added to the amount paid in 2016 for lease rental payments of $632,665 and netted with the 2016 receipts from sale of a working interest of $400,000 as well as the relinquished leases impairment amount of $2,610,678 subtracting lease rentals receivable of $191,171 results in unproved oil and gas properties of $4,526,171, reflected on our balance sheet at September 30, 2016. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 4 – PROPERTY AND EQUIPMENT Property and equipment consist of the following as of September 30, 2016 and 2015: 2016 2015 Office equipment and computers $ 143,897 $ 143,897 Furniture and fixtures 16,280 16,280 Leasehold improvements 4,053 4,054 Total 164,230 164,231 Less: accumulated depreciation (139,942 ) (93,716 ) Net property and equipment $ 24,288 $ 70,515 Depreciation is computed on a straight-line basis over the estimated useful lives of the assets, which were as follows: Life Office equipment and computers 3 years Furniture and fixtures 5 years Leasehold improvements Shorter of 5 years or related lease term Depreciation expense was $46,226 and $51,934 for the years ended September 30, 2016 and 2015, respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 5 - INCOME TAXES The provision for income taxes consists of the following as of September 30, 2016 and 2015: 9/30/2016 9/30/2015 FEDERAL Current $ — $ — Deferred — — STATE Current — 31,002 Deferred — — TOTAL PROVISION $ — $ 31,002 Deferred income tax assets and liabilities at September 30, 2016 and 2015 consist of the following temporary differences: 9/30/2016 9/30/2015 DEFERRED TAX ASSETS Current $ — $ — Noncurrent Net operating losses 3,965,535 3,095,457 Exploration costs (809,244 ) (282,550 ) Gain recognized on sale of working interest 1,414,901 1,404,763 Stock based compensation 74,709 33,414 Accrued interest and expenses not paid 320,147 — Allowance for doubtful receivable 19,204 Differences in book/tax depreciation 5,362 — Total noncurrent 4,990,614 $ 4,251,084 Valuation Allowance (4,990,614 ) (4,251,084 ) NET DEFERRED TAX ASSET — — DEFERRED TAX LIABILITIES — — NET DEFERRED TAXES $ — $ — The Company’s valuation allowance has increased $740,576 during the year ended September 30, 2016 and $552,168 during the year ended September 30, 2015. The following is a summary of federal net operating loss carryforwards and their expiration dates: Amount Expiration $ 3,203 9/30/2024 7,695 9/30/2025 18,447 9/30/2026 16,876 9/30/2027 17,986 9/30/2028 8,596 9/30/2029 7,713 9/30/2030 64,097 9/30/2031 513,914 9/30/2032 7,155,229 9/30/2033 11,567,666 9/30/2034 1,203,016 9/30/2035 5,852,461 9/30/2036 $ 26,436,899 Total The actual income tax provision for continuing operations is as follows as of September 30, 2016 and 2015, respectively: 9/30/2016 9/30/2015 Expected provision (based on statutory rate) $ (776,387 ) $ (553,737 ) Effect of: Increase (decrease) in valuation allowance 740,576 552,168 State minimum tax, net of federal benefit — 31,002 Non-deductible expense 29,555 1,081 Net operating loss adjustment — — Rate Change — — Other, net 6,256 488 Total actual provision $ — $ 31,002 The Company has not made any adjustments to deferred tax assets or liabilities. The Company did not identify any material uncertain tax positions of the Company on returns that have been filed or that will be filed. The Company has not had operations and is carrying a large Net Operating Loss as disclosed above. Since this Net Operating Loss will not produce a tax benefit for several years, even if examined by taxing authorities and disallowed entirely, there would be no effect on the financial statements. The Company’s policy is to recognize potential interest and penalties accrued related to unrecognized tax benefits as a component of income tax expense (benefit). For the years ended September 30, 2016 and 2015, the Company did not recognize any interest or penalties, nor did we have any interest or penalties accrued as of September 30, 2016 and 2015 relating to unrecognized benefits. The tax years ended September 30, 2013 through 2016 are open for examination for federal income tax purposes and by other major taxing jurisdictions to which we are subject. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 6 - 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. During the fiscal year ended September 2016, the Company executed promissory notes totaling $363,000 with Mr. Seitz. These notes are due on demand, bear 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. As of September 30, 2016 the total amount owed to John Seitz, our CEO, is $8,073,000. There was a total of $782,154 and $383,068 of unpaid interest associated with these loans included in accrued interest within our balance sheet as of September 30, 2016 and 2015, respectively. In August 2015, the Company entered into 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. These notes are not convertible, due on demand and bear interest at the rate of 5% per annum. During February 2016, the Company entered into a promissory note for $22,000 with Dr. Bain. This 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. As of September 30, 2016, the total amount of demand notes owed to Dr. Bain and his affiliate was $267,000. There was a total of $14,635 and $1,463 of accrued interest associated with these loans included within our balance sheet as of September 30, 2016 and 2015, respectively. Dr. Ronald Bain also entered into a $92,000 convertible promissory note with associated warrants (“Bridge Financing”) under the same terms received by other investors (see Note 7). During March 2016, the Company entered into a promissory note for a total of $80,000 with the Morris Family Partnership, L.P., an affiliate of Mr. Paul Morris, a director of the Company. The note is due on demand and 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 $80,000 promissory note was converted into the Bridge Financing (see Note 7). Domenica Seitz CPA, related to John Seitz, has provided accounting consulting services to the Company. During the twelve month periods ended September 30, 2016 and 2015, the services provided were valued at $59,510 based on market-competitive salaries, time devoted and professional rates. The Company has accrued this amount, and it has been reflected in the September 30, 2016 financial statements. John Seitz has not received a salary since May 31, 2013, the date he commenced serving as our CEO and accordingly, no amount has been accrued on our financial statements. Kevin Bain, son of Dr. Bain, is a geoscientist, employee of the Company. All employees of the Company (including executive management), who are all shareholders of the Company have been paid a reduced salary plus benefits beginning on January 1, 2016. |
BRIDGE FINANCING - CONVERTIBLE
BRIDGE FINANCING - CONVERTIBLE PROMISSORY NOTES WITH ASSOCIATED WARRANTS | 12 Months Ended |
Sep. 30, 2016 | |
Bridge Financing - Convertible Promissory Notes With Associated Warrants | |
BRIDGE FINANCING - CONVERTIBLE PROMISSORY NOTES WITH ASSOCIATED WARRANTS | NOTE 7 – BRIDGE FINANCING – CONVERTIBLE PROMISSORY NOTES WITH ASSOCIATED WARRANTS On June 10, 2016, the Company issued eight convertible promissory notes with associated warrants in a private placement to accredited investors for total gross proceeds of $387,000. Two of the notes were to related parties for proceeds totaling $172,000, including the extinguishment of $70,000 worth of related party payables. The convertible notes have a maturity of one year, bear an annual interest rate of 8% and can be converted at the option of the holder at a conversion price of $0.025 per share. In addition, the convertible notes will automatically convert if a qualified equity financing of at least $3 million occurs before maturity and such mandatory conversion price will equal the effective price per share paid in the qualified equity financing. In addition to the convertible notes, the investors received 12.9 million warrants (5.7 million to the above mentioned related parties) with an exercise price of $0.03 and a term of the earlier of three years or upon a change of control. The Company evaluated the various financial instruments under ASC 480 and ASC 815 and determined no instruments or features required fair value accounting. Therefore, in accordance with ASC 470-20-25-2, the Company allocated the proceeds between the convertible notes and warrants based on their relative fair values. This resulted in an allocation of $231,239 to the warrants and $155,761 to the convertible notes. After such allocation, the Company evaluated the conversion option to discern whether a beneficial conversion feature existed based upon comparing the effective exercise price of the convertible notes to the fair value of the shares it is convertible into. The Company concluded a beneficial conversion feature existed and measured such beneficial conversion feature at $155,761. Accordingly, at June 10, 2016, the debt discount associated with these notes was $387,000. Such discount will be amortized using the effective interest rate method over the term (one year) of the convertible notes. For the year ended September 30, 2016 amortization of this discount totaled $119,811 and is included in interest expense in the statement of operations. In July and August 2016 the Company issued two convertible promissory notes with associated warrants in a private placement to accredited investors for total gross proceeds of $400,000. The convertible notes have a maturity of one year, bear an annual interest rate of 8% and can be converted at the option of the holder at a conversion price of $0.025 per share. In addition, the convertible notes will automatically convert if a qualified equity financing of at least $3 million occurs before maturity and such mandatory conversion price will equal the effective price per share paid in the qualified equity financing. In addition to the convertible notes, the investors received 13.3 million warrants with an exercise price of $0.03 and a term of the earlier of three years or upon a change of control. The Company evaluated the various financial instruments under ASC 480 and ASC 815 and determined no instruments or features required fair value accounting. Therefore, in accordance with ASC 470-20-25-2, the Company allocated the proceeds between the convertible notes and warrants based on their relative fair values. This resulted in an allocation of $200,288 to the warrants and $199,712 to the convertible notes. After such allocation, the Company evaluated the conversion option to discern whether a beneficial conversion feature existed based upon comparing the effective exercise price of the convertible notes to the fair value of the shares it is convertible into. The Company concluded a beneficial conversion feature existed and measured such beneficial conversion feature at $199,712. Accordingly, the debt discount associated with these notes was $400,000. Such discount will be amortized using the effective interest rate method over the term (one year) of the convertible notes. For the year ended September 30, 2016 amortization of this discount totaled $76,438 and is included in interest expense in the statement of operations. |
COMMON STOCK_PAID IN CAPITAL
COMMON STOCK/PAID IN CAPITAL | 12 Months Ended |
Sep. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
COMMON STOCK/PAID IN CAPITAL | NOTE 8 - COMMON STOCK/PAID IN CAPITAL In March 2014, the Company issued an aggregate of 1,500,000 shares of restricted stock to an employee and two non-employee directors. The restricted stock is subject to vesting pursuant to which one-half vested in March 2015 and the remaining one-half vested in March 2016. In May 2014, the Company awarded 550,000 shares of restricted stock to an employee, one-half of which vested in May 2015 and the remaining half vested in May 2016. In July 2014, John H. Malanga, chief financial officer and chief accounting officer, was awarded an inducement grant of 2,500,000 shares of restricted stock, with a fair value on the date of the award of $600,000, one-half of which vested in July 2015 and the remaining half vested in July 2016. In August 2014, an employee was awarded an inducement grant of 200,000 shares of restricted stock one-half of which vested in August 2015 and the remaining half vested in August 2016. In September 2014, the Company awarded 3,030,000 shares of restricted stock to six employees, one-half of which vested in September 2015 and the remaining half vested in September 2016. On April 17, 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 has anti-dilution protection that will adjust the price per share in the event that the Company closes on a common stock financing at an effective price of less than $0.10 per share. This anti-dilution provision was in effect through December 31, 2015. As a result of the anti-dilution provision, 5,000,000 additional shares were owed to the two accredited investors as of September 30, 2015. These shares were issued 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. In March 2016, the Company issued 520,273 shares of common stock to one vendor as consideration for services rendered in the ordinary course of business. As discussed in Note 7, during the three months ended June 30, 2016, the Company issued 12.9 million warrants in conjunction with convertible notes payable (Bridge Financing Notes). The warrants have an exercise price of $0.03 and a term of the earlier of 3 years or upon a change of control. Based upon the allocation of proceeds between the convertible notes payable and the warrants, approximately $231,239 was allocated to the warrants. The fair value of the warrants were determined using the Black Scholes valuation model with the following key assumptions: June 2016 Warrants Stock Price: $ 0.054 (1) Exercise Price $ 0.03 Term 3 years Risk Free Rate .87 % Volatility 135 % (1) Fair market value on the date of agreement As discussed in Note 7, during the three months ended September 30, 2016, the Company issued 13.3 million warrants in conjunction with convertible notes payable (Bridge Financing Notes). The warrants have an exercise price of $0.03 and a term of the earlier of 3 years or upon a change of control. Based upon the allocation of proceeds between the convertible notes payable and the warrants, approximately $200,288 was allocated to the warrants. The fair value of the warrants were determined using the Black Scholes valuation model with the following key assumptions: July 2016 Warrants August 2016 Warrants Stock Price: $ 0.040 (1) $ 0.032 (1) Exercise Price $ 0.03 $ 0.03 Term 3 years 3 years Risk Free Rate .80 % .88 % Volatility 138 % 137 % (1) Fair market value on the date of agreement A summary of Bridge Financing Note warrants outstanding as of September 30, 2016: Warrants Outstanding Warrants Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (Yrs) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.03 12,900,000 2.7 $ 0.03 12,900,000 $ 0.03 $ 0.03 10,000,000 2.8 $ 0.03 10,000,000 $ 0.03 $ 0.03 3,333,333 2.9 $ 0.03 3,333,333 $ 0.03 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 9 – 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 $670,294 and $856,125 in stock-based compensation expense for the years ended September 30, 2016 and 2015, respectively. A portion of these costs allocable to the Company’s exploration activities, $387,196 and $450,351 were capitalized to unproved properties and the remainder was recorded as general and administrative expenses, for the years ended September 30, 2016 and 2015, respectively. The following table summarizes the Company’s stock option activity during the year ended September 30, 2016: Number Weighted Average Weighted Average Remaining Contractual Term (In years) Average Outstanding at beginning of period 2,000,000 $ 0.12 Granted — — Exercised — — — Cancelled — — — Outstanding at end of period 2,000,000 $ 0.12 2.80 $ — Vested and expected to vest 2,000,000 $ 0.12 2.80 $ — Exercisable at end of period — — — — The Company uses the Black-Scholes option-pricing model to estimate the fair value of options granted. The weighted-average fair values of stock options granted for the year ended September 30, 2014 were based on the following assumptions at the date of grant as follows: Expected dividend yield 0 % Expected stock price volatility 79.02 % Risk-free interest rate 1.53 % Expected life of options 5.75 years Weighted-average grant date fair value $ 0.08 The Company used a variety of comparable and peer companies to determine the expected volatility. The Company has no historical data regarding the expected life of the options and therefore used the simplified method of calculating the expected life. The risk free rate was calculated using the U.S. Treasury constant maturity rates similar to the expected life of the options, as published by the Federal Reserve. The Company has no plans to declare any future dividends. As of September 30, 2016 there was no unrecognized stock-based compensation cost related to the stock option grant and no unrecognized stock-based compensation cost related to the restricted stock grants. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 10– COMMITMENTS AND CONTINGENCIES From time to time, the Company may become involved in litigation relating to claims arising out of its operations in the normal course of business. No legal proceedings, government actions, administrative actions, investigations or claims are currently pending against us or involve the Company. In March 2013, the Company licensed certain seismic data pursuant to an agreement and as of September 30, 2016, the Company has paid $3,009,195 in cash and is obligated to pay $1,003,065 during 2017. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 11 – SUBSEQUENT EVENTS In October 2016, the Company purchased an insurance policy for $170,850 and financed $155,010 of the premium by executing a note payable. In November 2016, the Company sold an additional $50,000 convertible promissory note pursuant to the Bridge Financing Agreements described in Note 7. This amount when added to the Bridge Financing Note balance at September 30, 2016 results in a total of $837,000 Bridge Notes through the filing date of this report. The company entered into a promissory note with Mr. John Seitz whereby it borrowed a total of $78,000 in December 2016. The note is due on demand, not convertible and bears interest at the rate of 5% per annum |
ORGANIZATION AND SUMMARY OF S18
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | (a) Organization GulfSlope Energy, Inc. (the “Company”, “GulfSlope”, “us”, “we”, or “our”), is an independent oil and natural gas exploration company whose interests are concentrated in the United States Gulf of Mexico federal waters offshore Louisiana. The Company has leased 17 federal Outer Continental Shelf blocks (referred to as “prospect,” “portfolio” or “leases”) and licensed three-dimensional (3-D) seismic data in its area of concentration. |
Basis of Presentation | (b) Basis of Presentation The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and the instructions to Form 10-K and Regulation S-X published by the US Securities and Exchange Commission (the “SEC”). The accompanying financial statements include the accounts of the Company. |
Cash and Cash Equivalents | (c) Cash and Cash Equivalents The Company 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 Company’s cash positions represent assets held in a checking account. These assets are generally available on a daily or weekly basis and are highly liquid in nature. |
Restricted Cash | (d) Restricted Cash At September 30, 2016 and 2015 the Company has no restricted cash. |
Accounts Receivable | (e) Accounts Receivable The Company records an accounts receivable for lease rental reimbursements due from joint interest lease holders. 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, it is immediately written off. An allowance for bad debts has been provided based on estimated losses amounting to $128,024 as of September 30, 2016. |
Full Cost Method | (f) Full Cost Method The Company uses the full cost method of accounting for its oil and gas exploration and development activities as defined by the Securities and Exchange Commission (“SEC”). 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 and overhead charges directly related to acquisition, exploration and development activities. 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. Proved properties are amortized on a country-by-country basis using the units of production method (UOP). The UOP calculation multiplies the percentage of estimated proved reserves produced each quarter by the cost of those 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 considering, 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 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. As of September 30, 2016, the Company’s oil and gas properties consisted of unproved properties and no proved reserves. |
Capitalized Interest | (g) Capitalized Interest Interest is capitalized on the cost of unevaluated oil and gas properties that are excluded from amortization and actively being evaluated, if any. |
Property and Equipment | (h) Property and Equipment Property and equipment are carried at cost and include expenditures for new equipment and those expenditures that substantially increase the productive lives of existing equipment and leasehold improvements. Maintenance and repair costs are expensed as incurred. Property and equipment are depreciated on a straight-line basis over the assets’ estimated useful lives. Fully depreciated property and equipment still in use are not eliminated from the accounts. The Company assesses the carrying value of its property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing estimated undiscounted cash flows, expected to be generated from such assets, to their net book value. If net book value exceeds estimated cash flows, the asset is written down to its fair value, determined by the estimated discounted cash flows from such asset. When an asset is retired or sold, its cost and related accumulated depreciation and amortization are removed from the accounts. The difference between the net book value of the asset and proceeds on disposition is recorded as a gain or loss in our statements of operations in the period in which they occur. |
Income Taxes | (i) Income Taxes The Company applies the provisions of FASB Accounting Standard Codification (ASC) 740 Income Taxes. This standard requires an asset and liability approach for financial accounting and reporting for income taxes, and the recognition of deferred tax assets and liabilities for the temporary differences between the financial reporting basis and tax basis of the Company’s assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. A valuation allowance is provided if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company’s policy is to recognize potential interest and penalties accrued related to unrecognized tax benefits as a component of income tax expense (benefit). |
Stock-Based Compensation | (j) Stock-Based Compensation The Company records expenses associated with the fair value of stock-based compensation. For fully vested and restricted stock grants, the Company calculates the stock based compensation expense based upon estimated fair value on the date of grant. For stock warrants and options, the Company uses the Black-Scholes option valuation model to calculate stock based compensation at the date of grant. Option pricing models require the input of highly subjective assumptions, including the expected price volatility. Changes in these assumptions can materially affect the fair value estimate. |
Stock Issuance | (k) Stock Issuance The Company records the stock-based compensation awards issued to non-employees and other external entities for goods and services at either the fair market value of the goods received or services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in FASB ASC 505-50-30. |
Earnings per Share - Basic and Dilutive | (l) Earnings per Share – Basic and Diluted Basic earnings per share (EPS) is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. 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 years ended September 30, 2016 and 2015, the potentially dilutive shares are anti-dilutive and thus not added into the EPS calculations. As of September 30, 2016 and 2015, there were 109,893,291 and 51,824,819 potentially dilutive shares, respectively. |
Statement of Cash Flows | (m) Statement of Cash Flows For purposes of the Statements of Cash Flows, the Company considers cash on deposit in the bank to be cash. The Company had unrestricted cash of $64,114 as of September 30, 2016. The Company had $1,428,014 unrestricted cash as of September 30, 2015. |
Use of Estimates | (n) 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 |
Impact of New Accounting Standards | (o) Impact of New Accounting Standards 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. As amended, the new standard is effective for annual reporting periods beginning after December 15, 2017. 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 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) On February 25, 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In March 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”) In March 2016, the FASB issued ASU No. 2016-06, Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments (a consensus of the Emerging Issues Task Force) The Company has evaluated all other recent accounting pronouncements and believes that none of them will have a significant effect on the Company’s financial statements. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consist of the following as of September 30, 2016 and 2015: 2016 2015 Office equipment and computers $ 143,897 $ 143,897 Furniture and fixtures 16,280 16,280 Leasehold improvements 4,053 4,054 Total 164,230 164,231 Less: accumulated depreciation (139,942 ) (93,716 ) Net property and equipment $ 24,288 $ 70,515 |
Schedule of Estimated Useful Lives of Assets | Depreciation is computed on a straight-line basis over the estimated useful lives of the assets, which were as follows: Life Office equipment and computers 3 years Furniture and fixtures 5 years Leasehold improvements Shorter of 5 years or related lease term |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Provision | The provision for income taxes consists of the following as of September 30, 2016 and 2015: 9/30/2016 9/30/2015 FEDERAL Current $ — $ — Deferred — — STATE Current — 31,002 Deferred — — TOTAL PROVISION $ — $ 31,002 |
Schedule of Deferred Income Tax Assets and Liabilities | Deferred income tax assets and liabilities at September 30, 2016 and 2015 consist of the following temporary differences: 9/30/2016 9/30/2015 DEFERRED TAX ASSETS Current $ — $ — Noncurrent Net operating losses 3,965,535 3,095,457 Exploration costs (809,244 ) (282,550 ) Gain recognized on sale of working interest 1,414,901 1,404,763 Stock based compensation 74,709 33,414 Accrued interest and expenses not paid 320,147 — Allowance for doubtful receivable 19,204 Differences in book/tax depreciation 5,362 — Total noncurrent 4,990,614 $ 4,251,084 Valuation Allowance (4,990,614 ) (4,251,084 ) NET DEFERRED TAX ASSET — — DEFERRED TAX LIABILITIES — — NET DEFERRED TAXES $ — $ — |
Summary of Federal Net Operating Loss Carryforwards | The following is a summary of federal net operating loss carryforwards and their expiration dates: Amount Expiration $ 3,203 9/30/2024 7,695 9/30/2025 18,447 9/30/2026 16,876 9/30/2027 17,986 9/30/2028 8,596 9/30/2029 7,713 9/30/2030 64,097 9/30/2031 513,914 9/30/2032 7,155,229 9/30/2033 11,567,666 9/30/2034 1,203,016 9/30/2035 5,852,461 9/30/2036 $ 26,436,899 Total |
Schedule of Effective Income Tax Rate Reconciliation | The actual income tax provision for continuing operations is as follows as of September 30, 2016 and 2015, respectively: 9/30/2016 9/30/2015 Expected provision (based on statutory rate) $ (776,387 ) $ (553,737 ) Effect of: Increase (decrease) in valuation allowance 740,576 552,168 State minimum tax, net of federal benefit — 31,002 Non-deductible expense 29,555 1,081 Net operating loss adjustment — — Rate Change — — Other, net 6,256 488 Total actual provision $ — $ 31,002 |
COMMON STOCK_PAID IN CAPITAL (T
COMMON STOCK/PAID IN CAPITAL (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Fair Value Assumptions for Warrants | The fair value of the warrants were determined using the Black Scholes valuation model with the following key assumptions: June 2016 Warrants Stock Price: $ 0.054 (1) Exercise Price $ 0.03 Term 3 years Risk Free Rate .87 % Volatility 135 % (1) Fair market value on the date of agreement The fair value of the warrants were determined using the Black Scholes valuation model with the following key assumptions: July 2016 Warrants August 2016 Warrants Stock Price: $ 0.040 (1) $ 0.032 (1) Exercise Price $ 0.03 $ 0.03 Term 3 years 3 years Risk Free Rate .80 % .88 % Volatility 138 % 137 % (1) Fair market value on the date of agreement |
Schedule of bridge financing note warrants | A summary of Bridge Financing Note warrants outstanding as of September 30, 2016: Warrants Outstanding Warrants Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (Yrs) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.03 12,900,000 2.7 $ 0.03 12,900,000 $ 0.03 $ 0.03 10,000,000 2.8 $ 0.03 10,000,000 $ 0.03 $ 0.03 3,333,333 2.9 $ 0.03 3,333,333 $ 0.03 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock Options Activity | The following table summarizes the Company’s stock option activity during the year ended September 30, 2016: Number Weighted Average Weighted Average Remaining Contractual Term (In years) Average Outstanding at beginning of period 2,000,000 $ 0.12 Granted — — Exercised — — — Cancelled — — — Outstanding at end of period 2,000,000 $ 0.12 2.80 $ — Vested and expected to vest 2,000,000 $ 0.12 2.80 $ — Exercisable at end of period — — — — |
Schedule of Fair Value Assumptions | The Company uses the Black-Scholes option-pricing model to estimate the fair value of options granted. The weighted-average fair values of stock options granted for the year ended September 30, 2014 were based on the following assumptions at the date of grant as follows: Expected dividend yield 0 % Expected stock price volatility 79.02 % Risk-free interest rate 1.53 % Expected life of options 5.75 years Weighted-average grant date fair value $ 0.08 |
ORGANIZATION AND SUMMARY OF S23
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 12 Months Ended | ||
Sep. 30, 2016USD ($)Itemshares | Sep. 30, 2015USD ($)shares | Sep. 30, 2014USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of leased federal outer continental shelf blocks | Item | 17 | ||
Allowance for bad debts | $ 128,024 | ||
Shares excluded from the computation of diluted loss per share | shares | 109,893,291 | 51,824,819 | |
Unrestricted cash | $ 64,114 | $ 1,428,014 | $ 4,410,302 |
LIQUIDITY_GOING CONCERN (Detail
LIQUIDITY/GOING CONCERN (Details Narrative) - USD ($) | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Liquiditygoing Concern | |||
Accumulated losses | $ 33,527,174 | $ 28,351,260 | |
Cash | 64,114 | $ 1,428,014 | $ 4,410,302 |
Minimum capital which company estimated to raise to meet its obligations and planned expenditures | $ 4,000,000 |
OIL AND GAS PROPERTIES (Details
OIL AND GAS PROPERTIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |
Jun. 30, 2016 | Mar. 31, 2015 | Jun. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | |
Deferred Costs, Capitalized, Prepaid And Other Assets [Line Items] | |||||
Impairment of Oil and Natural Gas Properties | $ 93,052 | $ 2,610,678 | $ 2,890,678 | $ 93,052 | |
Impairment of capitalized exploration costs | 280,000 | ||||
Paid for lease | 9,275,274 | 632,665 | |||
Unproved oil and gas properties | 5,557,183 | 4,526,171 | 5,557,183 | ||
Proceeds from Sale of Working Interest | $ 10,000,000 | 400,000 | 400,000 | 1,800,000 | |
Decrease in lease rentals receivable | $ 191,171 | $ (191,171) | |||
Farm Out Letter Agreement Texas South [Member] | |||||
Deferred Costs, Capitalized, Prepaid And Other Assets [Line Items] | |||||
Ownership percentage by texas south | 20.00% | ||||
Proceeds to be received under farm out agreement | $ 10,000,000 | ||||
Unproved oil and gas properties | 4,526,171 | ||||
Technological Infrastructure And Third Party Hosting Services [Member] | |||||
Deferred Costs, Capitalized, Prepaid And Other Assets [Line Items] | |||||
Exploration costs capitalized during the period | 463,497 | 921,124 | |||
Consulting Fees And Salaries And Benefits [Member] | |||||
Deferred Costs, Capitalized, Prepaid And Other Assets [Line Items] | |||||
Exploration costs capitalized during the period | 1,354,674 | 3,231,780 | |||
Bureau Of Ocean Energy Management [Member] | |||||
Deferred Costs, Capitalized, Prepaid And Other Assets [Line Items] | |||||
Impairment of Oil and Natural Gas Properties | $ 2,610,678 | ||||
Impairment of capitalized exploration costs | $ 280,000 | ||||
Paid for lease | $ 632,665 | $ 807,755 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 46,226 | $ 51,934 |
PROPERTY AND EQUIPMENT (Detai27
PROPERTY AND EQUIPMENT (Details) - USD ($) | Sep. 30, 2016 | Sep. 30, 2015 |
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | $ 164,230 | $ 164,231 |
Less: accumulated depreciation | (139,942) | (93,716) |
Net property and equipment | 24,288 | 70,515 |
Office Equipment And Computers [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 143,897 | 143,897 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 16,280 | 16,280 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | $ 4,053 | $ 4,054 |
PROPERTY AND EQUIPMENT (Detai28
PROPERTY AND EQUIPMENT (Details 1) - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation | $ 46,226 | $ 51,934 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 5 years | |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 5 years | |
Office Equipment And Computers [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 3 years |
INCOME TAXES (Details)
INCOME TAXES (Details) | 12 Months Ended |
Sep. 30, 2015USD ($) | |
STATE | |
Current | $ 31,002 |
TOTAL PROVISION | $ 31,002 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Noncurrent | ||
Net operating losses | $ 3,965,535 | $ 3,095,457 |
Exploration costs | (809,244) | (282,550) |
Gain recognized on sale of working interest | 1,414,901 | 1,404,763 |
Stock based compensation | 74,709 | 33,414 |
Accrued interest and expenses not paid | 320,147 | |
Allowance for doubtful receivable | 19,204 | |
Differences in book/tax depreciation | 5,362 | |
Total noncurrent | 4,990,614 | 4,251,084 |
Valuation Allowance | (4,990,614) | (4,251,084) |
DEFERRED TAX LIABILITIES | ||
Valuation allowance increase | $ 740,576 | $ 552,168 |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) | 12 Months Ended |
Sep. 30, 2016USD ($) | |
Operating Loss Carryforwards [Line Items] | |
Amount | $ 26,436,899 |
Federal Net Operating Loss Carryforward Thirteen [Member] | |
Operating Loss Carryforwards [Line Items] | |
Amount | $ 5,852,461 |
Expiration | Sep. 30, 2036 |
Federal Net Operating Loss Carryforward Twelve [Member] | |
Operating Loss Carryforwards [Line Items] | |
Amount | $ 1,203,016 |
Expiration | Sep. 30, 2035 |
Federal Net Operating Loss Carryforward Eleven [Member] | |
Operating Loss Carryforwards [Line Items] | |
Amount | $ 11,567,666 |
Expiration | Sep. 30, 2034 |
Federal Net Operating Loss Carryforward Ten [Member] | |
Operating Loss Carryforwards [Line Items] | |
Amount | $ 7,155,229 |
Expiration | Sep. 30, 2033 |
Federal Net Operating Loss Carryforward Nine [Member] | |
Operating Loss Carryforwards [Line Items] | |
Amount | $ 513,914 |
Expiration | Sep. 30, 2032 |
Federal Net Operating Loss Carryforward Eight [Member] | |
Operating Loss Carryforwards [Line Items] | |
Amount | $ 64,097 |
Expiration | Sep. 30, 2031 |
Federal Net Operating Loss Carryforward Seven [Member] | |
Operating Loss Carryforwards [Line Items] | |
Amount | $ 7,713 |
Expiration | Sep. 30, 2030 |
Federal Net Operating Loss Carryforward Six [Member] | |
Operating Loss Carryforwards [Line Items] | |
Amount | $ 8,596 |
Expiration | Sep. 30, 2029 |
Federal Net Operating Loss Carryforward Five [Member] | |
Operating Loss Carryforwards [Line Items] | |
Amount | $ 17,986 |
Expiration | Sep. 30, 2028 |
Federal Net Operating Loss Carryforward Four [Member] | |
Operating Loss Carryforwards [Line Items] | |
Amount | $ 16,876 |
Expiration | Sep. 30, 2027 |
Federal Net Operating Loss Carryforward Three [Member] | |
Operating Loss Carryforwards [Line Items] | |
Amount | $ 18,447 |
Expiration | Sep. 30, 2026 |
Federal Net Operating Loss Carryforward Two [Member] | |
Operating Loss Carryforwards [Line Items] | |
Amount | $ 7,695 |
Expiration | Sep. 30, 2025 |
Federal Net Operating Loss Carryforward One [Member] | |
Operating Loss Carryforwards [Line Items] | |
Amount | $ 3,203 |
Expiration | Sep. 30, 2024 |
INCOME TAXES (Details 3)
INCOME TAXES (Details 3) - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||
Expected provision (based on statutory rate) | $ (776,387) | $ (553,737) |
Effect of: | ||
Increase (decrease) in valuation allowance | 740,576 | 552,168 |
State minimum tax, net of federal benefit | 31,002 | |
Non-deductible expense | 29,555 | 1,081 |
Other, net | $ 6,256 | 488 |
TOTAL PROVISION | $ 31,002 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | ||||||||
Jun. 10, 2016 | May 31, 2013 | Sep. 30, 2016 | Mar. 31, 2016 | Feb. 29, 2016 | Sep. 30, 2015 | Aug. 31, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Related Party Transaction [Line Items] | |||||||||
Accrued expense | $ 812,383 | $ 384,531 | |||||||
John Seitz [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Note payable from related party, original amount | $ 363,000 | $ 1,250,000 | $ 1,160,000 | $ 6,500,000 | |||||
Interest rate | 5.00% | 5.00% | 5.00% | 5.00% | |||||
Debt conversion, price per share | $ 0.12 | ||||||||
Amount owed to related party | $ 8,073,000 | ||||||||
Conversion of notes payable, shares | 10,000,000 | ||||||||
Accrued Interest Payable | 782,154 | 383,068 | |||||||
Stock issued for debt | $ 1,200,000 | ||||||||
Morris Family Partnership, L.P. [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Note payable from related party, original amount | $ 80,000 | ||||||||
Interest rate | 5.00% | ||||||||
Amount of debt converted | $ 80,000 | ||||||||
Dr. Ronald Bain [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Note payable from related party, original amount | $ 92,000 | $ 22,000 | $ 245,000 | ||||||
Interest rate | 5.00% | 5.00% | |||||||
Amount owed to related party | 267,000 | ||||||||
Accrued Interest Payable | 14,635 | $ 1,463 | |||||||
Domenica Seitz [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Accrued expense | $ 59,510 |
BRIDGE FINANCING - CONVERTIBL34
BRIDGE FINANCING - CONVERTIBLE PROMISSORY NOTES WITH ASSOCIATED WARRANTS (Details Narrative) - USD ($) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 12 Months Ended | ||
Jun. 10, 2016 | Aug. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2014 | |
Term | 5 years 9 months | |||||
Debt Discount Amortization | $ 196,249 | |||||
Promissory Notes [Member] | ||||||
Proceeds from issuance of convertible notes and warrants | $ 387,000 | $ 400,000 | ||||
Maturity term | 1 year | 1 year | ||||
Interest rate | 8.00% | 8.00% | ||||
Conversion price | $ 0.025 | $ 0.025 | ||||
Qualified equity financing amount | $ 3,000,000 | $ 3,000,000 | ||||
Fair value of debt | 155,761 | 199,712 | ||||
Beneficial conversion feature | 155,761 | 199,712 | ||||
Debt discount | 387,000 | $ 400,000 | ||||
Debt Discount Amortization | $ 76,438 | |||||
Promissory Notes [Member] | Related Party [Member] | ||||||
Proceeds from issuance of convertible notes and warrants | 172,000 | |||||
Extinguishment of related party payables | $ 70,000 | |||||
Number of warrants issued | 5,700,000 | |||||
Warrants [Member] | ||||||
Number of warrants issued | 13,300,000 | 13,300,000 | 12,900,000 | 12,900,000 | ||
Warrant exercise price | $ 0.03 | $ 0.03 | $ 0.03 | $ 0.03 | ||
Term | 3 years | 3 years | 3 years | 3 years | ||
Fair value of warrants | $ 200,288 | $ 200,288 | $ 231,239 | $ 200,288 |
COMMON STOCK_PAID IN CAPITAL (D
COMMON STOCK/PAID IN CAPITAL (Details Narrative) | Apr. 17, 2015USD ($)$ / sharesshares | May 31, 2016shares | Dec. 31, 2015shares | Sep. 30, 2015USD ($)$ / sharesshares | Sep. 30, 2014Numbershares | Aug. 31, 2014shares | Jul. 31, 2014USD ($)shares | May 31, 2014shares | Mar. 31, 2014shares | Aug. 31, 2016USD ($)$ / sharesshares | Sep. 30, 2016USD ($)$ / sharesshares | Jun. 30, 2016USD ($)$ / sharesshares | Sep. 30, 2016USD ($)$ / sharesshares | Sep. 30, 2015USD ($)Number$ / sharesshares | Sep. 30, 2014 |
Common Stock Issuance [Line Items] | |||||||||||||||
Common stock issued for cash, shares | 5,000,000 | 1,500,000 | |||||||||||||
Common stock issued for cash | $ | $ 500,000 | ||||||||||||||
Shares of stock issued for services | 520,273 | ||||||||||||||
Value of stock issued for services | $ | $ 15,608 | $ 177,393 | |||||||||||||
Term | 5 years 9 months | ||||||||||||||
Warrants [Member] | |||||||||||||||
Common Stock Issuance [Line Items] | |||||||||||||||
Number of warrants issued | 13,300,000 | 13,300,000 | 12,900,000 | 12,900,000 | |||||||||||
Warrant exercise price | $ / shares | $ 0.03 | $ 0.03 | $ 0.03 | $ 0.03 | |||||||||||
Term | 3 years | 3 years | 3 years | 3 years | |||||||||||
Fair value of warrants | $ | $ 200,288 | $ 200,288 | $ 231,239 | $ 200,288 | |||||||||||
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 | ||||||||||||
Vendor [Member] | |||||||||||||||
Common Stock Issuance [Line Items] | |||||||||||||||
Common stock issued for cash, shares | 1,579,607 | ||||||||||||||
Number of individuals to whom restricted stock awarded | Number | 3 | ||||||||||||||
Employees [Member] | Restricted Stock [Member] | |||||||||||||||
Common Stock Issuance [Line Items] | |||||||||||||||
Shares of stock issued for services | 3,030,000 | 550,000 | |||||||||||||
Number of individuals to whom restricted stock awarded | Number | 6 | ||||||||||||||
New Employee [Member] | Restricted Stock [Member] | |||||||||||||||
Common Stock Issuance [Line Items] | |||||||||||||||
Shares of stock issued for services | 200,000 | ||||||||||||||
John H. Malanga, Chief Financial Officer and Chief Accounting Officer [Member] | Restricted Stock [Member] | |||||||||||||||
Common Stock Issuance [Line Items] | |||||||||||||||
Shares of stock issued for services | 2,500,000 | ||||||||||||||
Value of stock issued for services | $ | $ 600,000 |
COMMON STOCK_PAID IN CAPITAL 36
COMMON STOCK/PAID IN CAPITAL (Details) | 12 Months Ended | |
Sep. 30, 2016$ / shares | ||
June 2016 Warrants [Member] | ||
Stock Price: | $ 0.054 | [1] |
Exercise Price | $ 0.03 | |
Term | 3 years | |
Risk Free Rate | 0.87% | |
Volatility | 135.00% | |
July 2016 Warrants [Member] | ||
Stock Price: | $ 0.040 | [1] |
Exercise Price | $ 0.03 | |
Term | 3 years | |
Risk Free Rate | 0.80% | |
Volatility | 138.00% | |
August 2016 Warrants [Member] | ||
Stock Price: | $ 0.032 | [1] |
Exercise Price | $ 0.03 | |
Term | 3 years | |
Risk Free Rate | 0.88% | |
Volatility | 137.00% | |
[1] | Fair market value on the date of agreement |
COMMON STOCK_PAID IN CAPITAL 37
COMMON STOCK/PAID IN CAPITAL (Details 1) - Warrants [Member] | 12 Months Ended |
Sep. 30, 2016USD ($)$ / sharesshares | |
Exercise Price $.03 [Member] | |
Warrants Outstanding, Number Outstanding | $ | $ 12,900,000 |
Warrants Outstanding, Weighted Average Remaining Contractual Life (Yrs) | 2 years 8 months 12 days |
Warrants Outstanding, Weighted Average Exercise Price | $ 0.03 |
Warrants Exercisable, Number Exercisable | shares | 12,900,000 |
Warrants Exercisable, Weighted Average Exercise Price | $ 0.03 |
Exercise Price $0.03 [Member] | |
Warrants Outstanding, Number Outstanding | $ | $ 10,000,000 |
Warrants Outstanding, Weighted Average Remaining Contractual Life (Yrs) | 2 years 9 months 18 days |
Warrants Outstanding, Weighted Average Exercise Price | $ 0.03 |
Warrants Exercisable, Number Exercisable | shares | 10,000,000 |
Warrants Exercisable, Weighted Average Exercise Price | $ 0.03 |
Exercise Price $0.03 [Member] | |
Warrants Outstanding, Number Outstanding | $ | $ 3,333,333 |
Warrants Outstanding, Weighted Average Remaining Contractual Life (Yrs) | 2 years 10 months 24 days |
Warrants Outstanding, Weighted Average Exercise Price | $ 0.03 |
Warrants Exercisable, Number Exercisable | shares | 3,333,333 |
Warrants Exercisable, Weighted Average Exercise Price | $ 0.03 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Stock-based compensation expense | $ 670,294 | $ 856,125 |
Stock-based compensation capitalized to unproved properties | $ 387,196 | $ 450,351 |
STOCK-BASED COMPENSATION (Det39
STOCK-BASED COMPENSATION (Details) | 12 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Number of Options | |
Outstanding at beginning of period | 2,000,000 |
Exercised | |
Cancelled | |
Outstanding at end of period | 2,000,000 |
Vested and expected to vest | 2,000,000 |
Exercisable at end of period | |
Weighted Average Exercise Price | |
Outstanding at beginning of period | $ / shares | $ 0.12 |
Outstanding at end of period | $ / shares | 0.12 |
Vested and expected to vest | $ / shares | $ 0.12 |
Weighted Average Remaining Contractual Term | |
Outstanding at beginning of period | 2 years 9 months 18 days |
Vested | 2 years 9 months 18 days |
STOCK-BASED COMPENSATION (Det40
STOCK-BASED COMPENSATION (Details 1) | 12 Months Ended |
Sep. 30, 2014$ / shares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Expected dividend yield | 0.00% |
Expected stock price volatility | 79.02% |
Risk-free interest rate | 1.53% |
Expected life of options | 5 years 9 months |
Weighted-average grant date fair value | $ 0.08 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||
Payments for exploration costs | $ 1,230,593 | $ 3,617,142 |
Nonspecified Siesmic Company [Member] | ||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||
Payments for exploration costs | 3,009,195 | |
Payment due during fiscal 2017 | $ 1,003,065 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 1 Months Ended | 2 Months Ended | ||||||||
Nov. 30, 2016 | Oct. 31, 2016 | Jun. 10, 2016 | Aug. 31, 2016 | Dec. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Aug. 31, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Notes payable | $ 4,156 | $ 4,988 | ||||||||
John Seitz [Member] | ||||||||||
Borrowed amount | $ 363,000 | $ 1,250,000 | $ 1,160,000 | $ 6,500,000 | ||||||
Debt interest rate | 5.00% | 5.00% | 5.00% | 5.00% | ||||||
Promissory Notes [Member] | ||||||||||
Convertible notes sold | $ 387,000 | $ 400,000 | ||||||||
Debt interest rate | 8.00% | 8.00% | ||||||||
Promissory Notes [Member] | Bridge Financing Agreements [Member] | ||||||||||
Notes payable | $ 837,000 | |||||||||
Subsequent Event [Member] | ||||||||||
Insurance policy purchased | $ 170,850 | |||||||||
Insurance policy Premium | $ 155,010 | |||||||||
Subsequent Event [Member] | Promissory Notes [Member] | John Seitz [Member] | ||||||||||
Borrowed amount | $ 78,000 | |||||||||
Debt interest rate | 5.00% | |||||||||
Subsequent Event [Member] | Promissory Notes [Member] | Bridge Financing Agreements [Member] | ||||||||||
Convertible notes sold | $ 50,000 |