Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 30, 2019 | Sep. 26, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | GULFSLOPE ENERGY, INC. | |
Entity Central Index Key | 0001341726 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Entity File Number | 000-51638 | |
Entity Incorporation, State Code | DE | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Common Stock, Shares Outstanding | 1,092,266,844 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2019 | Sep. 30, 2018 |
Current Assets | ||
Cash | $ 2,299,930 | $ 5,621,814 |
Prepaid Expenses and Other Current Assets | 57,494 | 32,042 |
Accounts Receivable, net | 14,164,519 | 6,286,796 |
Total Current Assets | 16,521,943 | 11,940,652 |
Property and Equipment, Net of Depreciation | 10,901 | 14,786 |
Oil and Natural Gas Properties, Full Cost Method of Accounting Unproved Properties | 17,318,916 | 8,112,784 |
Other Non-Current Assets | 3,699,319 | 24,785 |
Total Non-Current Assets | 21,029,136 | 8,152,355 |
Total Assets | 37,551,079 | 20,093,007 |
Current Liabilities | ||
Accounts Payable | 19,376,643 | 7,591,236 |
Deposits from Joint Interest Owners | 4,078,786 | |
Related Party Payable | 351,025 | 306,386 |
Accrued Interest Payable | 2,102,729 | 1,732,239 |
Accrued Expenses and Other Payables | 1,507,541 | 268,862 |
Loans from Related Parties | 8,725,500 | 9,084,500 |
Notes Payable | 307,666 | |
Term loan | 716,265 | |
Convertible Promissory Notes Payable, net of Debt Discount | 84,515 | 135,000 |
Funds Received from Capital Raise | 965,800 | |
Derivative Financial Instruments | 3,917,008 | 271,710 |
Other | 53,510 | 44,723 |
Total Current Liabilities | 37,142,402 | 24,479,242 |
Total Liabilities | 37,142,402 | 24,479,242 |
Commitments and Contingencies (Note 9) | ||
Stockholders' Equity | ||
Preferred Stock; par value ($0.001); Authorized 50,000,000 shares none issued or outstanding | ||
Common Stock; par value ($0.001); Authorized 1,500,000,000 shares; issued and outstanding 1,092,266,844 and 832,013,272, as of June 30, 2019 and September 30, 2018, respectively | 1,092,266 | 832,013 |
Additional Paid-in-Capital | 53,890,767 | 36,640,009 |
Accumulated Deficit | (54,574,356) | (41,858,257) |
Total Stockholders' Equity (Deficit) | 408,677 | (4,386,235) |
Total Liabilities and Stockholders' Equity (Deficit) | $ 37,551,079 | $ 20,093,007 |
Condensed Balance Sheets (Una_2
Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2019 | Sep. 30, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 50,000,000 | 50,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 1,500,000,000 | 1,500,000,000 |
Common stock, issued | 1,092,266,844 | 832,013,272 |
Common stock, outstanding | 1,092,266,844 | 832,013,272 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Impairment of Oil and Natural Gas Properties | $ 4,252,539 | $ 4,252,539 | ||
General & Administrative Expenses | 439,242 | $ 785,990 | 955,901 | $ 1,176,455 |
Net Loss from Operations | (4,691,781) | (785,990) | (5,208,440) | (1,176,455) |
Other Income/(Expenses): | ||||
Interest Expense, net | (2,080,620) | (207,335) | (2,284,928) | (659,901) |
Loss on Debt Extinguishment | (5,099,340) | (217,141) | ||
Gain (Loss) on Derivative Financial Instruments | (106,399) | (123,391) | ||
Net Loss Before Income Taxes | (6,878,800) | (993,325) | (12,716,099) | (2,053,497) |
Net Loss | $ (6,878,800) | $ (993,325) | $ (12,716,099) | $ (2,053,497) |
Loss Per Share - Basic and Diluted (in dollars per share) | $ (0.01) | $ 0 | $ (0.01) | $ 0 |
Weighted Average Shares Outstanding - Basic and Diluted (in shares) | 1,090,288,822 | 785,008,992 | 946,785,438 | 750,498,503 |
Condensed Statements of Stockho
Condensed Statements of Stockholders' Equity (Deficit) (unaudited) - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Beginning balance at Sep. 30, 2017 | $ 692,196 | $ 27,212,577 | $ (39,221,523) | $ (11,316,750) |
Beginning balance (in shares) at Sep. 30, 2017 | 692,196,625 | |||
Stock Based Compensation | 1,464,531 | 1,464,531 | ||
Common Stock Issued To Settle Debt | $ 1,200 | 85,800 | 87,000 | |
Common Stock Issued To Settle Debt (in shares) | 1,200,000 | |||
Common Stock Issued for Services | $ 80,294 | 4,814,961 | 4,895,255 | |
Common Stock Issued for Services (in shares) | 80,293,425 | |||
Common Stock Issued To Settle Debt | $ 2,000 | 47,094 | 49,094 | |
Common Stock Issued To Settle Debt (in shares) | 2,000,000 | |||
Value of Beneficial Conversion Feature in Conjunction with Convertible Promissory Notes | 103,519 | 103,519 | ||
Value of warrants in conjunction with convertible promissory notes | 47,386 | 47,386 | ||
Common Stock Issued for Conversion of Convertible Promissory Note and Accrued Interest | $ 38,110 | 834,701 | 872,811 | |
Common Stock Issued for Conversion of Convertible Promissory Note and Accrued Interest (in shares) | 38,110,462 | |||
Value of Warrants issued with Bridge Note Extensions | 217,141 | 217,141 | ||
Net loss | (2,053,497) | (2,053,497) | ||
Ending balance at Jun. 30, 2018 | $ 813,800 | 34,827,710 | (41,275,020) | (5,633,510) |
Ending balance (in shares) at Jun. 30, 2018 | 813,800,512 | |||
Beginning balance at Mar. 31, 2018 | $ 778,820 | 32,618,329 | (40,281,695) | (6,884,546) |
Beginning balance (in shares) at Mar. 31, 2018 | 778,820,050 | |||
Stock Based Compensation | 1,371,150 | 1,371,150 | ||
Common Stock Issued To Settle Debt | $ 1,200 | 85,800 | 87,000 | |
Common Stock Issued To Settle Debt (in shares) | 1,200,000 | |||
Common Stock Issued for Conversion of Convertible Promissory Note and Accrued Interest | $ 33,780 | 752,431 | 786,211 | |
Common Stock Issued for Conversion of Convertible Promissory Note and Accrued Interest (in shares) | 33,780,462 | |||
Net loss | (993,325) | (993,325) | ||
Ending balance at Jun. 30, 2018 | $ 813,800 | 34,827,710 | (41,275,020) | (5,633,510) |
Ending balance (in shares) at Jun. 30, 2018 | 813,800,512 | |||
Beginning balance at Sep. 30, 2018 | $ 832,013 | 36,640,009 | (41,858,257) | $ (4,386,235) |
Beginning balance (in shares) at Sep. 30, 2018 | 832,013,272 | 832,013,272 | ||
Stock Based Compensation | 1,217,213 | $ 1,217,213 | ||
Warrants Issued in Debt Transaction | 5,090,470 | 5,090,470 | ||
Bridge Note Warrant Extensions | 152,078 | 152,078 | ||
Stock Issued in Capital Raise | $ 19,325 | 946,925 | 966,250 | |
Stock Issued in Capital Raise (in shares) | 19,325,000 | |||
Stock Issued for Warrant Exercise | $ 240,928 | 9,844,072 | 10,085,000 | |
Stock Issued for Warrant Exercise (in shares) | 240,928,572 | |||
Net loss | (12,716,099) | (12,716,099) | ||
Ending balance at Jun. 30, 2019 | $ 1,092,266 | 53,890,767 | (54,574,356) | $ 408,677 |
Ending balance (in shares) at Jun. 30, 2019 | 1,092,266,844 | 1,092,266,844 | ||
Beginning balance at Mar. 31, 2019 | $ 1,089,433 | 52,794,028 | (47,695,556) | $ 6,187,905 |
Beginning balance (in shares) at Mar. 31, 2019 | 1,089,433,510 | |||
Stock Based Compensation | 415,111 | 415,111 | ||
Warrants Issued in Debt Transaction | 447,383 | 447,383 | ||
Bridge Note Warrant Extensions | 152,078 | 152,078 | ||
Stock Issued for Warrant Exercise | $ 2,833 | 82,167 | 85,000 | |
Stock Issued for Warrant Exercise (in shares) | 2,833,334 | |||
Net loss | (6,878,800) | (6,878,800) | ||
Ending balance at Jun. 30, 2019 | $ 1,092,266 | $ 53,890,767 | $ (54,574,356) | $ 408,677 |
Ending balance (in shares) at Jun. 30, 2019 | 1,092,266,844 | 1,092,266,844 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
OPERATING ACTIVITIES | ||
Net Loss | $ (12,716,099) | $ (2,053,497) |
Adjustments to Reconcile Net Loss to Net Cash (Used In) Provided By Operating Activities: | ||
Impairment of Oil and Natural Gas Properties | 4,252,539 | |
Depreciation | 3,884 | 3,712 |
Stock Based Compensation | 558,018 | 850,798 |
Loss on Derivative Financial Instruments | 123,391 | |
Stock Issued for Services | 17,145 | |
Debt Discount Amortization | 249,670 | 254,501 |
Loss Recorded to Interest Expense for Issuance of Convertible Notes | 1,726,149 | |
Loss on Debt Extinguishment | 5,099,340 | 217,141 |
Changes in Operating Assets and Liabilities: | ||
(Increase)/Decrease in Accounts Receivable | (11,552,257) | (627,552) |
(Increase)/Decrease in Prepaid Expenses | 120,858 | 96,688 |
Increase/(Decrease) in Deposits from Joint Interest Owners | (4,078,786) | 3,015,000 |
Increase/(Decrease) in Accounts Payable | 7,532,813 | 607,156 |
Increase/(Decrease) in Related Party Payable | 44,638 | 2,011 |
Increase/(Decrease) in Accrued Expenses and Other Payables | 1,238,679 | (100,000) |
Increase/(Decrease) in Other | 8,787 | |
Increase/(Decrease) in Accrued Interest | 370,490 | 400,212 |
Net Cash (Used In) Provided By Operating Activities | (7,017,885) | 2,683,315 |
INVESTING ACTIVITIES | ||
Equipment Purchases | (3,244) | |
Deposits | (24,785) | |
Insurance proceeds received | 660,629 | |
Investments in Oil and Gas Properties | (9,762,984) | (752,814) |
Proceeds From Sale of Working Interest | 2,884,651 | |
Net Cash (Used In) Provided By Investing Activities | (9,102,355) | 2,103,808 |
FINANCING ACTIVITIES | ||
Proceeds from Term Loan | 11,000,000 | |
Proceeds from Convertible Promissory Notes | 1,819,000 | 200,000 |
Proceeds from Exercise of Warrants | 85,000 | |
Payments on Note Payable | (105,644) | (116,882) |
Net Cash Provided By Financing Activities | 12,798,356 | 83,118 |
Net Increase/(Decrease) in Cash | (3,321,884) | 4,870,241 |
Beginning Cash Balance | 5,621,814 | 6,426 |
Ending Cash Balance | 2,299,930 | 4,876,667 |
Supplemental Schedule of Cash Flow Activities: | ||
Cash Paid for Interest | 3,903 | 5,188 |
Non-Cash Financing and Investing Activities: | ||
Prepaid Asset Financed by Note Payable | 146,310 | 156,718 |
Debt Issuance Costs in Accounts Payable | 555,923 | |
Capital Expenditures Included in Accounts Payable | 3,088 | |
Stock-Based Compensation Capitalized to Unproved Properties | 659,646 | 613,733 |
Stock Issued for Consulting Services Capitalized to Unproved Properties | 4,880,000 | |
Loans Extinguished through Exercise of Warrants | 10,000,000 | |
Stock Issued for Settlement of Accounts Payable & Accrued Expenses | 73,505 | |
Wells In Process Included in Accounts Payable | 3,696,671 | 85,127 |
Stock Issued to Settle Convertible Promissory Notes and Accrued Interest | $ 872,812 | |
Funds Received from Capital Raise Transferred to Equity | 965,800 | |
Bridge Note Warrant Extension Recorded to Additional Paid-In-Capital | 152,078 | |
Derivative Liability Recorded at Issuance of Convertible Promissory Notes | $ 3,521,907 |
ORGANIZATION AND NATURE OF BUSI
ORGANIZATION AND NATURE OF BUSINESS | 9 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND NATURE OF BUSINESS | NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS GulfSlope Energy, Inc. (the “Company,” “GulfSlope,” and words of similar import), a Delaware corporation, is an independent crude oil and natural gas exploration and production company whose interests are concentrated in the United States Gulf of Mexico (“GOM”) federal waters offshore Louisiana. GulfSlope is a technically driven company who uses its licensed 2.2 million acres of three-dimensional (3-D) seismic data to identify, evaluate, and acquire assets with attractive economic profiles. As of June 30, 2019, GulfSlope has no production or proved reserves. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Jun. 30, 2019 | |
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 Company’s condensed financial statements and accompanying notes. Actual results could differ materially from those estimates. Certain information, accounting policies, and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted pursuant to certain rules and regulations of the Securities and Exchange Commission (“SEC”). The condensed financial statements should be read in conjunction with the audited financial statements for the year ended September 30, 2018, which were included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2018, and filed with the Securities and Exchange Commission on December 31, 2018. Cash GulfSlope considers highly liquid investments with original maturities to the Company of three months or less to be cash equivalents. There were no cash equivalents at June 30, 2019 and September 30, 2018. Liquidity/Going Concern The Company has incurred accumulated losses as of June 30, 2019 of $54.6 million, has negative working capital of $20.6 million and for the nine months ended June 30, 2019 generated losses of $12.7 million and negative cash flows from operations of $7 million. Further losses are anticipated in developing our business. As a result, there exists substantial doubt about our ability to continue as a going concern. As of June 30, 2019, we had $2.3 million of unrestricted cash on hand, $2.0 million of this amount is for the payment of joint payables from drilling operations. The Company estimates that it will need to raise a minimum of $10.0 million to meet its obligations and planned expenditures through September 2020. The $10 million is comprised primarily of capital project expenditures as well as general and administrative expenses. It does not include any amounts due under outstanding debt obligations, which amounted to $11.6 million of current principal and interest as of June 30, 2019. The Company plans to finance operations and planned expenditures through equity and/or debt financings and/or farm-out agreements. The Company also plans to extend the agreements associated with all loans, the accrued interest payable on these loans, as well as the Company’s accrued liabilities. There are no assurances that financing will be available with acceptable terms, if at all or that obligations can be extended. If the Company is not successful in obtaining financing or extending obligations, operations would need to be curtailed or ceased, or the Company would need to sell assets or consider alternative plans up to and including restructuring. 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 its oil and natural gas exploration and development activities as defined by the 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”), whereby capitalized costs are amortized over total proved reserves. The amortization base in the UOP calculation includes the sum of proved property, net of accumulated depreciation, depletion and amortization (“DD&A”), estimated future development costs (future costs to access and develop proved reserves), and asset retirement costs, less related salvage value. The costs of unproved properties and related capitalized costs (such as G&G costs) are withheld from the amortization calculation until such time as they are either developed or abandoned. Unproved properties and properties under development are reviewed for impairment at least quarterly and are determined through an evaluation 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 cost center ceiling is defined as the sum of (a) estimated future net revenues, discounted at 10% per annum, from proved reserves, (b) the cost of properties not being amortized, if any, and (c) the lower of cost or market value of unproved properties included in the cost being amortized. 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 June 30, 2019, the Company’s oil and gas properties consisted of wells in process, and capitalized exploration and acquisition costs for unproved properties and no proved reserves. Derivative Financial Instruments The accounting treatment of derivative financial instruments requires that the Company record certain embedded conversion options at their fair value as of the inception date of the agreement and at fair value as of each subsequent balance sheet date with any change in fair value recorded as income or expense. As a result of entering into certain note agreements, for which such instruments contained a variable conversion feature with no floor, the Company has adopted a sequencing policy in accordance with ASC 815-40-35-12 whereby all future instruments may be classified as a derivative liability with the exception of instruments related to share-based compensation issued to employees or directors, as long as the certain variable convertible instruments exist. Basic and Dilutive Earnings Per Share Basic (loss) per share (“EPS”) is computed by dividing net income (loss) (the numerator) by the weighted average number of common shares outstanding for the period (denominator). Diluted EPS is computed by dividing net income (loss) by the weighted average number of common shares and potential common shares outstanding (if dilutive) during each period. Potential common shares include stock options, warrants, and 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 and nine months ended June 30, 2019 and 2018, the potentially dilutive shares are anti-dilutive and are thus not added into the loss per share calculations. As of June 30, 2019 and 2018, there were 357,582,559 and 214,418,438 potentially dilutive shares, respectively. Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, “Leases,” and in March 2019, the FASB issued ASU No. 2019-01, “Leases: Codification Improvements”, which updated the accounting guidance related to leases to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. They also clarify implementation issues. These updates are effective for public companies for annual periods beginning after December 15, 2018, including interim periods therein. Accordingly, the standard is effective for the Company for its annual period beginning October 1, 2019, and interim periods therein. The standard is to be applied utilizing a modified retrospective approach, with early adoption permitted. We will adopt these standards on October 1, 2019 with a cumulative adjustment to retained earnings rather than retrospectively adjusting prior periods. This adoption approach will result in a balance sheet presentation that is not comparable to the prior period in the first year of adoption. The Company has yet to begin to assess the quantitative effect of the new standard on the Company’s financial statements and intends to begin the assessment in the upcoming period. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718) |
OIL AND NATURAL GAS PROPERTIES
OIL AND NATURAL GAS PROPERTIES | 9 Months Ended |
Jun. 30, 2019 | |
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | |
OIL AND NATURAL GAS PROPERTIES | NOTE 3 – OIL AND NATURAL GAS PROPERTIES The Company currently has under lease seven federal Outer Continental Shelf blocks and has licensed 2.2 million acres of three-dimensional (3-D) seismic data in its area of concentration. In January 2018, the Company entered into a strategic partnership with Delek GOM Investments, LLC. (“Delek”), and Texas South Energy, Inc. (“Texas South”) (collectively, the “Parties”) and executed a participation agreement (the “Agreement”) for a multi-phase exploration program. Under the terms of the Agreement, the Parties have committed to drill the Company’s “Canoe” and “Tau” prospects (the “Initial Phase”) with Delek having the option to participate in two additional two-well drilling phases and a final, three-well drilling phase (collectively, the “Phases”). In each Phase, Delek will earn a 75% working interest upon paying 90% of the exploratory costs associated with drilling each exploratory well. The Company will retain a 20% working interest while paying 8% of the costs associated with drilling each exploratory well. The Company will be required to fund 20% of well costs in excess of 115% of budget. In addition, Delek will pay the Company approximately $1.1 million in cash for each Prospect when the respective exploration plan is filed with BOEM for each phase. Also, each Party will be responsible for their pro rata share (based on working interest) of delay rentals associated with the Prospects. The Company will be the Operator during exploratory drilling of the Prospect, however, subsequent to a commercial discovery, Delek will have the right to become the Operator. Delek will have the right to terminate this Agreement at the conclusion of any drilling Phase. Delek will also have the option to purchase up to 5% of the Company’s common stock, par value $0.001 per share (the “Common Stock”), upon fulfilling its obligation for each Phase (maximum of 20% in the aggregate) at a price per share equal to a 10% discount to the 30-day weighted average closing price for the Common Stock preceding the acquisition. This option will expire January 8, 2020. The Company, as the operator of two wells drilled in the Gulf of Mexico, has incurred tangible and intangible drilling costs for the wells in process and has billed its working interest partners for their respective shares of the drilling costs to date. GulfSlope drilled the first well, Canoe, to a total depth of 5,765 feet (5,670 feet TVD). Multiple open hole plugs were set across several intervals and the well is equipped with a mud-line suspension system for possible future re-entry. Calibration of seismic amplitudes, petrophysical analysis, reservoir engineering and scoping of development is currently underway to determine the commerciality of these sands and that work is expected to be completed in the first calendar quarter of 2020. The second well, Tau, was drilled to a measured depth of 15,254 feet, as compared to the originally permitted 29,857 foot measured depth. Producible hydrocarbon zones were not established to the current depth, but hydrocarbon shows were encountered. Complex geomechanical conditions required two by-pass wellbores, one sidetrack wellbore, and eight casing strings to reach the current depth. Equipment limitations prevented further drilling. In addition, the drilling rig had contractual obligations related to another operator. Due to these factors, the Company elected to abandon this well in a manner that would allow for re-entry at a later time. The drilling, pressure, and reservoir information has confirmed geophysical and geological models, and reinforces the Company’s confidence that there is resource potential. The Company is currently evaluating various options related to future operations in this wellbore and testing of the deeper Tau prospect. As of June 30, 2019, the Company’s oil and natural gas properties consisted of unproved properties, wells in process and no proved reserves. The Company incurred approximately $4.3 million of impairment of oil and natural gas properties for the nine months ended June 30, 2019 resulting from the expiration of oil and natural gas leases. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 4 – RELATED PARTY TRANSACTIONS During April 2013 through September 2017, the Company entered into convertible promissory notes whereby it borrowed a total of $8,675,500 from John Seitz, the chief executive officer (“CEO”). The notes are due on demand, bear interest at the rate of 5% per annum, and $5,300,000 of the notes 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). As of June 30, 2019, the total amount owed to John Seitz is $8,675,500. This amount is included in loans from related parties within the balance sheet. There was a total of $1,970,032 of unpaid interest associated with these loans included in accrued interest payable within the balance sheet as of June 30, 2019. On November 15, 2016, a family member of the CEO entered into a $50,000 convertible promissory note with associated warrants (“Bridge Financing”) under the same terms received by other investors (see Note 5). Domenica Seitz CPA, related to John Seitz, has provided accounting consulting services to the Company. During the three and nine month period ended June 30, 2019, the services provided were valued at $14,880 and $44,640, respectively. During the three and nine month period ended June 30, 2018, the services provided were valued at $5,915 and $17,745, respectively. The Company has accrued these amounts, and they have been reflected in related party payable in the June 30, 2019 financial statements. See Note 5 for a description of the Delek term loan. |
TERM LOAN AND CONVERTIBLE PROMI
TERM LOAN AND CONVERTIBLE PROMISSORY NOTES | 9 Months Ended |
Jun. 30, 2019 | |
Notes Payable [Abstract] | |
TERM LOAN AND CONVERTIBLE PROMISSORY NOTES | NOTE 5 – TERM LOAN AND CONVERTIBLE PROMISSORY NOTES Between June and November 2016, the Company issued eleven convertible promissory notes (“Bridge Financing Notes”) with associated warrants in a private placement to accredited investors for total gross proceeds of $837,000. Three of the notes were to related parties for proceeds totaling $222,000, including the extinguishment of $70,000 worth of related party payables. The convertible notes had a maturity of one year (prior to extension), 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 approximately 27.9 million warrants, with an exercise price of $0.03 and a term of the earlier of three years or upon a change of control. Upon maturity of the eleven promissory notes during 2017, the Company issued approximately 7 million extension warrants with an exercise price of $0.03 per share (equal to 25% of the original warrant amount) to the holders of the notes to extend the terms to January 15, 2018. Upon revised maturity of the eleven promissory notes on January 15, 2018, the Company issued approximately 2.8 million extension warrants with an exercise price of $0.10 per share (equal to 10% of the original warrant amount) to the holders of the notes to extend the term to April 16, 2018. In June 2018, the maturity date of all of the notes was extended to January 15, 2019. Six of the Bridge Financing Notes with a principal balance of $560,000 plus accrued interest of approximately $87,000 were converted during the year ended September 30, 2018. The remaining note balance at June 30, 2019 is $277,000. Accrued interest for the quarter ended June 30, 2019, was approximately $6,000 and cumulative accrued interest was approximately $66,000. The Company completed the extension of the remaining notes to April 30, 2020. In consideration for the extension of the remaining notes, the Company extended the term of the warrants until April 30, 2020. As a result, approximately $152,000 was recorded as a debt discount and to additional paid-in capital for the modification. On March 1, 2019, the Company entered into a Term Loan Agreement by and among the Company, as borrower, and Delek, as lender. In the Term Loan Agreement, Delek agreed to provide the Company with multiple draw term loans in an aggregate stated principal amount of up to $11.0 million (the “Term Loan Facility” and the loans thereunder, the “Loans”). The maturity date of the Term Loan Facility is six months following the closing date of the Term Loan Agreement which is March 1, 2019. Until such maturity date, the Loans under the Term Loan Agreement shall bear interest at a rate per annum equal to 5.0%, payable in arrears on the maturity date. If an event of default occurs, all Loans under the Term Loan Agreement shall bear interest at a rate equal to 7.0%, payable on demand. In connection with the Term Loan Agreement, the Company entered into: (i) a Subordination Agreement (the “Subordination Agreement”) by and among the Company, as borrower, John N. Seitz, as subordinated lender (the “Subordinated Lender”), and Delek, as senior lender; (ii) a Security Agreement (the “Security Agreement”) among the Company, as debtor, and Delek, as lender; and (iii) warrants to purchase 238,095,238 shares of Common Stock, at an exercise price of $0.042 per share issued to Delek GOM (the “Warrants”). The Company may elect, at its option, to prepay borrowings outstanding under the Term Loan Agreement in multiples of $100,000 and not less than $500,000 without premium or penalty. The Company may be required to prepay the Loans with any net cash proceeds resulting from an asset sale, receipt of insurance proceeds from certain casualty events, proceeds from equity issuances or incurrence of indebtedness other than the Loans (subject to a $500,000 carve-out to be applied toward the Company’s general corporate purposes) or receipt of any cash proceeds from any payments, refunds, rebates or other similar payments and amounts under the Company’s operative documents. This potentially includes the $0.7 million insurance proceeds received related to the Company’s share during the nine-months ended June 30, 2019. Amounts outstanding under the Term Loan Agreement are secured by a security interest in substantially all of the properties and assets of the Company. As of March 6, 2019, the Company had borrowed a total of $10.0 million under the Term Loan Facility and issued to Delek GOM warrants to purchase 238,095,238 shares of Common Stock; and Delek GOM fully exercised the warrants through a Loan Reduction Exercise, thereby extinguishing the Company’s outstanding obligations to Delek GOM as of that date. The Company allocated the proceeds between debt and warrants on a relative fair value basis, recording a debt discount of approximately $5.1 million. The exercise of the warrants through the extinguishment of the loan was accounted for as a standard warrant exercise and an extinguishment of debt including a recognition of a loss in the amount of the debt discount of approximately $5.1 million. On April 19, 2019, the Company borrowed $1.0 million under the Term Loan Facility and issued to Delek warrants to purchase 23,809,524 shares of stock. The Company allocated the proceeds between debt and warrants on a relative fair value basis, recording a debt discount of approximately $0.5 million. As of June 30, 2019, the warrants have not been exercised and the term loan is outstanding. On June 21, 2019 the Company entered into a Securities Purchase Agreement (“SPA ”) under the terms of which the Company will issue and sell to Buyers up to an aggregate of $3,000,000 of convertible debentures (“ ”) and associated warrants. On June 21, 2019, approximately $2,100,000 of Convertible Debentures were purchased upon the signing of the SPA (the “ ”), and $400,000 and $500,000, respectively, shall be purchased by the holder upon: (1) the filing of a Registration Statement with the U.S. Securities and Exchange Commission (the “ ”) registering the resale of the Conversion Shares by the Buyers which occurred on August 5, 2019; and (2) the date a registration statement covering the underlying common shares has first been declared effective by the SEC. The Convertible Debentures accrue interest at eight percent per annum, mature on June 21, 2020, and are convertible at the option of the holder any time after issuance into common stock at a conversion rate of the lesser of: (1) $0.05 per share; or (2) 80% of the lowest volume weighted adjusted price (as reported by Bloomberg, LP) for the ten consecutive trading days immediately preceding conversion. In addition, the holder received warrants to purchase an aggregate of 50 million shares of common stock at an exercise price of $0.04 per share. Such warrants expire on the fifth anniversary of issuance. The offering costs related to this issuance were approximately $281,000. The Company evaluated the conversion feature and concluded that it should be bifurcated and accounted for as a derivative liability due to the variable conversion feature which does not contain an explicit limit on the number of shares that are required to be issued. In addition, the Company concluded the warrants required treatment as derivative liabilities as the Company could not assert in has sufficient authorized but unissued shares to settle the warrants upon exercise when taking into account other stock based commitments including the Convertible Debentures. Accordingly, the embedded conversion feature and warrants were recorded at fair value at issuance and are subsequently remeasured to fair value each reporting period. The fair value of the derivative liabilities at issuance exceeded the net proceeds received resulting in an approximately $1.7 million day one charge to interest expense in the Condensed Statement of Operations. The fair value of the embedded conversion feature was determined utilizing a Geometric Brownian Motion Stock Path Based Monte Carlo Simulation that utilized the following key assumptions: June 21, 2019 June 30, 2019 Stock Price $ 0.041 $ 0.041 Fixed Exercise Price $ 0.050 $ 0.050 Volatility 148 % 150 % Term (Years) 1.00 0.98 Risk Free Rate 1.95 % 1.92 % In addition to the fixed exercise price noted above, the model incorporates the variable conversion price which is simulated as 80% of the lowest trading price within the ten consecutive days preceding presumed conversion. The Company’s term loan and convertible promissory notes consisted of the following as of June 30, 2019. Notes Payable at June 30, 2019 Notes Discount Notes, Net of Discount Term Loan 1,000,000 (283,735) 716,265 Convertible Promissory Notes 2,327,000 (2,242,485) 84,515 Total 3,327,000 (2,526,220) 800,780 |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 9 Months Ended |
Jun. 30, 2019 | |
Fair Value Measurement | |
FAIR VALUE MEASUREMENT | NOTE 6 – FAIR VALUE MEASUREMENT Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are classified and disclosed in one of the following categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. GulfSlope considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that GulfSlope values using observable market data. Substantially all of these inputs are observable in the marketplace throughout the term of the derivative instrument, can be derived from observable data, or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category include non-exchange traded derivative financial instruments as well as warrants to purchase common stock and long-term incentive plan liabilities calculated using the Black-Scholes model to estimate the fair value as of the measurement date. Level 3: Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity). As required by ASC 820-10, financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. Fair Value on a Recurring Basis The following table sets forth by level within the fair value hierarchy the Company’s derivative financial instruments that were accounted for at fair value on a recurring basis as of June 30, 2019: Description Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Total Fair Derivative Financial Instrument at September 30, 2018 $ — $ (271,710 ) $ — $ (271,710 ) Issuance of Derivative Financial Instruments — (3,521,907 ) — (3,521,907 ) Derivative Financial Instrument at June 30, 2019 $ — $ (3,917,008 ) $ — $ (3,917,008 ) Non-recurring fair value assessments include impaired oil and natural gas property assessments and stock based compensation. During the nine months ended June 30, 2019, the Company recorded an impairment of $4.2 million to its oil and natural gas properties for the expiration of oil and natural gas leases whose value was determined to be zero. |
COMMON STOCK_PAID IN CAPITAL
COMMON STOCK/PAID IN CAPITAL | 9 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
COMMON STOCK/PAID IN CAPITAL | NOTE 7 – COMMON STOCK/PAID IN CAPITAL As discussed in Note 5, between June and November 2016, the Company issued 27.9 million warrants in conjunction with the Bridge Financing Notes. The warrants have an exercise price of $0.03 and a term of the earlier of three years or upon a change of control. Based upon the allocation of proceeds between the convertible notes payable and the warrants, approximately $452,422 was allocated to the warrants. During June through August 2017, the maturity date of all of the Bridge Financing Notes was extended to January 15, 2018, in exchange for the issuance of 25% additional warrants. The warrants have an exercise price of $0.03 and the same expiration date (three years from original transaction) as the original warrants. On January 15, 2018, the maturity date of the Bridge Financing Notes was extended to April 16, 2018, in exchange for the issuance of 10% additional warrants (see Note 5 for status of notes). The warrants have an exercise price of $0.10 per share and the same expiration date (three years from original transaction) as the original warrants. Through June 30, 2019, approximately 3.3 million warrants have been exercised, approximately 4.0 million have expired and approximately 30.5 million remain outstanding. The fair value of the warrants was determined using the Black Scholes valuation model with the following key assumptions: Warrants Issue Date June 2016 July 2016 August 2016 November 2016 June 2017 July 2017 August 2017 January 2018 Warrants Outstanding 7.6 10.0 3.3 1.7 1.9 2.5 1.25 2.3 Stock Price (1) $ 0.054 $ 0.040 $ 0.032 $ 0.029 $ 0.025 $ 0.019 $ 0.016 $ 0.11 Exercise Price $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.10 Term (2) 3 years 3 years 3 years 3 years 2 years 2 years 2 years 1.5 years Risk Free Rate .87 % .80 % .88 % 1.28 % 1.35 % 1.35 % 1.33 % 1.89 % Volatility 135 % 138 % 137 % 131 % 135 % 136 % 135 % 163 % (1) Fair market value on the date of agreement. (2) Average term. Below is a summary of warrants issued in conjunction with convertible notes which were paid in full as of September 30, 2018. The warrants are outstanding at June 30, 2019. Warrants Outstanding Warrants Exercisable Exercise Price Number Outstanding Remaining Contractual Life (Yrs) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.10 550,000 2.50 $ 0.10 550,000 $ 0.10 $ 0.10 1,100,000 2.71 $ 0.10 1,100,000 $ 0.10 $ 0.10 1,100,000 3.30 $ 0.10 1,100,000 $ 0.10 $ 0.10 1,100,000 3.46 $ 0.10 1,100,000 $ 0.10 During the nine months ended June 30, 2019, the Company issued approximately 19.3 million shares of common stock and approximately 9.7 million warrants to accredited investors in a private placement. The funds were received in the prior fiscal year and included as a liability because the transaction did not close until the current fiscal year and it was moved to equity during the quarter ended December 31, 2018. Based upon the allocation of proceeds between the common stock and the warrants, approximately $259,000 was allocated to the warrants. The fair value of the warrants was determined using the Black Scholes valuation model with the following key assumptions: December 2018 Number of Warrants Issued 9,662,500 Stock Price $ 0.044 Exercise Price $ 0.09 Term 3 years Risk Free Rate 2.46 % Volatility 149 % As discussed in Note 5, as of March 6, 2019, the Company had borrowed a total of $10.0 million under the Term Loan Facility and issued to Delek GOM warrants to purchase approximately 238 million shares of common Stock and Delek GOM fully exercised the warrants through a Loan Reduction Exercise and was issued approximately 238 million shares of common stock. Upon receiving the proceeds, the Company allocated the proceeds between debt and warrants on a relative fair value basis, recording a debt discount of approximately $5.1 million. The exercise of the warrants through the extinguishment of the loan was accounted for as a standard warrant exercise and an extinguishment of debt including a recognition of a loss in the amount of the debt discount of approximately $5.1 million. On April 19, 2019, the Company borrowed $1.0 million under the Term Loan Facility and issued to Delek warrants to purchase 23,809,524 shares of stock. the Company allocated the proceeds between debt and warrants on a relative fair value basis, recording a debt discount of approximately $0.5 million. As of June 30, 2019, the warrants have not been exercised and the term loan is still outstanding. As disclosed in Note 5, the Company issued warrants to purchase an aggregate of 50 million shares of common stock at an exercise price of $0.04 per share in conjunction with the issuance of the Convertible Debentures. Such warrants expire on the fifth anniversary of issuance. The fair value of the warrants was determined utilizing a Geometric Brownian Motion Stock Path Based Monte Carlo Simulation. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 8 – STOCK-BASED COMPENSATION On January 1, 2017, 33.5 million stock options, with an exercise price of $0.0278 per share, were granted to 6 employees and 2 directors of the Company. The CEO was not included in the award. The stock options vested 50% on January 1, 2017, and 50% on January 1, 2018. The stock options are exercisable for seven years from the original grant date of January 1, 2017, until January 1, 2024. On May 1, 2018, 500,000 stock options, with an exercise price of $0.065 per share were granted to an employee. The stock options vested on the issue date. The stock options are exercisable for approximately 7.5 years from the date of grant of May 1, 2018 to December 31, 2025. On June 1, 2018, 67.5 million stock options, with an exercise price of $0.075 per share were granted to employees, directors and contractors. 18.5 million of the stock options vested on June 1, 2018, 24 million vested on June 1, 2019 and 25 million will vest on June 1, 2020 provided the holder continues to serve as an employee or a director on the vesting date. The stock options are exercisable for approximately 7.5 years from the grant date of June 1, 2018, to December 31, 2025. 49 million of these stock options were awarded from the Company’s 2018 Omnibus Incentive Plan and 18.5 million stock options were inducement awards. On January 2, 2019 the Company issued 1 million stock options to a former employee and contractor. 50% of the stock options vested on the issue date and the remainder will vest in July 2019. The stock options were valued at approximately $35,000 to be recognized over the service period of seven months. The stock options are exercisable until December 31, 2025. The fair value of the stock-options granted during 2018 and 2019 were determined using the Black Scholes valuation model with the following key assumptions: Date of Grant May 1, 2018 June 1, 2018 January 2, 2019 Number of Stock Options Granted 500,000 67,500,000 1,000,000 Stock Price $ 0.065 $ 0.075 $ 0.045 Exercise Price $ 0.065 $ 0.075 $ 0.045 Expected Life of Options 4.25 years 4.25 years 3.75 years Risk Free Rate 2.74 % 2.675 % 2.51 % Volatility 145.21 % 145.21 % 126.37 % The following table summarizes the Company’s stock option activity during the nine months ended June 30, 2019: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (In years) Outstanding at September 30, 2018 103,500,000 $ 0.0605 Granted 1,000,000 0.0450 Exercised — — Cancelled — — Outstanding at June 30, 2019 104,500,000 $ 0.0604 5.82 Vested and expected to vest 104,500,000 $ 0.0604 5.82 Exercisable at June 30, 2019 79,000,000 $ 0.0559 5.82 There was approximately $0.4 million of intrinsic value for the options outstanding as of June 30, 2019. As of June 30, 2019, there was approximately $1.5 million of unrecognized stock-based compensation expense to be recognized over a period of 1 year. Stock-based compensation cost is measured at the grant date, using the estimated fair value of the award, and is recognized over the required vesting period. The Company recognized $415,111 and $1,371,150 in stock based compensation during the three months ended June 30, 2019 and June 30, 2018, respectively. A portion of these costs, $229,255 and $585,858, were capitalized to unproved properties for the three months ended June 30, 2019 and June 30, 2018, respectively, with the remainder recorded as general and administrative expenses for each respective period. The Company recognized $1,217,214 and $1,464,534 in stock based compensation for nine months ended June 30, 2019 and 2018, respectively. A portion of these costs, $659,196 and $613,733, were capitalized to unproved properties for the nine months ended June 30, 2019 and 2018, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 9 – COMMITMENTS AND CONTINGENCIES In July 2018, the Company entered into a thirty-nine month lease for approximately 5,000 square feet of office space. Annual base rent is approximately $94 thousand for the first 18 months, increasing to approximately $97 thousand and $99 thousand, respectively during the remaining term of the lease. The Company reached an agreement with a vendor in August 2018 for the settlement of approximately $1 million in debt. The vendor was paid approximately $0.16 million in cash and 10 million shares of GulfSlope common stock. The agreement contains a provision that upon the sale of the common stock if the original debt is not fully satisfied, full payment will be made under a mutually agreed payment plan. If the stock is sold for a gain any surplus in excess of $1.3 million shall be a credit against future purchases from the vendor. The agreement was determined to meet the definition of a derivative in accordance with ASC 815. At June 30, 2019 there is a derivative financial instrument liability of approximately $0.5 million. In October 2018, the Company purchased a directors and officers’ insurance policy for approximately $160,000 and financed $146,000 of the premium by executing a note payable. The balance of the note payable at June 30, 2019, is approximately $41,000. 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. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 10 – SUBSEQUENT EVENTS Additional insurance proceeds of approximately $2.5 million were received in July and August 2019 for 100% working interest related to the Tau well incident (see Note 3). |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Cash | Cash GulfSlope considers highly liquid investments with original maturities to the Company of three months or less to be cash equivalents. There were no cash equivalents at June 30, 2019 and September 30, 2018. |
Liquidity/Going Concern | Liquidity/Going Concern The Company has incurred accumulated losses as of June 30, 2019 of $54.6 million, has negative working capital of $20.6 million and for the nine months ended June 30, 2019 generated losses of $12.7 million and negative cash flows from operations of $7 million. Further losses are anticipated in developing our business. As a result, there exists substantial doubt about our ability to continue as a going concern. As of June 30, 2019, we had $2.3 million of unrestricted cash on hand, $2.0 million of this amount is for the payment of joint payables from drilling operations. The Company estimates that it will need to raise a minimum of $10.0 million to meet its obligations and planned expenditures through September 2020. The $10 million is comprised primarily of capital project expenditures as well as general and administrative expenses. It does not include any amounts due under outstanding debt obligations, which amounted to $11.6 million of current principal and interest as of June 30, 2019. The Company plans to finance operations and planned expenditures through equity and/or debt financings and/or farm-out agreements. The Company also plans to extend the agreements associated with all loans, the accrued interest payable on these loans, as well as the Company’s accrued liabilities. There are no assurances that financing will be available with acceptable terms, if at all or that obligations can be extended. If the Company is not successful in obtaining financing or extending obligations, operations would need to be curtailed or ceased, or the Company would need to sell assets or consider alternative plans up to and including restructuring. 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 its oil and natural gas exploration and development activities as defined by the 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”), whereby capitalized costs are amortized over total proved reserves. The amortization base in the UOP calculation includes the sum of proved property, net of accumulated depreciation, depletion and amortization (“DD&A”), estimated future development costs (future costs to access and develop proved reserves), and asset retirement costs, less related salvage value. The costs of unproved properties and related capitalized costs (such as G&G costs) are withheld from the amortization calculation until such time as they are either developed or abandoned. Unproved properties and properties under development are reviewed for impairment at least quarterly and are determined through an evaluation 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 cost center ceiling is defined as the sum of (a) estimated future net revenues, discounted at 10% per annum, from proved reserves, (b) the cost of properties not being amortized, if any, and (c) the lower of cost or market value of unproved properties included in the cost being amortized. 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 June 30, 2019, the Company’s oil and gas properties consisted of wells in process, and capitalized exploration and acquisition costs for unproved properties and no proved reserves. |
Derivative Financial Instruments | Derivative Financial Instruments The accounting treatment of derivative financial instruments requires that the Company record certain embedded conversion options at their fair value as of the inception date of the agreement and at fair value as of each subsequent balance sheet date with any change in fair value recorded as income or expense. As a result of entering into certain note agreements, for which such instruments contained a variable conversion feature with no floor, the Company has adopted a sequencing policy in accordance with ASC 815-40-35-12 whereby all future instruments may be classified as a derivative liability with the exception of instruments related to share-based compensation issued to employees or directors, as long as the certain variable convertible instruments exist. |
Basic and Dilutive Earnings Per Share | Basic and Dilutive Earnings Per Share Basic (loss) per share (“EPS”) is computed by dividing net income (loss) (the numerator) by the weighted average number of common shares outstanding for the period (denominator). Diluted EPS is computed by dividing net income (loss) by the weighted average number of common shares and potential common shares outstanding (if dilutive) during each period. Potential common shares include stock options, warrants, and 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 and nine months ended June 30, 2019 and 2018, the potentially dilutive shares are anti-dilutive and are thus not added into the loss per share calculations. As of June 30, 2019 and 2018, there were 357,582,559 and 214,418,438 potentially dilutive shares, respectively. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, “Leases,” and in March 2019, the FASB issued ASU No. 2019-01, “Leases: Codification Improvements”, which updated the accounting guidance related to leases to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. They also clarify implementation issues. These updates are effective for public companies for annual periods beginning after December 15, 2018, including interim periods therein. Accordingly, the standard is effective for the Company for its annual period beginning October 1, 2019, and interim periods therein. The standard is to be applied utilizing a modified retrospective approach, with early adoption permitted. We will adopt these standards on October 1, 2019 with a cumulative adjustment to retained earnings rather than retrospectively adjusting prior periods. This adoption approach will result in a balance sheet presentation that is not comparable to the prior period in the first year of adoption. The Company has yet to begin to assess the quantitative effect of the new standard on the Company’s financial statements and intends to begin the assessment in the upcoming period. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718) |
TERM LOAN AND CONVERTIBLE PRO_2
TERM LOAN AND CONVERTIBLE PROMISSORY NOTES (Tables) | 9 Months Ended |
Jun. 30, 2019 | |
Notes Payable [Abstract] | |
Schedule of fair value of the warrants | The fair value of the embedded conversion feature was determined utilizing a Geometric Brownian Motion Stock Path Based Monte Carlo Simulation that utilized the following key assumptions: June 21, 2019 June 30, 2019 Stock Price $ 0.041 $ 0.041 Fixed Exercise Price $ 0.050 $ 0.050 Volatility 148 % 150 % Term (Years) 1.00 0.98 Risk Free Rate 1.95 % 1.92 % |
Schedule of notes payable | The Company’s term loan and convertible promissory notes consisted of the following as of June 30, 2019. Notes Payable at June 30, 2019 Notes Discount Notes, Net of Discount Term Loan 1,000,000 (283,735) 716,265 Convertible Promissory Notes 2,327,000 (2,242,485) 84,515 Total 3,327,000 (2,526,220) 800,780 |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 9 Months Ended |
Jun. 30, 2019 | |
Fair Value Measurement | |
Schedule of fair value on recurring basis | The following table sets forth by level within the fair value hierarchy the Company’s derivative financial instruments that were accounted for at fair value on a recurring basis as of June 30, 2019: Description Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Total Fair Derivative Financial Instrument at September 30, 2018 $ — $ (271,710 ) $ — $ (271,710 ) Issuance of Derivative Financial Instruments — (3,521,907 ) — (3,521,907 ) Derivative Financial Instrument at June 30, 2019 $ — $ (3,917,008 ) $ — $ (3,917,008 ) |
COMMON STOCK_PAID IN CAPITAL (T
COMMON STOCK/PAID IN CAPITAL (Tables) | 9 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Schedule of fair value of the warrants using the Black Scholes valuation model | The fair value of the warrants were determined using the Black Scholes valuation model with the following key assumptions: Warrants Issue Date June 2016 July 2016 August 2016 November 2016 June 2017 July 2017 August 2017 January 2018 Warrants Outstanding 7.6 10.0 3.3 1.7 1.9 2.5 1.25 2.3 Stock Price (1) $ 0.054 $ 0.040 $ 0.032 $ 0.029 $ 0.025 $ 0.019 $ 0.016 $ 0.11 Exercise Price $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.10 Term (2) 3 years 3 years 3 years 3 years 2 years 2 years 2 years 1.5 years Risk Free Rate .87 % .80 % .88 % 1.28 % 1.35 % 1.35 % 1.33 % 1.89 % Volatility 135 % 138 % 137 % 131 % 135 % 136 % 135 % 163 % (1) Fair market value on the date of agreement. (2) Average term. The fair value of the warrants was determined using the Black Scholes valuation model with the following key assumptions: December 2018 Number of Warrants Issued 9,662,500 Stock Price $ 0.044 Exercise Price $ 0.09 Term 3 years Risk Free Rate 2.46 % Volatility 149 % |
Schedule of warrants issued in conjunction with convertible notes | The warrants are outstanding at June 30, 2019. Warrants Outstanding Warrants Exercisable Exercise Price Number Outstanding Remaining Contractual Life (Yrs) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.10 550,000 2.50 $ 0.10 550,000 $ 0.10 $ 0.10 1,100,000 2.71 $ 0.10 1,100,000 $ 0.10 $ 0.10 1,100,000 3.30 $ 0.10 1,100,000 $ 0.10 $ 0.10 1,100,000 3.46 $ 0.10 1,100,000 $ 0.10 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of fair value assumptions for stock-options | The fair value of the stock-options granted during 2018 and 2019 were determined using the Black Scholes valuation model with the following key assumptions: Date of Grant May 1, 2018 June 1, 2018 January 2, 2019 Number of Stock Options Granted 500,000 67,500,000 1,000,000 Stock Price $ 0.065 $ 0.075 $ 0.045 Exercise Price $ 0.065 $ 0.075 $ 0.045 Expected Life of Options 4.25 years 4.25 years 3.75 years Risk Free Rate 2.74 % 2.675 % 2.51 % Volatility 145.21 % 145.21 % 126.37 % |
Schedule for summary of stock options activity | The following table summarizes the Company’s stock option activity during the nine months ended June 30, 2019: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (In years) Outstanding at September 30, 2018 103,500,000 $ 0.0605 Granted 1,000,000 0.0450 Exercised — — Cancelled — — Outstanding at June 30, 2019 104,500,000 $ 0.0604 5.82 Vested and expected to vest 104,500,000 $ 0.0604 5.82 Exercisable at June 30, 2019 79,000,000 $ 0.0559 5.82 |
ORGANIZATION AND NATURE OF BU_2
ORGANIZATION AND NATURE OF BUSINESS (Details Narrative) | Jun. 30, 2019Number |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of licensed three-dimensional (3-D) seismic data | 14 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Accounting Policies [Abstract] | ||||||
Unrestricted cash | $ 2,299,930 | $ 4,876,667 | $ 2,299,930 | $ 4,876,667 | $ 5,621,814 | $ 6,426 |
Accumulated losses | (54,574,356) | $ (54,574,356) | $ (41,858,257) | |||
Antidilutive securities excluded from EPS calculation | 357,582,559 | 214,418,438 | ||||
Net Cash (Used In) Provided By Operating Activities | $ (7,017,885) | $ 2,683,315 | ||||
Payment of joint payables from drilling operations | 2,000,000 | |||||
Minimum capital which company estimated to raise to meet its obligations and planned expenditures | 10,000,000 | |||||
Net Loss | (6,878,800) | $ (993,325) | (12,716,099) | $ (2,053,497) | ||
Amount of working capital | (20,600,000) | (20,600,000) | ||||
Short-term debt | $ 11,600,000 | $ 11,600,000 |
OIL AND NATURAL GAS PROPERTIES
OIL AND NATURAL GAS PROPERTIES (Details Narrative) | Mar. 11, 2019 | Jan. 08, 2018USD ($)$ / shares | Feb. 27, 2019 | Jun. 30, 2019USD ($)Number$ / shares | Jun. 30, 2019USD ($)Number$ / shares | Jun. 30, 2019USD ($)ft²Number$ / sharesMMBbls | Jun. 30, 2018USD ($) | Sep. 30, 2018$ / shares |
Number of licensed three-dimensional (3-D) seismic data | Number | 3 | 3 | 3 | |||||
Number of licensed three-dimensional (3-D) seismic data | Number | 14 | 14 | 14 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Impairment of Oil and Natural Gas Properties | $ 4,252,539 | $ 4,252,539 | ||||||
Accounts receivable from operations | 11,552,257 | $ 627,552 | ||||||
Accrued payable | $ 1,238,679 | $ (100,000) | ||||||
Gulf of Mexico Well Tau [Member] | ||||||||
Percent of working interest | 100.00% | 100.00% | ||||||
Percent to fund well costs | 20.00% | |||||||
Percent of budget to fund well costs | 115.00% | |||||||
Estimated insurance claim | $ 10,800,000 | $ 10,800,000 | $ 10,800,000 | |||||
Share of insurance claim (percent) | 12.00% | 12.00% | 12.00% | |||||
Number of well drilled | Number | 2 | 2 | 2 | |||||
Total depth of first drilled well | ft² | 5,765 | |||||||
Total true vertical depth of first drilled well | ft² | 5,670 | |||||||
Depth of second drilled well | ft² | 15,254 | |||||||
Depth of originally permitted second drilled well | ft² | 29,857 | |||||||
Oil equivalent remaining in untested zones | MMBbls | 300 | |||||||
Received insurance claim | $ 2,100,000 | $ 8,300,000 | ||||||
Wells in process | (700,000) | |||||||
Accounts receivable from operations | (200,000) | |||||||
Accrued payable | (1,200,000) | |||||||
Gulf of Mexico Well Tau [Member] | Minimum [Member] | ||||||||
Estimated insurance claim | $ 700,000 | $ 700,000 | $ 700,000 | |||||
Share of insurance claim (percent) | 8.00% | 8.00% | 8.00% | |||||
Gulf of Mexico Well Tau [Member] | Maximum [Member] | ||||||||
Estimated insurance claim | $ 1,200,000 | $ 1,200,000 | $ 1,200,000 | |||||
Share of insurance claim (percent) | 20.00% | 20.00% | 20.00% | |||||
Participation agreement [Member] | ||||||||
Percent of working interest | 20.00% | |||||||
Percent of exploratory costs | 8.00% | |||||||
Participation agreement [Member] | Delek GOM Investments, LLC, [Member] | ||||||||
Percent of working interest | 75.00% | |||||||
Percent of exploratory costs | 90.00% | |||||||
Cash for each prospect exploration plan | $ 1,100,000 | |||||||
Percentage of option to purchase | 5.00% | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||||||
Obligation for each Phase (percent) | 20.00% | 20.00% | ||||||
Common stock preceding under acquisition (percent) | 5.00% | 10.00% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Nov. 15, 2016 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2017 |
Debt face amount | $ 3,327,000 | $ 3,327,000 | ||||
John Seitz, CEO [Member] | Convertible Promissory Notes [Member] | ||||||
Debt face amount | $ 8,675,500 | |||||
Interest rate | 5.00% | |||||
Debt conversion, price per share | $ 0.12 | |||||
Debt maturity date | due on demand | |||||
Amount owed to related party | 8,675,500 | $ 8,675,500 | ||||
Value of stock issued in conversion of notes payable | $ 5,300,000 | |||||
Accrued interest payable | 1,970,032 | 1,970,032 | ||||
Related party [Member] | Promissory Notes [Member] | ||||||
Proceeds from issuance of convertible notes and warrants | $ 50,000 | |||||
Accounting Consulting Service [Member] | ||||||
Accounting consulting services, included in related party payables | $ 14,880 | $ 5,915 | $ 44,640 | $ 17,745 |
TERM LOAN AND CONVERTIBLE PRO_3
TERM LOAN AND CONVERTIBLE PROMISSORY NOTES (Details) | Jun. 30, 2019Number$ / shares | Jun. 21, 2019Number$ / shares | Jun. 01, 2019$ / shares | Jan. 02, 2019$ / shares | May 01, 2018$ / shares |
Stock Price | $ / shares | $ 0.041 | $ 0.041 | $ 0.075 | $ 0.045 | $ 0.065 |
Debt term | 11 months 23 days | 1 year | |||
Fixed Exercise Price [Member] | |||||
Debt, measurement input | 0.050 | 0.050 | |||
Price Volatility [Member] | |||||
Debt, measurement input | 0.0150 | 0.0148 | |||
Risk Free Interest Rate [Member] | |||||
Debt, measurement input | 0.0192 | 0.0195 |
TERM LOAN AND CONVERTIBLE PRO_4
TERM LOAN AND CONVERTIBLE PROMISSORY NOTES (Details 1) | Jun. 30, 2019USD ($) |
Notes | $ 3,327,000 |
Discount | (2,526,220) |
Notes, Net of Discount | 800,780 |
Convertible Promissory Notes [Member] | |
Notes | 1,000,000 |
Discount | (283,735) |
Notes, Net of Discount | 716,265 |
Term Loan [Member] | |
Notes | 2,327,000 |
Discount | (2,242,485) |
Notes, Net of Discount | $ 84,515 |
TERM LOAN AND CONVERTIBLE PRO_5
TERM LOAN AND CONVERTIBLE PROMISSORY NOTES (Details Narrative) | Jun. 21, 2019USD ($) | Apr. 19, 2019USD ($)shares | Mar. 06, 2019USD ($)shares | Mar. 01, 2019USD ($)$ / sharesshares | Jan. 15, 2018$ / sharesshares | Nov. 15, 2016USD ($) | Jun. 30, 2017Number$ / sharesshares | Jun. 30, 2019USD ($)$ / shares | Jun. 30, 2018USD ($) | Nov. 30, 2016USD ($)Number$ / sharesshares | Jun. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2018USD ($) | Sep. 30, 2018USD ($)Number$ / shares |
Common stock par value (in dollars per shares) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||
Amortization of debt discount | $ 249,670 | $ 254,501 | |||||||||||
Interest expense | $ 2,080,620 | $ 207,335 | 2,284,928 | 659,901 | |||||||||
Loss on Debt Extinguishment | (5,099,340) | (217,141) | |||||||||||
Principal amount | 3,327,000 | $ 3,327,000 | |||||||||||
Proceeds from issuance | 259,000 | ||||||||||||
Percentage of variable conversion price | 80.00% | ||||||||||||
One day charge on interest expense | $ 1,700,000 | ||||||||||||
Bridge Note Warrant Extensions | 152,078 | $ 152,078 | |||||||||||
Term Loan Agreement [Member] | Delek GOM Investments, LLC, [Member] | |||||||||||||
Number of warrants issued | shares | 238,095,238 | 238,095,238 | |||||||||||
Common stock par value (in dollars per shares) | $ / shares | $ 0.001 | ||||||||||||
Warrant exercise price | $ / shares | $ 0.042 | ||||||||||||
Debt discount | $ 5,100,000 | ||||||||||||
Loss on Debt Extinguishment | 5,100,000 | ||||||||||||
Principal amount | $ 10,000,000 | $ 11,000,000 | |||||||||||
Interest rate | 5.00% | ||||||||||||
Default interest rate | 7.00% | ||||||||||||
Proceeds from issuance | $ 500,000 | ||||||||||||
Term Loan Agreement [Member] | Delek GOM Investments, LLC, [Member] | Minimum [Member] | |||||||||||||
Outstanding debt amount | 100,000 | ||||||||||||
Term Loan Agreement [Member] | Delek GOM Investments, LLC, [Member] | Maximum [Member] | |||||||||||||
Outstanding debt amount | $ 500,000 | ||||||||||||
Term Loan Facility [Member] | Delek GOM Investments, LLC, [Member] | |||||||||||||
Debt discount | $ 500,000 | ||||||||||||
Principal amount | $ 1,000,000 | ||||||||||||
Warrants [Member] | Term Loan Facility [Member] | Delek GOM Investments, LLC, [Member] | |||||||||||||
Number of warrants issued | shares | 23,809,524 | ||||||||||||
Debt discount | $ 500,000 | $ 500,000 | |||||||||||
Bridge Financing Notes [Member] | |||||||||||||
Proceeds from issuance of convertible notes | $ 837,000 | ||||||||||||
Number of convertible promissory notes issued | Number | 11 | ||||||||||||
Maturity term | 1 year | ||||||||||||
Interest rate | 8.00% | ||||||||||||
Conversion price | $ / shares | $ 0.025 | ||||||||||||
Qualified equity financing amount | $ 3,000,000 | ||||||||||||
Bridge Note Warrant Extensions | $ 152,000 | ||||||||||||
Bridge Financing Notes [Member] | June 2017 Warrants [Member] | |||||||||||||
Number of convertible promissory notes issued | Number | 8 | ||||||||||||
Number of warrants issued | shares | 7,000,000 | ||||||||||||
Warrant exercise price | $ / shares | $ 0.03 | ||||||||||||
Percentage of original warrants issued | 25.00% | ||||||||||||
Bridge Financing Notes [Member] | Warrants [Member] | |||||||||||||
Number of warrants issued | shares | 2,800,000 | 27,900,000 | |||||||||||
Warrant exercise price | $ / shares | $ 0.10 | $ 0.03 | |||||||||||
Warrant term | 3 years | ||||||||||||
Percentage of original warrants issued | 10.00% | ||||||||||||
Bridge Financing Notes [Member] | January 15, 2019 Warrants [Member] | |||||||||||||
Number of convertible promissory notes issued | Number | 6 | ||||||||||||
Debt amount converted | 277,000 | $ 560,000 | |||||||||||
Accrued interest amount converted | 6,000 | $ 87,000 | |||||||||||
Cumulative accrued interest | $ 66,000 | ||||||||||||
Bridge Financing Notes [Member] | Related Parties [Member] | |||||||||||||
Proceeds from issuance of convertible notes | $ 222,000 | ||||||||||||
Extinguishment of related party payables | $ 70,000 | ||||||||||||
Promissory Notes [Member] | Related party [Member] | |||||||||||||
Proceeds from issuance of convertible notes | $ 50,000 | ||||||||||||
Convertible Debentures [Member] | Securities Purchase Agreement [Member] | |||||||||||||
Proceeds from issuance of convertible notes | $ 2,100,000 | ||||||||||||
Interest rate | 8.00% | ||||||||||||
Principal amount | $ 3,000,000 | ||||||||||||
Convertible Debentures [Member] | Warrants [Member] | Securities Purchase Agreement [Member] | |||||||||||||
Number of warrants issued | shares | 50,000,000 | ||||||||||||
Warrant exercise price | $ / shares | $ 0.04 | $ 0.04 | |||||||||||
Offering costs related to this issuance | $ 281,000 |
FAIR VALUE MEASUREMENT (Details
FAIR VALUE MEASUREMENT (Details) - Recurring [Member] - USD ($) | 3 Months Ended | |
Jun. 30, 2019 | Sep. 30, 2018 | |
Derivative Financial Instrument, beginning | $ (3,917,008) | $ (271,710) |
Issuance of Derivative Financial Instruments | (3,521,907) | |
Significant Other Observable Inputs (Level 2) [Member] | ||
Derivative Financial Instrument, beginning | (3,917,008) | $ (271,710) |
Issuance of Derivative Financial Instruments | $ (3,521,907) |
FAIR VALUE MEASUREMENT (Detai_2
FAIR VALUE MEASUREMENT (Details Narrative) | 3 Months Ended | 9 Months Ended |
Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($) | |
Fair Value Disclosures [Abstract] | ||
Impairment of Oil and Natural Gas Properties | $ 4,252,539 | $ 4,252,539 |
Fair value of oil and gas properties | $ 0 | $ 0 |
COMMON STOCK_PAID IN CAPITAL (D
COMMON STOCK/PAID IN CAPITAL (Details) | Jun. 30, 2019Numbershares | |
June 2016 Warrants [Member] | ||
Warrants issued | shares | 7,600,000 | |
June 2016 Warrants [Member] | Share Price [Member] | ||
Measurement Input | 0.054 | [1] |
June 2016 Warrants [Member] | Exercise Price [Member] | ||
Measurement Input | 0.03 | |
June 2016 Warrants [Member] | Risk Free Interest Rate [Member] | ||
Measurement Input | 0.87 | |
June 2016 Warrants [Member] | Expected Term [Member] | ||
Measurement Input | 3 | [2] |
June 2016 Warrants [Member] | Volatility [Member] | ||
Measurement Input | 135 | |
July 2016 Warrants [Member] | ||
Warrants issued | shares | 10,000,000 | |
July 2016 Warrants [Member] | Share Price [Member] | ||
Measurement Input | 0.040 | [1] |
July 2016 Warrants [Member] | Exercise Price [Member] | ||
Measurement Input | 0.03 | |
July 2016 Warrants [Member] | Risk Free Interest Rate [Member] | ||
Measurement Input | 0.80 | |
July 2016 Warrants [Member] | Expected Term [Member] | ||
Measurement Input | 3 | [2] |
July 2016 Warrants [Member] | Volatility [Member] | ||
Measurement Input | 138 | |
November 2016 Warrants [Member] | ||
Warrants issued | shares | 1,700,000 | |
November 2016 Warrants [Member] | Share Price [Member] | ||
Measurement Input | 0.029 | [1] |
November 2016 Warrants [Member] | Exercise Price [Member] | ||
Measurement Input | 0.03 | |
November 2016 Warrants [Member] | Risk Free Interest Rate [Member] | ||
Measurement Input | 1.28 | |
November 2016 Warrants [Member] | Expected Term [Member] | ||
Measurement Input | 3 | [2] |
November 2016 Warrants [Member] | Volatility [Member] | ||
Measurement Input | 131 | |
August 2016 Warrants [Member] | ||
Warrants issued | shares | 3,300,000 | |
August 2016 Warrants [Member] | Share Price [Member] | ||
Measurement Input | 0.032 | [1] |
August 2016 Warrants [Member] | Exercise Price [Member] | ||
Measurement Input | 0.03 | |
August 2016 Warrants [Member] | Risk Free Interest Rate [Member] | ||
Measurement Input | 0.88 | |
August 2016 Warrants [Member] | Expected Term [Member] | ||
Measurement Input | 3 | [2] |
August 2016 Warrants [Member] | Volatility [Member] | ||
Measurement Input | 137 | |
June 2017 Warrants [Member] | ||
Warrants issued | shares | 1,900,000 | |
June 2017 Warrants [Member] | Share Price [Member] | ||
Measurement Input | 0.025 | [1] |
June 2017 Warrants [Member] | Exercise Price [Member] | ||
Measurement Input | 0.03 | |
June 2017 Warrants [Member] | Risk Free Interest Rate [Member] | ||
Measurement Input | 1.35 | |
June 2017 Warrants [Member] | Expected Term [Member] | ||
Measurement Input | 2 | [2] |
June 2017 Warrants [Member] | Volatility [Member] | ||
Measurement Input | 135 | |
July 2017 Warrants [Member] | ||
Warrants issued | shares | 2,500,000 | |
July 2017 Warrants [Member] | Share Price [Member] | ||
Measurement Input | 0.019 | [1] |
July 2017 Warrants [Member] | Exercise Price [Member] | ||
Measurement Input | 0.03 | |
July 2017 Warrants [Member] | Risk Free Interest Rate [Member] | ||
Measurement Input | 1.35 | |
July 2017 Warrants [Member] | Expected Term [Member] | ||
Measurement Input | 2 | [2] |
July 2017 Warrants [Member] | Volatility [Member] | ||
Measurement Input | 136 | |
August 2017 Warrants [Member] | ||
Warrants issued | shares | 1,250,000 | |
August 2017 Warrants [Member] | Share Price [Member] | ||
Measurement Input | 0.016 | [1] |
August 2017 Warrants [Member] | Exercise Price [Member] | ||
Measurement Input | 0.03 | |
August 2017 Warrants [Member] | Risk Free Interest Rate [Member] | ||
Measurement Input | 1.33 | |
August 2017 Warrants [Member] | Expected Term [Member] | ||
Measurement Input | 2 | [2] |
August 2017 Warrants [Member] | Volatility [Member] | ||
Measurement Input | 135 | |
January 2018 Warrants [Member] | ||
Warrants issued | shares | 2,300,000 | |
January 2018 Warrants [Member] | Share Price [Member] | ||
Measurement Input | 0.11 | [1] |
January 2018 Warrants [Member] | Exercise Price [Member] | ||
Measurement Input | 0.10 | |
January 2018 Warrants [Member] | Risk Free Interest Rate [Member] | ||
Measurement Input | 1.89 | |
January 2018 Warrants [Member] | Expected Term [Member] | ||
Measurement Input | 1.5 | |
January 2018 Warrants [Member] | Volatility [Member] | ||
Measurement Input | 163 | |
[1] | Fair market value on the date of agreement. | |
[2] | Average term. |
COMMON STOCK_PAID IN CAPITAL _2
COMMON STOCK/PAID IN CAPITAL (Details 1) | 9 Months Ended |
Jun. 30, 2019USD ($)$ / sharesshares | |
Financing Note Warrants #1 [Member] | |
Number of warrants - outstanding | $ | $ 550,000 |
Number of exercise price | $ 0.10 |
Weighted Average Remaining Contractual Life (Yrs) | 2 years 6 months |
Weighted Average Exercise Price - outstanding | $ 0.10 |
Number of warrants - exercisable | shares | 550,000 |
Weighted Average Exercise Price- exercisable | $ 0.10 |
Financing Note Warrants #2 [Member] | |
Number of warrants - outstanding | $ | $ 1,100,000 |
Number of exercise price | $ 0.10 |
Weighted Average Remaining Contractual Life (Yrs) | 2 years 8 months 16 days |
Weighted Average Exercise Price - outstanding | $ 0.10 |
Number of warrants - exercisable | shares | 1,100,000 |
Weighted Average Exercise Price- exercisable | $ 0.10 |
Financing Note Warrants #3 [Member] | |
Number of warrants - outstanding | $ | $ 1,100,000 |
Number of exercise price | $ 0.10 |
Weighted Average Remaining Contractual Life (Yrs) | 3 years 3 months 18 days |
Weighted Average Exercise Price - outstanding | $ 0.10 |
Number of warrants - exercisable | shares | 1,100,000 |
Weighted Average Exercise Price- exercisable | $ 0.10 |
Financing Note Warrants #4 [Member] | |
Number of warrants - outstanding | $ | $ 1,100,000 |
Number of exercise price | $ 0.10 |
Weighted Average Remaining Contractual Life (Yrs) | 3 years 5 months 16 days |
Weighted Average Exercise Price - outstanding | $ 0.10 |
Number of warrants - exercisable | shares | 1,100,000 |
Weighted Average Exercise Price- exercisable | $ 0.10 |
COMMON STOCK_PAID IN CAPITAL _3
COMMON STOCK/PAID IN CAPITAL (Details 2) - Warrants [Member] | Dec. 31, 2018Numbershares |
Warrants issued | shares | 9,662,500 |
Warrant term | 3 years |
Share Price [Member] | |
Measurement Input | .044 |
Fixed Exercise Price [Member] | |
Measurement Input | .09 |
Risk Free Interest Rate [Member] | |
Measurement Input | .0246 |
Price Volatility [Member] | |
Measurement Input | 1.49 |
COMMON STOCK_PAID IN CAPITAL _4
COMMON STOCK/PAID IN CAPITAL (Details Narrative) - USD ($) | Apr. 19, 2019 | Jan. 02, 2019 | Jun. 01, 2018 | May 01, 2018 | Jun. 30, 2019 | Nov. 30, 2016 | Mar. 06, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 21, 2019 | Sep. 30, 2018 |
Term | 3 years 9 months | 4 years 3 months | 4 years 3 months | ||||||||||
Common stock, authorized | 1,500,000,000 | 1,500,000,000 | 1,500,000,000 | 1,500,000,000 | |||||||||
Preferred stock, authorized | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | |||||||||
Peoceeds from share issue | $ 259,000 | ||||||||||||
Proceeds from warrants issue | 259,000 | ||||||||||||
Debt discount | $ 249,670 | $ 254,501 | |||||||||||
Loss on Debt Extinguishment | (5,099,340) | (217,141) | |||||||||||
Principal amount | $ 3,327,000 | $ 3,327,000 | $ 3,327,000 | ||||||||||
Term Loan Facility [Member] | Delek GOM Investments, LLC, [Member] | |||||||||||||
Principal amount | $ 1,000,000 | ||||||||||||
Unamortized debt discount | $ 500,000 | ||||||||||||
Delek GOM [Member] | |||||||||||||
Number of warrants issued | 238,000,000 | ||||||||||||
Fair value of warrants | $ 10,000,000 | ||||||||||||
Convertible Debentures [Member] | Securities Purchase Agreement [Member] | |||||||||||||
Principal amount | $ 3,000,000 | ||||||||||||
Warrants [Member] | |||||||||||||
Number of warrants issued | 27,900,000 | ||||||||||||
Term | 3 years | ||||||||||||
Warrant exercise price | $ 0.03 | ||||||||||||
Fair value of warrants | $ 452,422 | ||||||||||||
Warrants [Member] | Term Loan Facility [Member] | Delek GOM Investments, LLC, [Member] | |||||||||||||
Number of warrants issued | 23,809,524 | ||||||||||||
Unamortized debt discount | $ 500,000 | $ 500,000 | |||||||||||
Warrants [Member] | Delek GOM [Member] | |||||||||||||
Debt discount | 5,000,000 | ||||||||||||
Loss on Debt Extinguishment | $ 5,100,000 | ||||||||||||
Warrants [Member] | Convertible Debentures [Member] | Securities Purchase Agreement [Member] | |||||||||||||
Number of warrants issued | 50,000,000 | ||||||||||||
Warrant exercise price | $ 0.04 | $ 0.04 | $ 0.04 | ||||||||||
Private Placement [Member] | |||||||||||||
Common stock, authorized | 19,300,000 | 19,300,000 | 19,300,000 | ||||||||||
Private Placement [Member] | April 2016 Promissory Notes [Member] | |||||||||||||
Warrant exercise price | $ 0.10 | $ 0.10 | $ 0.10 | ||||||||||
Private Placement [Member] | Warrants [Member] | |||||||||||||
Common stock, authorized | 9,700,000 | 9,700,000 | 9,700,000 | ||||||||||
Private Placement [Member] | Warrants [Member] | April 2016 Promissory Notes [Member] | |||||||||||||
Term | 3 years | ||||||||||||
Number of warrants exercised | 3,300,000 | ||||||||||||
Number of warrant expired | 4,000,000 | ||||||||||||
Number of warrant outstanding | 30,500,000 | 30,500,000 | 30,500,000 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - $ / shares | Jan. 02, 2019 | Jun. 01, 2018 | May 01, 2018 | Jun. 30, 2019 | Jun. 21, 2019 | Jun. 01, 2019 |
Stock-based Compensation | ||||||
Number of Stock Options Granted | 1,000,000 | 67,500,000 | 500,000 | 1,000,000 | ||
Stock Price | $ 0.045 | $ 0.065 | $ 0.041 | $ 0.041 | $ 0.075 | |
Exercise Price | $ 0.045 | $ 0.065 | $ 0.075 | |||
Expected Life of Options | 3 years 9 months | 4 years 3 months | 4 years 3 months | |||
Risk Free Rate | 2.51% | 2.675% | 2.74% | |||
Volatility | 126.37% | 145.21% | 145.21% |
STOCK-BASED COMPENSATION (Det_2
STOCK-BASED COMPENSATION (Details 1) - $ / shares | Jan. 02, 2019 | Jun. 01, 2018 | May 01, 2018 | Jun. 30, 2019 |
Number of Options | ||||
Outstanding at beginning of period | 103,500,000 | |||
Granted | 1,000,000 | 67,500,000 | 500,000 | 1,000,000 |
Outstanding at end of period | 104,500,000 | |||
Vested and expected to vest | 104,500,000 | |||
Exercisable at end of period | 79,000,000 | |||
Weighted Average Exercise Price | ||||
Outstanding at beginning of period | $ 0.0605 | |||
Granted | 0.0450 | |||
Outstanding at end of period | 0.0604 | |||
Vested and expected to vest | 0.0604 | |||
Exercisable at end of period | $ 0.0559 | |||
Weighted Average Remaining Contractual Term | ||||
Outstanding at end of period | 5 years 9 months 25 days | |||
Vested and expected to vest | 5 years 9 months 25 days | |||
Exercisable at end of period | 5 years 9 months 25 days |
STOCK-BASED COMPENSATION (Det_3
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | Jun. 01, 2020 | Jun. 01, 2019 | Jan. 02, 2019 | Jun. 01, 2018 | May 01, 2018 | Jan. 02, 2018 | Jan. 01, 2017 | Jun. 01, 2018 | May 01, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2025 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Stock-based compensation expense | $ 415,111 | $ 1,371,150 | $ 1,217,214 | $ 1,464,534 | ||||||||||
Stock-based compensation capitalized to unproved properties | 229,255 | $ 585,858 | 659,196 | $ 613,733 | ||||||||||
Unrecognized compensation expense related to stock options | $ 1,500,000 | $ 1,500,000 | ||||||||||||
Number of stock options granted | 1,000,000 | 67,500,000 | 500,000 | 1,000,000 | ||||||||||
Fair value of stock options granted | $ 35,000 | |||||||||||||
Expected life of options | 1 year | |||||||||||||
Exercise price (in dollars per share) | $ 0.075 | $ 0.045 | $ 0.065 | $ 0.065 | ||||||||||
Exercisable year | 3 years 9 months | 4 years 3 months | 4 years 3 months | |||||||||||
Share-based Compensation Award, Tranche January 1, 2017 [Member] | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Stock option of vested, percentage | 50.00% | 50.00% | 50.00% | |||||||||||
Employee Stock Option [Member] | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Number of stock options granted | 1,000,000 | 33,500,000 | 33,500,000 | 500,000 | ||||||||||
Exercise price (in dollars per share) | $ 0.065 | $ 0.065 | $ .0278 | $ 0.065 | $ 0.065 | |||||||||
Employee Stock Option [Member] | Subsequent Event [Member] | 2018 Omnibus Incentive Plan [Member] | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Number of stock options granted | 49,000,000 | |||||||||||||
Employee Stock Option [Member] | Subsequent Event [Member] | Inducement Awards [Member] | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Number of stock options granted | 18,500,000 | |||||||||||||
Employee Stock Option [Member] | Employees, Directors and Contractors [Member] | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Number of stock options granted | 67,500,000 | |||||||||||||
Fair value of stock option of vested | $ 24,000,000 | $ 18,500,000 | ||||||||||||
Exercise price (in dollars per share) | $ 0.075 | $ 0.075 | ||||||||||||
Employee Stock Option [Member] | Employees, Directors and Contractors [Member] | Subsequent Event [Member] | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Fair value of stock option of vested | $ 25,000,000 | |||||||||||||
Exercisable year | 7 years 6 months |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) | Oct. 31, 2018USD ($) | Aug. 31, 2018USD ($) | Jul. 31, 2018USD ($)ft² | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($) |
Lease term | 39 months | ||||
Office space | ft² | 5,000 | ||||
Annual base rent for the first 18 months | $ 94,000 | ||||
Annual base rent - Year two | $ 97,000 | ||||
Annual base rent - Year two | 99,000 | ||||
Principal amount | 3,327,000 | ||||
Common stock issued to vendor for settlement of debt | $ 87,000 | ||||
Fair value liability | 500,000 | ||||
Directors and Officers [Member] | Note Payable [Member] | |||||
Insurance policy | $ 160,000 | ||||
Insurance policy premium | $ 146,000 | ||||
Balance amount of debt | $ 41,000 | ||||
Vendor [Member] | |||||
Principal amount | $ 1,000,000 | ||||
Repayment of debt | 160,000 | ||||
Common stock issued to vendor for settlement of debt | 10,000,000 | ||||
Vendor [Member] | Minimum [Member] | |||||
Gain on sale of stock by vendor in excess of | $ 1,300,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Gulf of Mexico Well Tau [Member] - USD ($) | 1 Months Ended | 6 Months Ended | 9 Months Ended |
Aug. 14, 2019 | Jun. 30, 2019 | Jun. 30, 2019 | |
Proceeds from insurance | $ 2,100,000 | $ 8,300,000 | |
Subsequent Event [Member] | |||
Proceeds from insurance | $ 2,500,000 | ||
Working interest insurance | 100.00% |