SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jul. 31, 2013 |
SIGNIFICANT ACCOUNTING POLICIES | ' |
Basis of Presentation | ' |
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a) Basis of Presentation |
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These financial statements and related notes are presented in accordance |
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with accounting principles generally accepted in the United States, and are |
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expressed in US dollars. The Company's fiscal year-end is January 31. |
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Use of Estimates | ' |
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b) Use of Estimates |
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The preparation of financial statements in conformity with generally |
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accepted accounting principles in the United States and requires management |
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to make estimates and assumptions that affect the reported amounts of |
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assets and liabilities and disclosure of contingent assets and liabilities |
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at the date of the financial statements and the reported amounts of |
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revenues and expenses during the reporting period. The Company regularly |
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evaluates estimates and assumptions related to valuation and impairment of |
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oil and gas properties, asset retirement obligations, fair value of |
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share-based payments, and deferred income tax asset valuation allowances. |
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The Company bases its estimates and assumptions on current facts, |
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historical experience and various other factors that it believes to be |
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reasonable under the circumstances, the results of which form the basis for |
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making judgments about the carrying values of assets and liabilities and |
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the accrual of costs and expenses that are not readily apparent from other |
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sources. The actual results experienced by the Company may differ |
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materially and adversely from the Company's estimates. To the extent there |
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are material differences between the estimates and the actual results, |
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future results of operations will be affected. |
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Interim Financial Statements | ' |
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c) Interim Financial Statements |
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These interim unaudited financial statements have been prepared on the same |
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basis as the annual financial statements and in the opinion of management, |
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reflect all adjustments, which include only normal recurring adjustments, |
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necessary to present fairly the Company's financial position, results of |
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operations and cash flows for the periods shown. The results of operations |
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for such periods are not necessarily indicative of the results expected for |
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a full year or for any future period. |
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Basic and Diluted Net Loss Per Share Policy | ' |
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d) Basic and Diluted Net Loss Per Share |
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The Company computes net loss per share in accordance with ASC 260, |
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EARNINGS PER SHARE, which requires presentation of both basic and diluted |
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earnings per share (EPS) on the face of the income statement. Basic EPS is |
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computed by dividing net loss available to common shareholders (numerator) |
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by the weighted average number of shares outstanding (denominator) during |
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the period. Diluted EPS gives effect to all dilutive potential common |
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shares outstanding during the period using the treasury stock method and |
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convertible preferred stock using the if-converted method. In computing |
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Diluted EPS, the average stock price for the period is used in determining |
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the number of shares assumed to be purchased from the exercise of stock |
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options or warrants. Diluted EPS excludes all dilutive potential shares if |
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their effect is anti-dilutive. As of July 31, 2013 and January 31, 2013, |
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the Company had 4,600,000 (2012 - nil) potentially dilutive shares. |
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Oil and Gas Property Costs Policy | ' |
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e) Oil and Gas Property Costs |
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The Company utilizes the full-cost method of accounting for petroleum and |
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natural gas properties. Under this method, the Company capitalizes all |
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costs associated with acquisition, exploration, and development of oil and |
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natural gas reserves, including leasehold acquisition costs, geological and |
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geophysical expenditures, lease rentals on undeveloped properties and costs |
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of drilling of productive and non-productive wells into the full cost pool |
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on a country-by-country basis. When the Company obtains proven oil and gas |
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reserves, capitalized costs, including estimated future costs to develop |
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the reserves proved and estimated abandonment costs, net of salvage, will |
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be depleted on the units-of-production method using estimates of proved |
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reserves. The costs of unproved properties are not amortized until it is |
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determined whether or not proved reserves can be assigned to the |
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properties. Until such determination is made, the Company assesses annually |
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whether impairment has occurred, and includes in the amortization base |
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drilling exploratory dry holes associated with unproved properties. |
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The Company applies a ceiling test to the capitalized cost in the full cost |
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pool. The ceiling test limits such cost to the estimated present value, |
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using a ten percent discount rate, of the future net revenue from proved |
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reserves based on current economic and operating conditions. Specifically, |
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the Company computes the ceiling test so that capitalized cost, less |
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accumulated depletion and related deferred income tax, do not exceed an |
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amount (the ceiling) equal to the sum of: The present value of estimated |
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future net revenue computed by applying current prices of oil and gas |
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reserves (with consideration of price changes only to the extent provided |
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by contractual arrangements) to estimated future production of proved oil |
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and gas reserves as of the date of the latest balance sheet presented, less |
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estimated future expenditures (based on current cost) to be incurred in |
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developing and producing the proved reserves computed using a discount |
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factor of ten percent and assuming continuation of existing economic |
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conditions; plus the cost of property not being amortized; plus the lower |
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of cost or estimated fair value of unproven properties included in the |
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costs being amortized; less income tax effects related to differences |
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between the book and tax basis of the property. For unproven properties, |
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the Company excludes from capitalized costs subject to depletion, all costs |
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directly associated with the acquisition and evaluation of the unproved |
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property until it is determined whether or not proved reserves can be |
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assigned to the property. Until such a determination is made, the Company |
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assesses the property at least annually to ascertain whether impairment has |
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occurred. In assessing impairment the Company considers factors such as |
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historical experience and other data such as primary lease terms of the |
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property, average holding periods of unproved property, and geographic and |
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geologic data. The Company adds the amount of impairment assessed to the |
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cost to be amortized subject to the ceiling test. |
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Financial Instruments | ' |
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f) Financial Instruments |
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Pursuant to ASC 820, FAIR VALUE MEASUREMENTS AND DISCLOSURES, an entity is |
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required to maximize the use of observable inputs and minimize the use of |
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unobservable inputs when measuring fair value. ASC 820 establishes a fair |
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value hierarchy based on the level of independent, objective evidence |
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surrounding the inputs used to measure fair value. A financial instrument's |
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categorization within the fair value hierarchy is based upon the lowest |
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level of input that is significant to the fair value measurement. ASC 820 |
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prioritizes the inputs into three levels that may be used to measure fair |
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value: |
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LEVEL 1 |
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Level 1 applies to assets or liabilities for which there are quoted prices |
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in active markets for identical assets or liabilities. |
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LEVEL 2 |
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Level 2 applies to assets or liabilities for which there are inputs other |
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than quoted prices that are observable for the asset or liability such as |
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quoted prices for similar assets or liabilities in active markets; quoted |
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prices for identical assets or liabilities in markets with insufficient |
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volume or infrequent transactions (less active markets); or model-derived |
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valuations in which significant inputs are observable or can be derived |
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principally from, or corroborated by, observable market data. |
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LEVEL 3 |
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Level 3 applies to assets or liabilities for which there are unobservable |
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inputs to the valuation methodology that are significant to the measurement |
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of the fair value of the assets or liabilities. |
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The Company's financial instruments consist principally of cash, accounts |
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payable and accrued liabilities, and amounts due to related parties. |
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Pursuant to ASC 820 and 825, the fair value of our cash is determined based |
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on "Level 1" inputs, which consist of quoted prices in active markets for |
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identical assets. We believe that the recorded values of all of our other |
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financial instruments approximate their current fair values because of |
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their nature and respective maturity dates or durations. |
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Recent Accounting Pronouncements | ' |
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g) Recent Accounting Pronouncements |
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The Company has implemented all new accounting pronouncements that are in |
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effect and that may impact its financial statements and does not believe |
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that there are any other new accounting pronouncements that have been |
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issued that might have a material impact on its consolidated financial |
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statements. |
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