Eflo Energy (EFLO) Inactive 10-K1 Dec 142014 FY Annual reportFinancial data

Company Profile

Document_and_Entity_Informatio

Document and Entity Information (USD $)	12 Months Ended
Document and Entity Information (USD $)	Aug. 31, 2014	Nov. 28, 2014	Feb. 28, 2014
DocumentAndEntityInformationAbstract	'	'	'
Entity Registrant Name	'EFLO ENERGY, INC.	'	'
Entity Central Index Key	'0001448806	'	'
Document Type	'10-K	'	'
Document Period End Date	31-Aug-14	'	'
Amendment Flag	'false	'	'
Current Fiscal Year End Date	'--08-31	'	'
Is Entity a Well-known Seasoned Issuer?	'No	'	'
Is Entity a Voluntary Filer?	'No	'	'
Is Entity's Reporting Status Current?	'Yes	'	'
Entity Filer Category	'Smaller Reporting Company	'	'
Entity Public Float	'	'	$10,641,732
Entity Common Stock, Shares Outstanding	'	19,897,714	'
Document Fiscal Period Focus	'FY	'	'
Document Fiscal Year Focus	'2014	'	'

CONSOLIDATED_BALANCE_SHEETS_Un

CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $)	Aug. 31, 2014	Aug. 31, 2013
ASSETS	'	'
Cash	$650,599	$476,522
Accounts receivable from joint interest owners and other	1,589,898	912,458
Prepaids	47,864	41,565
Other	30,182	19,429
Total current assets	2,318,543	1,449,974
OIL AND GAS PROPERTIES, full cost method, unproven	50,305,989	48,897,972
OTHER ASSETS-Goodwill	1,194,365	1,194,365
Total assets	53,818,897	51,542,311
CURRENT LIABILITIES	'	'
Accounts payable and accrued liabilities	4,250,625	3,117,627
Convertible notes, net of $233,964 of unamortized discount at August 31, 2014	3,396,036	0
Asset retirement obligation-current	80,000	80,000
Total current liabilities	7,726,661	3,197,627
NON-CURRENT LIABILITIES	'	'
Asset retirement obligations	17,759,023	17,066,750
Deferred income taxes	3,297,434	2,779,849
Total liabilities	28,783,118	23,044,226
STOCKHOLDERS' EQUITY	'	'
Capital Stock Authorized: 10,000,000 preferred shares, par value $0.001 per share 150,000,000 common shares, par value $0.001 per share Issued and outstanding: 19,897,714 and 19,487,739 common shares at August 31, 2014 and August 31, 2013, respectively	19,898	19,488
Additional paid-in capital	30,493,045	29,153,194
Accumulated other comprehensive loss	-90,423	-43,488
Accumulated deficit during the exploration stage	-5,386,741	-631,109
Total stockholders' equity	25,035,779	28,498,085
Total liabilities and stockholders' equity	$53,818,897	$51,542,311

CONSOLIDATED_BALANCE_SHEETS_Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Aug. 31, 2014	Aug. 31, 2013
Statement of Financial Position [Abstract]	'	'
Unamortized Discount	$233,964	$0
Stockholders Equity	'	'
Preferred Stock Shares Par value	$0.00	$0.00
Preferred Stock Shares Authorized	10,000,000	10,000,000
Common Stock Shares Par value	$0.00	$0.00
Common Stock Shares Authorized	150,000,000	150,000,000
Common Stock Shares Issued	19,897,714	19,487,739
Common Stock Shares Outstanding	19,897,714	19,487,739

CONDENSED_CONSOLIDATED_STATEME

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $)	12 Months Ended		73 Months Ended
	Aug. 31, 2014	Aug. 31, 2013	Aug. 31, 2014
EXPENSES	'	'	'
Management and director's fees	$876,953	$1,193,410	$3,266,746
Stock-based compensation expense	409,563	1,282,384	2,481,224
Consulting fees	417,173	1,081,442	2,375,593
Professional fees	692,471	629,666	1,702,381
Financing fees	176,400	0	176,400
Office, travel and general	352,532	453,138	1,122,280
Accretion of asset retirement obligations	692,273	572,508	1,264,781
Oil and gas property impairment	0	0	879,994
Total Expenses	3,617,365	5,212,548	13,269,399
OPERATING LOSS	-3,617,365	-5,212,548	-13,269,399
OTHER INCOME (EXPENSE)	'	'	'
Interest expense	-620,682	0	-620,682
Gain on acquisition of assets	0	11,766,787	11,766,787
Gain on forgiveness of accounts payable	0	27,987	33,987
NET INCOME (LOSS) before taxes	-4,238,047	6,582,226	-2,089,307
Provision for income tax	-517,585	-2,779,849	-3,297,434
NET INCOME (LOSS)	-4,755,632	3,802,377	-5,386,741
Foreign currency translation	-46,935	-40,529	-90,423
COMPREHENSIVE INCOME (LOSS)	($4,802,567)	$3,761,848	($5,477,164)
EARNING (LOSS) PER SHARE	'	'	'
Basic	($0.24)	$0.20	'
Diluted	($0.24)	$0.19	'
WEIGHTED AVERAGE SHARES OUTSTANDING	'	'	'
Basic	19,610,070	18,926,937	'
Diluted	19,610,070	20,338,199	'

CONDENSED_CONSOLIDATED_STATEME1

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	12 Months Ended		73 Months Ended
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	Aug. 31, 2014	Aug. 31, 2013	Aug. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES	'	'	'
Net income (loss)	($4,755,632)	$3,802,377	($5,386,741)
Adjustments to reconcile net income (loss) to net cash used in operating activities:	'	'	'
Stock-based compensation and fee payments	437,107	2,234,104	4,707,019
Amortization of convertible note discount	299,839	0	299,839
Unrealized foreign exchange losses	-46,935	-40,529	-90,423
Gain on forgiveness of accounts payable	0	-27,987	-33,987
Gain on acquisition of Nahanni assets	0	-11,766,787	-11,766,787
Accretion of asset retirement obligations	692,273	572,508	1,264,781
Oil and gas property impairment	0	0	879,994
Deferred income tax provision	517,585	2,779,849	3,297,434
Changes in working capital items-	'	'	'
Accounts receivable	-677,440	-611,488	-1,589,898
Prepaids and other	-17,051	161,817	-78,046
Accounts payable and accrued liabilities	937,141	38,730	1,555,451
Net cash used in operating activities	-2,613,113	-2,857,406	-6,941,363
CASH FLOWS FROM INVESTING ACTIVITIES	'	'	'
Expenditures on oil and gas properties, net	-842,810	-917,631	-2,499,992
Acquisition of oil and gas interests	0	-132,600	-421,895
Net cash used in investing activities	-842,810	-1,050,231	-2,921,887
CASH FLOWS FROM FINANCING ACTIVITIES	'	'	'
Common stock sold for cash, net of fees	0	2,177,812	6,779,612
Common stock redeemend for cash	0	0	-100
Proceeds from notes payable	3,630,000	0	4,184,500
Repayments of notes payable	0	0	-484,500
Loans from related parties	0	0	34,337
Net cash provided by financing activities	3,630,000	2,177,812	10,513,849
INCREASE (DECREASE) IN CASH	174,077	-1,729,825	650,599
CASH, BEGINNING OF PERIOD	476,522	2,206,347	0
CASH, END OF PERIOD	650,599	476,522	650,599
SUPPLEMENTAL DISCLOSURE	'	'	'
Cash paid for interest	0	0	0
Cash paid for income taxes	0	0	0
Forgiveness of debt	0	0	9,337
NON-CASH INVESTING ACTIVITIES:	'	'	'
Accrued expenditures on oil and gas properties	565,207	346,406	565,207
Asset retirment obligation incrurred	0	0	80,000
Asset retirement obligation acquired in Devon acquisition	0	0	7,057,716
Asset retirement obligation acquired in Nahanni acquisition	0	9,436,526	9,436,526
NON-CASH FINANCING ACTIVITIES	'	'	'
Common stock issued on conversion, or as repayment of note payable	25,000	0	120,000
Common stock issued for services	344,350	145,000	2,278,181
Common stock issued for Devon assets	0	0	15,950,000
Exchangeable shares granted for Nahanni assets	$0	$4,190,643	$4,190,643

CONSOLIDATED_STATEMENT_OF_STOC

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) (USD $)	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income / Loss	Deficit Accumulated During Exploration Stage	Total
Beginning Balance, Amount at Aug. 31, 2012	$17,479	$21,830,083	($2,959)	($4,433,486)	$17,411,117
Beginning Balance, Shares at Aug. 31, 2012	17,478,539	'	'	'	'
Common Stock issued for cash, Shares	1,880,666	'	'	'	'
Common Stock issued for cash, Amount	1,881	2,175,931	'	'	2,177,812
Issued for services, Shares	78,534	'	'	'	'
Issued for services, Amount	78	144,922	'	'	145,000
Stock-based compensation granted, Shares	50,000	'	'	'	'
Stock-based compensation granted, Amount	50	811,615	'	'	811,665
Noncontrolling Interest granted - Nahanni Asset Acquisition	'	4,190,643	'	'	4,190,643
Net loss	'	'	'	3,802,377	3,802,377
Loss on foreign currency translation	'	'	-40,529	'	-40,529
Total Comprehensive income	'	'	'	'	3,761,848
Ending Balance, Amount at Aug. 31, 2013	19,488	29,153,194	-43,488	-631,109	28,498,085
Ending Balance, Shares at Aug. 31, 2013	19,487,739	'	'	'	'
Issued for services, Shares	217,037	'	'	'	'
Issued for services, Amount	217	209,783	'	'	210,000
Stock-based compensation granted, Amount	'	437,107	'	'	437,107
Discount on Convertible Notes	'	533,804	'	'	533,804
Conversion of indebtedness to investment units, Shares	167,938	'	'	'	'
Conversion of indebtedness to investment units, Amount	168	134,182	'	0	134,350
Conversion of Convertible Note 2013, Shares	25,000	'	'	'	'
Conversion of Convertible Note 2013, Amount	25	24,975	'	0	25,000
Net loss	'	'	'	-4,755,632	-4,755,632
Loss on foreign currency translation	'	'	-46,935	'	-46,935
Total Comprehensive income	'	'	'	'	-4,802,567
Ending Balance, Amount at Aug. 31, 2014	$19,898	$30,493,045	($90,423)	($5,386,741)	$25,035,779
Ending Balance, Shares at Aug. 31, 2014	19,897,714	'	'	'	'

1_NATURE_AND_CONTINUANCE_OF_OP

1. NATURE AND CONTINUANCE OF OPERATIONS	12 Months Ended
1. NATURE AND CONTINUANCE OF OPERATIONS	Aug. 31, 2014
Accounting Policies [Abstract]	'
1. NATURE AND CONTINUANCE OF OPERATIONS	'
	EFLO Energy, Inc. (the “Company”), was incorporated in the State of Nevada on July 22, 2008, and prior to March 2011, was relatively inactive. During March 2011, the Company initiated operations focused on oil and gas exploration and development in the United States and Canada. During the period from July 18, 2012 through October 17, 2012, the Company acquired working interests totaling 53.65% (including a 100% working interest in one shut in gas well) in the Kotaneelee Gas Project (“KGP”) located on 30,188 gross acres in the Yukon Territory in Canada. (Note 4).

	The Company’s consolidated financial statements are prepared on a going concern basis in accordance with generally accepted accounting principles in the United States (“US GAAP”) which contemplates the realization of assets and discharge of liabilities and commitments in the normal course of business. The Company is in the exploration stage. It has not generated operating revenues, and has accumulated operating losses of $13,269,399 since inception. The Company has funded its operations through the issuance of capital stock and debt. Management plans to raise additional funds through third-party equity or debt financings and the joint venturing of its exploration efforts with third parties. There is no certainty that further funding will be available as needed. These factors raise substantial doubt about the ability of the Company to continue operating as a going concern. The Company’s ability to continue its operations as a going concern, realize the carrying value of its assets, and discharge its liabilities in the normal course of business is dependent upon its ability to raise capital sufficient to fund its commitments and ongoing losses, and ultimately generate profitable operations.

2_SUMMARY_OF_SIGNIFICANT_ACCOU

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Aug. 31, 2014
Accounting Policies [Abstract]	'
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	'
	Basis of Presentation

	These consolidated financial statements include the accounts of the Company and its three wholly owned subsidiaries after elimination of intercompany balances and transactions. The Company’s interest in oil and gas exploration and production ventures and partnerships are proportionately consolidated. These consolidated financial statements and related notes are presented in accordance with US GAAP, and are expressed in United States dollars. The Company is an exploration stage company as defined by “Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 915, Development Stage Entities.”

	Use of Estimates

	The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. The most significant estimates with regard to these consolidated financial statements relate to carrying values of oil and gas properties, asset retirement obligations, the valuation of goodwill, determination of fair values of stock-based transactions, deferred income tax rates, and environmental risks and exposures.

	Allowance for Doubtful Accounts

	The Company routinely assesses the recoverability of all material receivables to determine their collectability. All of the Company's receivables are from joint venture partners. The Company is exposed to a concentration of credit risk with respect to its accounts receivable. The Company believes its financial partners are financially strong and the risk of loss is minimal. The Company accrues a reserve on a receivable when, based on the judgment of management, it is probable that a receivable will not be collected and the amount of any reserve may be reasonably estimated. As of August 31, 2014 and 2013, the Company had no amount recorded as an allowance for doubtful accounts.

	Oil and Gas Properties

	The Company utilizes the full cost method to account for its investment in oil and gas properties. Accordingly, all costs associated with acquisition, exploration and development of oil and gas reserves, including such costs as leasehold acquisition costs relating to unproved properties, geological expenditures, tangible and intangible development costs including direct internal costs are capitalized to the full cost pool. Sales of proved and unproved properties are accounted for as adjustments of capitalized costs with no gain or loss recognized, unless such adjustments would significantly alter the relationship between capitalized costs and proved reserves of oil and gas, in which case the gain or loss is recognized in the statement of operations.

	Depletion, depreciation and amortization (DD&A) of oil and gas properties is calculated quarterly, using the Units of Production Method (UOP). The UOP calculation, in simplest terms, matches the percentage of estimated proved reserves produced each quarter with the costs of those reserves. The result is to recognize expense at the same pace that the reservoirs are actually depleting. The amortization base in the UOP calculation includes the sum of proved property costs net of accumulated DD&A, estimated future development costs (future costs to access and develop reserves) and asset retirement costs which are not already included in oil and gas properties, less related salvage value. Costs of unproved properties are not amortized until the proved reserves associated with the projects can be determined or until impairment occurs. The Company periodically assesses potential impairment of its unproven properties by applying factors based on historical asset experience, average holding periods for unproven properties and other data such as remaining lease terms, and geological and geophysical information. If an assessment of such properties indicates that properties are impaired, the amount of impairment is added to the capitalized cost base to be amortized.

	The capitalized costs included in the full cost pool are subject to a "ceiling test" (based on the average of the first-day-of-the-month prices during the twelve-month period prior to August 31, 2014 pursuant to the SEC’s “Modernization of Oil and Gas Reporting” rule), which limits such costs to the aggregate of the (i) estimated present value, using a ten percent discount rate, of the future net revenues from proved reserves, based on current economic and operating conditions, (ii) the lower of cost or estimated fair value of unproven properties included in the costs being amortized, (iii) the cost of properties not being amortized, less (iv) income tax effects
	related to differences between the book and tax basis of the cost of properties not being amortized and the cost or estimated fair value of unproved properties included in the costs being amortized. If net capitalized costs exceed this limit, the excess is charged to expense in the current period.

	The Company reviewed its unproven properties for potential impairment as of August 31, 2014 and 2013 and determined that since the estimated fair values of such assets exceeded carrying values no impairment was warranted. The Company did not drill any oil or gas wells during the two years ended August 31, 2014 and 2013.

	Oil and Gas Acquisitions

	The Company accounts for the acquisition of oil and gas properties under the requirements of Financial Accounting Standards Board (FASB) ASC Topic 805, Business Combinations (ASC Topic 805), issued in December 2007, with additional guidance issued in April 2009. ASC Topic 805 requires an acquiring entity to recognize all assets acquired and liabilities assumed at fair value under the acquisition method of accounting, provided they qualify for acquisition accounting under the standard. The Company accounts for all property acquisitions that include working interests in proved leaseholds, both operated and non-operated, that would generate more than an immaterial balance of goodwill as business combinations. The Company does not apply acquisition accounting to the purchase of oil and gas properties entirely comprised of undeveloped leaseholds, which is in compliance with ASC Topic 805. In large part, the Company’s acquisitions of the KGP targeted its high-functioning infrastructure which is capable of being conducted and managed as a business in its hands. In connection with its acquisitions, the Company began its pursuit of the KGP’s principal business activities including the production of outputs, which have access to a proven customer base. Accordingly, the Company has recognized the fair value of all the assets acquired and liabilities assumed in connection with its KGP working interest acquisitions.

	The Company adopted ASC Topic 805 effective December 23, 2009. Accordingly, the Company, on an ongoing basis, conducts assessments of net assets acquired to determine if acquisition accounting is appropriate. As appropriate, the Company properly records assets acquired and liabilities assumed at their estimated acquisition date fair values, while transaction and integration costs associated with the acquisitions are expensed as incurred. The Company uses relevant market assumptions to determine fair value and allocate purchase price, such as future commodity pricing for purchased hydrocarbons, market multiples for similar transactions and replacement value for certain equipment. Many of the assumptions are unobservable.

	Asset Retirement Obligations

	The Company records asset retirement obligations based on the guidance set forth in ASC Topic 410, as a liability in the period in which it incurs an obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development and/or normal use of the assets. The estimated balance of the asset retirement obligation is based on the current cost escalated at an inflation rate and discounted at a credit adjusted risk-free rate. This liability is capitalized as part of the cost of the related asset and amortized over its useful life.

	Contingencies and Factors Which May Affect Future Operations

	In the course of business affairs and operations, the Company is subject to possible loss contingencies arising from federal, state and local environmental, health and safety laws and regulations and third party litigation. At August 31, 2014 and 2013, the Company was not party to any legal actions arising incidental to its business nor is it aware of any threatened litigation. There are no matters which, in the opinion of management, will have an adverse effect on the financial position, results of operations or cash flows for the Company.

	Long-Lived Assets

	The carrying value of intangible assets and other long-lived assets is reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value.

	Environmental

	Oil and gas activities are subject to extensive federal, state and provincial environmental laws and regulations. These laws, which are constantly changing, regulate the discharge of materials into the environment and may require the Company to remove or mitigate the environmental effects of the disposal or release of petroleum or chemical substances at various sites.

	Environmental expenditures are expensed or capitalized depending on their future economic benefit. Expenditures that relate to an existing condition caused by past operations and that have no future economic benefits are expensed. Liabilities for expenditures of a non-capital nature are recorded when an environmental assessment and/or remediation is probable, and the costs can be reasonably estimated.

	Revenue Recognition

	The Company recognizes natural gas revenue under the sales method of accounting for its interests in producing wells as natural gas is produced and sold from those wells. Natural gas sold by the Company is not significantly different from the Company’s share of production. The Company recognizes revenue upon transfer of ownership of the product to the customer which occurs when (i) the product is physically received by the customer, (ii) an invoice is generated which evidences an arrangement between the customer and the Company, (iii) a fixed sales price has been included in such invoice and (iv) collection from such customer is reasonably assured. Gas sales are reported net of applicable production taxes. The Company has generated no material revenue during the years ended August 31, 2014 or 2013.

	Stock-Based Compensation

	The Company records compensation expense in the consolidated financial statements for stock-based payments using the fair value method. The fair value of stock options granted to directors and employees is determined using the Black-Scholes option valuation model at the time of grant. Fair value for common shares issued for goods or services rendered by non-employees are measured based on the fair value of the goods and services received. Stock-based compensation is expensed with a corresponding increase to share capital.

	Income Taxes

	Income taxes are determined using the liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes that date of enactment. In addition, a valuation allowance is established to reduce any deferred tax asset for which it is determined that it is more likely than not that some portion of the deferred tax asset will not be realized.

	The Company accounts for uncertainty in income taxes by applying a two-step method. First, it evaluates whether a tax position has met a more likely than not recognition threshold, and second, it measures that tax position to determine the amount of benefit, if any, to be recognized in the financial statements. The application of this method did not have a material effect on the Company's consolidated financial statements.

	Foreign Currency Gains and Losses

The Company’s functional and reporting currency is the United States dollar. The functional currency of the Company’s Canadian subsidiary is the Canadian dollar. Financial statements of the Company's Canadian subsidiary are translated to United States dollars using period-end rates of exchange for assets and liabilities, and average rates of exchange for the period for revenues and expenses. Translation gains (losses) are recorded in accumulated other comprehensive income as a component of stockholders’ equity. Transaction gains and losses are included in the determination of income. Foreign currency transactions are primarily undertaken in Canadian dollars. At August 31, 2014 and 2013, the Company had not entered into derivative instruments to offset the impact of foreign currency fluctuations.


Earnings Per Share

The Company presents both basic and diluted earnings per share (“EPS”) on the face of the consolidated statements of operations. Basic EPS is computed by dividing net earnings (loss) available to common shareholders by the weighted average number of shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including convertible debt, stock options, and warrants, using the treasury stock method. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. The Company’s Diluted EPS amounts did not differ from Basic EPS for the year ended August 31, 2014, as it generated net losses during that period and any adjustment would have been anti-dilutive. The Company’s Diluted EPS amounts differ from Basic EPS for the year ended August 31, 2013, as the Company was in a net income position and adjusted the weighted average number of shares outstanding during that period by 1,411,262 shares of one of the Company’s subsidiaries issued in connection with the Company’s acquisition of the KGP, which are exchangeable for 1,614,767 shares of the Company’s restricted common stock.

As of August 31, 2014 and 2013, the Company had 5,972,267 and 3,238,101 shares of its common stock, respectively, considered non-dilutive for EPS purposes, available through the exercise stock rights agreements.

Recent Accounting Pronouncements

In June 2014, the FASB issued Accounting Standards Update 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation (ASU 2014-10), which eliminates the concept of a development stage entity (DSE) from U.S. GAAP. This change rescinds certain financial reporting requirements that have historically applied to DSEs and is intended to result in cost-savings for affected entities. ASU 2014-10 is effective for public entities for annual reporting periods beginning after December 15, 2014 and interim periods therein. The adoption of this guidance results in the removal of certain inception-to-date amounts and disclosures previously reported. The Company does not expect, however, that the removal of this information will have a material effect on its consolidated financial statements or the related footnote disclosures thereto.

3_FAIR_VALUE_MEASUREMENTS

3. FAIR VALUE MEASUREMENTS	12 Months Ended
	Aug. 31, 2014
Fair Value Disclosures [Abstract]	'
3. FAIR VALUE MEASUREMENTS	'
	The Company estimates the fair values of financial and non-financial assets and liabilities under ASC Topic 820 “Fair Value Measurements and Disclosures” (“ASC Topic 820”). ASC Topic 820 provides a framework for consistent measurement of fair value for those assets and liabilities already measured at fair value under other accounting pronouncements. Certain specific fair value measurements, such as those related to share-based compensation, are not included in the scope of ASC Topic 820. Primarily, ASC Topic 820 is applicable to assets and liabilities related to financial instruments, to some long-term investments and liabilities, to initial valuations of assets and liabilities acquired in a business combination, and to long-lived assets written down to fair value when they are impaired. It does not apply to oil and natural gas properties accounted for under the full cost method, which are subject to impairment based on SEC rules. ASC Topic 820 applies to assets and liabilities carried at fair value on the consolidated balance sheet, as well as to supplemental fair value information about financial instruments not carried at fair value.

	Valuation techniques are generally classified into three categories: the market approach; the income approach; and the cost approach. The selection and application of one or more of these techniques requires significant judgment and is primarily dependent upon the characteristics of the asset or liability, the principal (or most advantageous) market in which participants would transact for the asset or liability and the quality and availability of inputs. Inputs to valuation techniques are classified as either observable or unobservable within the following hierarchy:

		●	Level 1 — quoted prices in active markets for identical assets or liabilities.

		●	Level 2 — inputs other than quoted prices that are observable for an asset or liability. These include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market-corroborated inputs).

		●	Level 3 — unobservable inputs that reflect the Company’s own expectations about the assumptions that market participants would use in measuring the fair value of an asset or liability.

	A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

	Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instrument’s complexity.

	Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

	Acquired oil and gas properties are reported at fair value on a nonrecurring basis in the Company’s balance sheet. See Notes 2 and 4, for further discussion of the methods and assumptions used to estimate fair values.

	Cash, Cash Equivalents and the Fair Value of Financial Instruments

	The Company considers all highly liquid instruments with an original maturity of three months or less at the time of issuance to be cash equivalents. Cash and cash equivalents totaled $650,599 and $476,522 at August 31, 2014 and 2013, respectively. The Company is exposed to a concentration of credit risk with respect to its cash deposits. The Company places cash deposits with highly rated financial institutions in the United States and Canada. At times, cash balances held in financial institutions may be in excess of insured limits. The Company believes the financial institutions are financially strong and the risk of loss is minimal. The Company has not experienced any losses with respect to the related risks and does not believe its exposure to such risks is more than normal.

	The estimated fair values for financial instruments are determined at discrete points in time based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The estimated fair value of cash, other receivables, accounts payable, accrued liabilities and demand notes payable approximates their carrying value due to their short-term nature.

4_OIL_AND_GAS_PROPERTIES

4. OIL AND GAS PROPERTIES	12 Months Ended
4. OIL AND GAS PROPERTIES	Aug. 31, 2014
Extractive Industries [Abstract]	'
4. OIL AND GAS PROPERTIES	'
	Oil and Gas Acquisition – Kotaneelee Gas Project (the “KGP”)

	As a result of two working interest acquisitions, the Company now generally owns a 53.65% working interest in the KGP, including a 100% working interest in one shut in gas well.

	The KGP covers 30,188 gross acres in the Yukon Territory in Canada, and includes: a gas dehydration plant (capacity: 70 MMcf/d), one shut in gas well, one water disposal well (capacity: 6,000 bbl/d), and two suspended gas wells. The KGP has a fully developed gas gathering, sales and delivery infrastructure, airstrip, roads, flarestack, storage tanks, barge dock and a 24 person permanent camp facility. The KGP gas dehydration plant has a processing capacity of 70 MMcf/d, outlet gas compression of 1,200 psig and is tied-in through a 24-inch gas sales line to a gas processing plant in Fort Nelson, British Columbia.

	On July 18, 2012, the Company completed an acquisition of Devon Canada’s (“Devon”) entire right and interest (generally a working interest of 22.989%, with a working interest of 69.337% in one shut in gas well) in the KGP. As consideration for Devon’s working interest in the KGP, (the “Devon Assets”), the Company paid approximately $23,298,000. The consideration was comprised of $290,000 in cash, 7,250,000 shares of the Company’s restricted common stock valued at $15,950,000, and the absorption of approximately $7,058,000 in asset retirement obligations.

	On October 17, 2012, the Company completed a Share Purchase Agreement with Nahanni Energy Inc., 1700665 Alberta Ltd., Apex Energy (2000), Inc. and Canada Southern Petroleum #1 L.P. (jointly “Nahanni”) for the acquisition of its entire right and interest (generally a working interest of 30.664%) in the KGP (the “Nahanni Assets”) which, in addition to the 69.337% working interest acquired from Devon on July 18, 2012, provided the Company with a 100% interest in one shut in gas well in the KGP.

	As consideration for the Nahanni Assets, the Company paid Nahanni approximately $13,761,000. The consideration was comprised of approximately $133,000 in cash ($398,550 offset by $265,950 paid in connection with the acquisition of the Devon Assets in settlement of certain Nahanni indebtedness), 1,614,767 shares of one of the Company’s subsidiaries, which are exchangeable for 1,614,767 shares of the Company’s restricted common stock valued at approximately $4,191,000, and the absorption of approximately $9,437,000 in asset retirement obligations. The number of shares issued by the Company’s subsidiary was calculated by dividing the fair value of the exchangeable shares by the volume weighted average trading price of the Company’s stock for the ten (10) trading days prior to closing the purchase agreement. The fair value of the exchangeable shares has been recorded as additional paid in capital in the Company’s equity. The exchangeable shares enjoy no voting or revenue participation rights in the subsidiary.

	The Company is pursuing the acquisition of additional working interests in the KGP.

	The Company records assets acquired and liabilities assumed at their estimated acquisition date fair values, while transaction and integration costs associated with the acquisitions are expensed as incurred. The Company uses relevant market assumptions to determine fair value and allocate purchase price, such as future commodity pricing for purchased hydrocarbons, market multiples for similar transactions and replacement value for certain equipment. Many of the assumptions are unobservable. The Company’s preliminary assessment of the fair value of the Nahanni Assets resulted in a valuation of $25,526,554. As a result of incorporating this information into the purchase price allocation, a gain on bargain purchase of $11,766,787 was recognized in the accompanying consolidated statement of operations. The gain on bargain purchase was primarily attributable to the strategic nature of the divestiture by the motivated seller, coupled with a confluence of certain favorable economic trends in the industry and the geographic region in which the Nahanni Assets are located.

	The Company allocated the consideration paid for the Nahanni Assets and Devon assets based upon its assessment of their fair value at the dates of purchase, as follows:

		Fair Value of Assets Acquired (as restated)
	Asset Description	Nahanni Assets		Devon Assets		Total
				(Restated)
	Unproved leasehold costs	$	14,548,787	$	13,827,001	$	28,375,788
	Plant and equipment		8,594,362		6,484,001		15,078,363
	Gathering systems		2,383,405		1,788,001		4,171,406
	Vehicles		–		4,527		4,527
	Unproven Properties		25,526,554		22,103,530		47,630,084
	Goodwill		–		1,194,365		1,194,365
	Total Assets Acquired - KGP	$	25,526,554	$	23,297,895	$	48,824,449

	Capitalized acquisition, exploration and development costs incurred on the KGP during the fiscal years ended August 31, 2013 and 2014 are summarized as follows:

	KGP – Unproven Properties

	Balance, August 31, 2012	$	22,107,381
	Acquisition costs		25,526,554
	Expenditures on oil and gas properties		1,264,037
	Depletion and depreciation		––
	Oil and gas property impairment		––
	Balance, August 31, 2013		48,897,972

	Acquisition costs		––
	Expenditures on oil and gas properties		1,408,017
	Depletion and depreciation		––
	Oil and gas property impairment		––
	Balance, August 31, 2014	$	50,305,989

	Development costs incurred to obtain access and provide facilities for extracting, gathering, treating and storing oil and gas related to unproved oil and gas properties that are being evaluated for economic viability are added to the full cost pool until proved reserves are established, or determination is made that the unproved properties are impaired. During the years ended August 31, 2014 and 2013, the full cost pool was increased by $1,408,017 and $1,264,037, respectively, as a result of these costs.

	Capitalized Costs Excluded from Amortization

	The following table summarizes costs related to unproved properties that have been excluded from amounts subject to depletion, depreciation, and amortization at August 31, 2014. The KGP was the only individually significant property and development project included in the Company’s unevaluated property balance. No impairment occurred as of August 31, 2014 or 2013. The Company regularly evaluates these costs to determine whether impairment has occurred. The majority of these costs are expected to be evaluated and included in the amortization base before April 2016.

	Total Unproven Properties	As of		2014 Additions		As of
	Total Unproven Properties	31-Aug-13		2014 Additions		31-Aug-14
	Unproven Assets Acquired	$	47,630,084	$	––	$	47,630,084
	Unproven Development Costs		1,267,888		1,408,017		2,675,905
	Total unproven costs	$	48,897 ,972	$	1,408,017	$	50,305,989

5_ASSET_RETIRMENT_OBLIGATIONS

5. ASSET RETIRMENT OBLIGATIONS	12 Months Ended
5. ASSET RETIRMENT OBLIGATIONS	Aug. 31, 2014
Notes to Financial Statements	'
5. ASSET RETIRMENT OBLIGATIONS	'
	In connection with its acquisition of the Devon Assets and the Nahanni Assets, the Company acquired $7,057,716 and $9,436,526 in asset retirement obligations, respectively, relating with its portion of the abandonment, reclamation and environmental liabilities associated with the KGP.

	On March 31, 2011, the Company initiated oil and gas operations by entry into a Farmout and Participation Agreement which provided for its acquisition of a net working interest ranging from 21.25% to 42.5%, in a 2,629 acre oil and gas lease, insofar as that lease covers from the surface to the base of the San Miguel formation (the “San Miguel Lease”). The San Miguel Lease, which is located in Zavala County, Texas, is unproven and has no current production. The Company incurred $80,000 in asset retirement obligations related to the future plugging and abandonment of a test well on the San Miguel Lease. At August 31, 2014, the Company’s interest in the San Miguel lease was impaired and expensed to the extent of its carrying value, which included the full amount of the associated asset retirement obligation. The entire asset retirement obligation relating to the San Miguel Lease has been classified as a current liability.

	The Company has no assets that are legally restricted for purposes of settling asset retirement obligations. As part of the Company’s acquisition of the Devon Assets, it provided Devon a corporate guarantee (the “Guarantee”) in the amount of CAD$10,000,000 (USD$9,188,000) and delivered a letter of credit in the amount of CAD$4,380,000 (USD$4,024,000) to Devon (the “Devon LOC”). The Company also delivered a letter of credit in the amount of CAD$625,000 (USD$574,000) to the government of the Yukon Territory (the “Yukon LOC”). The amounts of the Devon LOC and Yukon LOC reduce the amount of the Guarantee on a dollar-for-dollar basis. The Company is primarily responsible for payment of all asset retirement obligations. The Guarantee, Devon LOC and Yukon LOC are only available to Devon in the event the Company defaults upon its asset retirement obligations relating to the Devon Assets

	The following table summarizes the Company’s asset retirement obligation transactions for the fiscal years ended August 31, 2014 and 2013:

	Asset Retirement Obligations
	Balance, August 31, 2012	$	7,137,716
	Liabilities incurred (acquired)		9,436,526
	Accretion expense		572,508
	Liabilities (settled)		––
	Changes in asset retirement obligations		––
	Balance, August 31, 2013		17,146,750
	Liabilities incurred (acquired)		––
	Accretion expense		692,273
	Liabilities (settled)		––
	Changes in asset retirement obligations		––
	Total Balance, August 31, 2014	$	17,839,023
	Total Balance, August 31, 2014 – Current	$	80,000
	Total Balance, August 31, 2014– Long Term	$	17,759,023

6_CONVERTIBLE_NOTES_PAYABLE

6. CONVERTIBLE NOTES PAYABLE

12 Months Ended

Aug. 31, 2014

Notes to Financial Statements

4. CONVERTIBLE NOTES PAYABLE

As of August 31, 2014 convertible notes consisted of the following:

Convertible Notes

Principal

Discount

Balance as of

Amount

31-Aug-14

2013 Convertible Note Offering (net of $25,000 principal conversion)

2,230,000

(233,964

)

1,996,036

2014 Convertible Note Offering

1,400,000

––

1,400,000

Total convertible notes

3,630,000

(233,964

)

3,396,036

2013 Convertible Note Offering

On October 30, 2013 the Company sold convertible notes having an aggregate principal amount of $2,255,000 (the “2013 Convertible Notes”), to 22 accredited investors, under the following general terms (the "2013 Convertible Note Offering"):

●

the maturity date of the 2013 Convertible Notes is April 30, 2015;

●

the principal amount of the 2013 Convertible Notes is convertible into shares of the Company’s common stock at a price of $1.00 per share;

●

the 2013 Convertible Notes bear interest at 15% per annum payable, at the Company’s election, in cash or shares of its common stock at a rate of $1.25 per share; and

●

the Company also issued stock purchase warrants in connection with the 2013 Convertible Note Offering providing for the purchase of up to 1,127,500 shares of its common stock (1 full share for each $2.00 invested in the 2013 Convertible Notes”) at an exercise price of $1.25 per share for a period of three years (the "Stock Purchase Warrants”).

During the year ended August 31, 2014, the Company also paid $176,400 in finders’ fees and recognized $281,564 in interest expense relating to the 2013 Convertible Notes.

On June 2, 2014, $25,000 in principal payable on the 2013 Convertible Notes was converted to 25,000 shares of the Company’s common stock at a conversion price of $1.00 per share.

2014 Convertible Note Offering

During June 2014, the Company sold convertible notes having an aggregate principal amount of $1,400,000 (the “2014 Convertible Notes”), to two accredited investors, and one non-accredited investor, under the following general terms (the “2014 Convertible Note Offering”):

●

the maturity date of the 2014 Convertible Notes is December 31, 2014;

●

at the option of the note holder, the principal amount of the 2014 Convertible Notes was to be convertible into shares of the Company’s common stock at a price per share to be determined in connection with the Company’s planned offering of shares upon migration to a senior stock exchange, less a 10% discount (the “2014 Conversion Right”);

●

a 6% financing fee on the principal sum of the 2014 Convertible Notes, is payable:

in the event the note holder exercises its 2014 Conversion Right, in shares of the Company’s common stock (the number of which is to be calculated using the closing market price of the Company’s shares on the conversion date); or

in the event the note holder does not exercise its 2014 Conversion Right, at the option of the note holder, in shares of the Company’s common stock (the number of which is to be calculated using the closing market price of the Company’s shares at December 31, 2014), or in cash of $84,000.

●

the 2014 Convertible Notes are non-interest bearing so long as they are paid or converted prior to December 31, 2014. In the event of default, or if a 2014 Convertible Note is not paid, or converted on or before December 31, 2014:

the notes will bear interest at 10% per annum, payable monthly; and

an additional 4% financing fee (the Default Financing Fee) on the then outstanding principal balance of the 2014 Convertible Notes shall become due and payable. The Company is obligated to pay the Default Financing Fee in common shares at a conversion price equal to the closing market price of the common shares on the date of an event of default, or December 31, 2014, whichever is earliest.

During the year ended August 31, 2014, the Company recognized $37,183 in interest expense relating to the 2014 Convertible Notes.

7_RELATED_PARTY_TRANSACTIONS

7. RELATED PARTY TRANSACTIONS	12 Months Ended
7. RELATED PARTY TRANSACTIONS	Aug. 31, 2014
Related Party Transactions [Abstract]	'
7. RELATED PARTY TRANSACTIONS	'
	Companies affiliated with the Company’s Chairman and one of its Directors purchased convertible notes in the principal amounts of $1,000,000 and $350,000, respectively, in the 2014 Convertible Note Offering (Note 6).

	Effective September 1, 2013, the Company executed an administrative services agreement with its largest shareholder, Holloman Corporation. Under this agreement, fees of $5,000 per month are payable to Holloman Corporation covering; office and meeting space, supplies, utilities, office equipment, network access and other administrative facilities costs. These fees are payable quarterly in shares of the Company’s restricted common stock at the closing price of the stock on the last trading-day of the applicable monthly billing period. This administrative services agreement can be terminated by either party with 30-day notice. Proceeds from this administrative service agreement have been assigned to a wholly owned subsidiary of Holloman Corporation.

	In connection with its acquisition of the Devon Assets, the Company acquired $7,057,716 in asset retirement obligations. To secure this obligation, the Company provided Devon the Guarantee, the Devon LOC, and the Yukon LOC (Note 5). The Guarantee was provided to Devon by the Company’s largest shareholder, Holloman Corporation, in exchange for 3,250,000 shares of the Company’s restricted common stock. Likewise, the Devon LOC was provided to Devon by Pacific LNG Operations Ltd. (“PLNG”). PLNG also provided the Yukon LOC to the government of the Yukon Territory. In exchange for the Devon LOC and Yukon LOC the Company issued PLNG 4,000,000 shares of its restricted common stock. Two of the Company’s directors, James Ebeling and Eric Prim are officers of Holloman Corporation, and Henry Aldorf, the Chairman of the Company’s Board of Directors, is a director of PLNG.

	Effective January 20, 2011, a company controlled by the Company’s Chief Executive Officer, its Chief Financial Officer, and an unrelated consultant (the “Finders”) entered into an agreement with the Company providing for the payment of finders’ compensation ranging from 5% (on transaction values greater than $1,000,000) to 10% (on transactions valued up to $300,000) on transactions introduced to the Company by or through the Finders for a period of two years (the “Finders’ Fee Agreement”). Under the Finders’ Fee Agreement, compensation is divided among the Finders and the Finders may elect whether the finders’ compensation is payable in cash, or shares of the Company’s restricted common stock. If the Finders elect to receive payment in stock, the shares into which finders’ compensation will be converted will be calculated using the average closing price of the Company’s common stock for the ten trading days preceding the closing date of the transaction to which the compensation relates. The Finders’ Fee Agreement specifically recognizes that the KGP has been presented to the Company by the Finders. During the year ended August 31, 2013, finders’ compensation of $844,282 was recognized as stock based compensation and consulting fees in connection with the Company’s acquisition of the Nahanni Assets. As of August 31, 2014 a total of $1,619,621 remains accrued and unpaid in connection with the Finders’ Fee Agreement.

	Management Fees

	During each of the years ended August 31, 2014 and 2013, management fees totaling $240,000, were incurred with an entity controlled by the Company’s Chief Executive Officer. Under the terms of a consulting agreement, this compensation is payable in equal parts cash and shares of the Company’s restricted common stock (Note 8). The fees were incurred as compensation for services rendered in the normal course of operations. The amount and form of the compensation was established and approved by the Company’s Board of Directors. Amounts of $100,000 and $50,000 of this compensation remained accrued and unpaid as of August 31, 2014 and 2013, respectively.

	During the years ended August 31, 2014 and 2013, management fees totaling $297,810 and $190,624 were incurred with an entity controlled by the Company’s Chief Operating Officer. The amount of compensation was established and approved by the Company’s Board of Directors. Of the amounts incurred, $7,480 and $13,541 remained accrued and unpaid as of August 31, 2014 and 2013, respectively.

	For the years ended August 31, 2014 and 2013, compensation to the Company’s Chief Financial Officer totaled $172,350 and $227,272, respectively. Of those compensation amounts, $6,654 and $9,750 were accrued at August 31, 2014 and 2013, respectively. These fees were incurred as compensation for services rendered in the normal course of operations, and were paid at the amount established and agreed to by the related parties, and were approved by the Company’s Board of Directors.

	During the years ended August 31, 2014 and 2013, management fees totaling $83,193 and $108,424, respectively, were incurred with an entity controlled by the Company’s President. On June 2, 2014 the Company’s President resigned. On that date, $54,350 in unpaid fees were settled using 67,938 shares of the Company’s restricted common stock. The Company also granted the outgoing President 100,000 shares of its common stock as additional compensation. On June 2, 2014, the closing price of the Company’s common stock was $0.80 per share. As of August 31, 2013, $19,220 in fees and reimbursable expenses remained accrued and unpaid to this officer.

8_CAPITAL_STOCK_AND_STOCK_BASE

8. CAPITAL STOCK AND STOCK BASED COMPENSATION

12 Months Ended

Aug. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

8. CAPITAL STOCK AND STOCK BASED COMPENSATION

Convertible Notes

In connection with the 2013 Convertible Note Offering (Note 6), the Company issued the Stock Purchase Warrants providing for the purchase of up to 1,127,500 shares of its common stock (1 full share for each $2.00 invested in the 2013 Convertible Notes) at an exercise price of $1.25 per share for a period of three years. The Company applied the Black-Scholes option pricing model to determine the fair market value of the Stock Purchase Warrants. In applying the model, the Company used the following parameters: contractual lives of 3 years, historical stock price volatility of 77%, a risk-free rate of 4.5% and an annual dividend rate of 0%. As a result, the Company determined that the total fair market value of the Stock Purchase Warrants was $533,803, and that amount was recognized as a discount against the principal of 2013 Convertible Notes. This is considered to be a Level 2 fair value measurement. During the year ended August 31, 2014, $299,839 of the 2013 Convertible Note discount was amortized to interest expense.

In aggregate, 3,357,500 shares of the Company’s common stock (comprised of 2,230,000 shares issuable on conversion of the principal of the 2013 Convertible Notes and 1,127,500 shares issuable on exercise of the Stock Purchase Warrants), or such greater number of shares as may be issuable upon election of the interest repayment in common stock under the terms of the 2013 Convertible Notes, has been reserved for issuance upon conversion of the Convertible Notes or exercise of the Stock Purchase Warrants in accordance with their terms.

Sales of Common Stock and Investment Units

During January and February 2013, the Company sold 350,000 shares of its common stock to two (2) accredited investors at a price of $1.20 per share. Gross proceeds from these private placements totaled $420,000. The Company paid $14,700 in finders’ fees in connection with the sale of these shares.

During October 2012, the Company sold 1,530,666 shares of its common stock to ten (10) accredited investors at a price of $1.20 per share. Gross proceeds from these private placements totaled $1,836,800. The Company paid $64,289 in finders’ fees in connection with the sale of these shares.

The Company relied upon the exemption provided by Section 4(2) of the Securities Act of 1933 with respect to the sale of these securities.

Non-Qualified Stock Option Plan and a Stock Bonus Plan

On August 27, 2012, the Company established a Non-Qualified Stock Option Plan and a Stock Bonus Plan (the “Plans”). The Non-Qualified Stock Option Plan (the “Option Plan”) authorizes the issuance of up to 2,000,000 shares of the Company’s common stock. The Stock Bonus Plan provides for the issuance of up to 350,000 common shares (“Bonus Shares”). Under the Plans, shares may only be issued to employees, directors, officers, consultants and advisors, provided qualifying services are rendered.

The Company has full and final authority in its discretion, subject to the provisions of the Plans, and subject to the approval of its Board of Directors, to determine the individuals to whom, and the time or times at which shares or options shall be granted and the number of such shares or options; to construe and interpret the Plans; to determine the terms and provisions of the respective option agreements, which need not be identical, including, but without limitation, terms covering the payment of the option price; and to make all other determinations and take all other actions deemed necessary or advisable for the proper administration of the Plans. All such actions and determinations shall be conclusively binding for all purposes and upon all persons.

The Company may at any time, and from time to time, amend, terminate, or suspend one or more of the Plans in any manner it deems appropriate, provided that any amendment, termination or suspension may not adversely affect rights or obligations with respect to options or shares previously granted.

On August 27, 2012, the Company granted options to officers, directors and consultants under the terms shown below. The options were granted pursuant to the Option Plan.

Number of Shares

Exercise

First Date

Expiration

Issuable Upon

Price

Vesting

Exercisable

Date

Exercise of Option

Period

300,000

2.15

None

8/27/12

8/27/14

300,000

2.3

6 Months

2/27/13

8/27/14

300,000

2.5

2 Years

8/27/14

8/27/17

300,000

2.65

2 Years

8/27/14

8/27/17

1,200,000

In applying the Black-Scholes model, the Company used; expected terms of 2-5 years, historical stock price volatility of 67%, a risk-free rate of 4.5% and annual dividend rate of 0%. As a result, the Company determined that the total fair market value of the options granted was $1,131,900 and the weighted-average grant-date fair value per option granted was $0.94.

In addition, on August 27, 2012, the Company issued 300,000 shares of its common stock to officers and directors pursuant to the Stock Bonus Plan. The fair value for shares of common stock given as compensation was the market price of the stock at date of grant. The 300,000 Bonus Shares had a value of $2.07 per share.

On January 15, 2013, the Company also authorized the issuance of 50,000 bonus shares of its common stock to its new Chief Operating Officer pursuant to the 2012 Stock Bonus Plan. The Company recognized non-cash management fees of $97,000, or $1.94 per share related to these Bonus Shares in the statements of operations during the year ended August 31, 2013.

On January 15, 2013, the Company granted its new Chief Operating Officer 400,000 stock options in accordance with its 2012 Non-Qualified Stock Option Plan under the terms shown below:

No. of Shares

Exercise

Vesting

First Date

Expiration Date

Issuable Upon Exercise

Price

Period

Exercisable

100,000

2.3

None

1/15/13

1/15/15

100,000

2.5

1 Year

1/14/14

1/15/16

100,000

2.75

2 Years

1/14/15

1/15/17

100,000

2.5 Years

7/14/15

7/15/17

400,000

The Company applied the Black-Scholes option pricing model to determine the fair market value of the options granted. In applying the model, the Company used the following parameters: contractual lives of 2 to 4.5 years, historical stock price volatility of 65%, a risk-free rate of 4.5% and an annual dividend rate of 0%. As a result, the Company determined that the total fair market value of the options granted was $313,646 and the weighted-average grant-date fair value per option granted was $0.78.

During the years ended August 31, 2014 and 2013, the Company recognized $437,107 and $714,665, respectively, of non-cash expense related to stock-based compensation under the Option Plan. As of August 31, 2014, $46,798 of total unrecognized compensation cost remains under the Option Plan. This amount, $46,798 is expected to be recognized during fiscal 2015.

Options

Weighted-Average

Aggregate Intrinsic value

Weighted-Average

Remaining Contract Term (yrs)

Exercise Price

Outstanding – September 1, 2012

1,200

2.40

Granted

400

2.64

Exercised

––

Forfeited or expired

––

Outstanding – August 31, 2013

1,600

2.46

3.68

Granted

Exercised

––

Forfeited or expired

-600

2.22

Outstanding – August 31, 2014

1,000

2.6

2.49

Exercisable – August 31, 2014

800

2.53

2.46

The weighted-average grant-date fair value of options granted during the year ended August 31, 2013 was $0.78.

Other Stock-Based Compensation

During the years ended August 31, 2014 and 2013, $120,000 and $120,000 in fees were paid to entities controlled by the Company’s Chief Executive Officer using 124,021 and 64,344 shares of the Company’s restricted common stock at weighted average prices of $0.97 and $1.87 per share, respectively.

During the year ended August 31, 2014, fees totaling $60,000 incurred in connection with an administrative services agreement were paid to the Company’s largest shareholder using 62,010 shares of the Company’s restricted common stock at a weighted average price of $0.97.

On June 2, 2014 the Company’s President resigned. On that date, $54,350 in unpaid fees were settled using 67,938 shares of the Company’s restricted common stock. The Company also granted the outgoing President 100,000 shares of its common stock as additional compensation. On June 2, 2014, the closing price of the Company’s common stock was $0.80 per share.

During the year ended August 31, 2014, fees totaling $30,000 were paid using 31,005 shares of the Company’s restricted common stock at a weighted average price of $0.97 to an unrelated consultant.

The Company relied upon the exemption provided by Section 4(2) of the Securities Act of 1933 with respect to the sale of these securities.

Stock Warrants and Other

At August 31, 2014, warrants for 1,127,500 shares of the Company’s common stock were outstanding with a weighted-average remaining life and exercise price of 26 months and $1.25, respectively. During the year ended August 31, 2014, 1,127,500 warrants were issued and 23,334 warrants were forfeited or expired. During the year ended August 31, 2013, 23,334 warrants were issued and 596,870 warrants were forfeited or expired.

On April 28, 2010, shareholders owning a majority of the Company’s outstanding shares approved a 20 for 1 forward split of its common stock. The forward stock split became effective on June 30, 2010. All references in these financial statements and related notes to number of shares, price per share and weighted average number of shares outstanding prior to this split have been adjusted to reflect the split on a retroactive basis unless otherwise noted. At no time has the Company issued more common stock than is legally authorized.

9_INCOME_TAXES

9. INCOME TAXES	12 Months Ended
9. INCOME TAXES	Aug. 31, 2014
Income Tax Disclosure [Abstract]	'
9. INCOME TAXES	'
	The Company is subject to United States federal income taxes at an approximate rate of 35%, and Canadian income taxes at a rate of 30%. The reconciliation of the provision for income taxes at the applicable statutory rate compared to the Company’s income tax expense as reported is as follows:

	Statutory tax rates:
		Canadian			United States			Canadian			United States
		Year Ended			Year Ended			Year Ended			Year Ended
		August 31,			August 31,			August 31,			August 31,
		2014			2014			2013			2013

	Net income (loss) before taxes	$	(946,968	)	$	(3,291,079	)	$	10,511,160	)	$	(3,928,955	)

	Statutory tax rates		30	%		35	%		30	%		35	%

	Computed tax benefit (provision) at statuary rates		284,090			1,151,878			(3,153,348	)		1,375,134
	Net operating loss carry forward		795,844			905,121			373,499			1,515,240
	Valuation allowance		(562,349	)		(2,056,999	)					(2,890,374	)
	Provision for income taxes	$	517,585		$	-		$	(2,779,849	)	$	––


	The significant components of deferred income tax assets and liabilities at August 31, 2014 and 2013 are as follows:
		Canadian			United States			Canadian			United States
		Year Ended			Year Ended			Year Ended August 31,			Year Ended
		August 31,			August 31,			2013			August 31,
		2014			2014						2013

	Deferred income tax assets:
	Impairment	$	––		$	307,998		$	––		$	307,998
	Organization costs		––			62,847			––			68,312
	Accrued salaries		––			36,242			––			36,242
	US net operating loss carryforwards		––			2,630,415			––			1,339,258
	Canadian net operating loss carryforwards		2,165,830			––			517,585			––
	Asset retirement obligation		207,682			––			––			––
	Stock compensation		––			1,909,847			––			1,138,564
	Total deferred income tax assets		2,373,512			4,947,349			517,585			2,890,374

	Deferred income tax liabilities:
	Gain on acquisition of assets	$	(3,297,434	)	$	––		$	(3,297,434	)	$	––
	Depreciation		(1,455,790	)		––			––			––
	Development expense		(355,373	)		––			––			––
	Total deferred income tax liabilities		(5,108,597	)		––			(3,297,434	)		––

	Total net deferred income tax asset (liability)	$	(2,735,085	)	$	4,947,349		$	(2,779,849	)	$	2,890,374
	Less: valuation allowance		(562,349	)		(4,947,349	)		––			(2,890,374	)
	Deferred income tax asset (liability)	$	(3,297,434	)	$	––		$	(2,779,849	)	$	––

	During the year ended August 31, 2013, a gain on bargain purchase of $11,766,787 was recognized in the accompanying consolidated statement of operations. The gain on bargain purchase was primarily attributable to the strategic nature of the divestiture by the motivated seller, coupled with a confluence of certain favorable economic trends in the industry and the geographic region in which the Nahanni Assets are located. See Note 4 for additional information regarding the purchase of assets and the related gain. This gain was not recognized for tax purposes.

	At August 31, 2014, the Company has accumulated United States non-capital loss carry-forwards of approximately $7,515,470. At August 31, 2013 the Company had accumulated United States non-capital loss carry-forwards of approximately $3,826,451. The United States loss carry-forwards begin to expire in 2032.

	At August 31, 2014, the Company has accumulated Canadian non-capital loss carry-forwards of approximately $7,219,434. At August 31, 2013, the Company has Canadian non-capital loss carry-forwards of approximately $1,725,284. The Canadian loss carry-forwards begin to expire in 2019.

	Deferred tax assets have resulted primarily from the Company’s future deductible temporary differences. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion, or all, of the deferred tax asset will be realized.

	The Company’s ability to realize its deferred tax assets depends upon the generation of sufficient future taxable income to allow the utilization of its deductible temporary differences and tax planning strategies. If such estimates and related assumptions change in the future, the Company may be required to record a valuation allowance against its deferred tax asset. Management evaluates the realizablity of the deferred tax assets and the need for a valuation allowance periodically. At this time, based on current facts and circumstances, management does not believe that it is more likely than not that the Company will realize benefit from its gross deferred tax assets.

	The Company has no uncertainties in income tax positions which, in the opinion of its management, need to be recognized in the consolidated financial statements. The Company’s tax returns for all years since inception remain open to review and examination by tax authorities.

10_SUBSEQUENT_EVENTS

10. SUBSEQUENT EVENTS	12 Months Ended
10. SUBSEQUENT EVENTS	Aug. 31, 2014
Subsequent Events [Abstract]	'
10. SUBSEQUENT EVENTS	'
10. SUBSEQUENT EVENTS	In June 2014, the Company filed a Canadian Prospectus and a US Form S-1 Registration Statement to facilitate its planned migration and initial public offering of common stock on the TSX Venture Exchange (Canada). As a result of poor and deteriorating conditions in Canadian capital markets, however, the Company withdrew its offering documents effective November 25, 2014. The Company currently plans to undertake further cost reduction strategies and a combination of working interest acquisition and farm-out strategies to facilitate its KPG exploration plans.

2_SUMMARY_OF_SIGNIFICANT_ACCOU1

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	Aug. 31, 2014
Summary Of Significant Accounting Policies Policies	'
Basis of Presentation	'
Basis of Presentation	These consolidated financial statements include the accounts of the Company and its three wholly owned subsidiaries after elimination of intercompany balances and transactions. The Company’s interest in oil and gas exploration and production ventures and partnerships are proportionately consolidated. These consolidated financial statements and related notes are presented in accordance with US GAAP, and are expressed in United States dollars. The Company is an exploration stage company as defined by “Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 915, Development Stage Entities.”
Use of Estimates	'
Use of Estimates	The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. The most significant estimates with regard to these consolidated financial statements relate to carrying values of oil and gas properties, asset retirement obligations, the valuation of goodwill, determination of fair values of stock-based transactions, deferred income tax rates, and environmental risks and exposures.
Allowance for Doubtful Accounts	'
Allowance for Doubtful Accounts	The Company routinely assesses the recoverability of all material receivables to determine their collectability. All of the Company's receivables are from joint venture partners. The Company is exposed to a concentration of credit risk with respect to its accounts receivable. The Company believes its financial partners are financially strong and the risk of loss is minimal. The Company accrues a reserve on a receivable when, based on the judgment of management, it is probable that a receivable will not be collected and the amount of any reserve may be reasonably estimated. As of August 31, 2014 and 2013, the Company had no amount recorded as an allowance for doubtful accounts.
Oil and Gas Properties	'
	The Company utilizes the full cost method to account for its investment in oil and gas properties. Accordingly, all costs associated with acquisition, exploration and development of oil and gas reserves, including such costs as leasehold acquisition costs relating to unproved properties, geological expenditures, tangible and intangible development costs including direct internal costs are capitalized to the full cost pool. Sales of proved and unproved properties are accounted for as adjustments of capitalized costs with no gain or loss recognized, unless such adjustments would significantly alter the relationship between capitalized costs and proved reserves of oil and gas, in which case the gain or loss is recognized in the statement of operations.

	Depletion, depreciation and amortization (DD&A) of oil and gas properties is calculated quarterly, using the Units of Production Method (UOP). The UOP calculation, in simplest terms, matches the percentage of estimated proved reserves produced each quarter with the costs of those reserves. The result is to recognize expense at the same pace that the reservoirs are actually depleting. The amortization base in the UOP calculation includes the sum of proved property costs net of accumulated DD&A, estimated future development costs (future costs to access and develop reserves) and asset retirement costs which are not already included in oil and gas properties, less related salvage value. Costs of unproved properties are not amortized until the proved reserves associated with the projects can be determined or until impairment occurs. The Company periodically assesses potential impairment of its unproven properties by applying factors based on historical asset experience, average holding periods for unproven properties and other data such as remaining lease terms, and geological and geophysical information. If an assessment of such properties indicates that properties are impaired, the amount of impairment is added to the capitalized cost base to be amortized.

	The capitalized costs included in the full cost pool are subject to a "ceiling test" (based on the average of the first-day-of-the-month prices during the twelve-month period prior to August 31, 2014 pursuant to the SEC’s “Modernization of Oil and Gas Reporting” rule), which limits such costs to the aggregate of the (i) estimated present value, using a ten percent discount rate, of the future net revenues from proved reserves, based on current economic and operating conditions, (ii) the lower of cost or estimated fair value of unproven properties included in the costs being amortized, (iii) the cost of properties not being amortized, less (iv) income tax effects
	related to differences between the book and tax basis of the cost of properties not being amortized and the cost or estimated fair value of unproved properties included in the costs being amortized. If net capitalized costs exceed this limit, the excess is charged to expense in the current period.

	The Company reviewed its unproven properties for potential impairment as of August 31, 2014 and 2013 and determined that since the estimated fair values of such assets exceeded carrying values no impairment was warranted. The Company did not drill any oil or gas wells during the two years ended August 31, 2014 and 2013.
Oil and Gas Acquisitions	'
	The Company accounts for the acquisition of oil and gas properties under the requirements of Financial Accounting Standards Board (FASB) ASC Topic 805, Business Combinations (ASC Topic 805), issued in December 2007, with additional guidance issued in April 2009. ASC Topic 805 requires an acquiring entity to recognize all assets acquired and liabilities assumed at fair value under the acquisition method of accounting, provided they qualify for acquisition accounting under the standard. The Company accounts for all property acquisitions that include working interests in proved leaseholds, both operated and non-operated, that would generate more than an immaterial balance of goodwill as business combinations. The Company does not apply acquisition accounting to the purchase of oil and gas properties entirely comprised of undeveloped leaseholds, which is in compliance with ASC Topic 805. In large part, the Company’s acquisitions of the KGP targeted its high-functioning infrastructure which is capable of being conducted and managed as a business in its hands. In connection with its acquisitions, the Company began its pursuit of the KGP’s principal business activities including the production of outputs, which have access to a proven customer base. Accordingly, the Company has recognized the fair value of all the assets acquired and liabilities assumed in connection with its KGP working interest acquisitions.

	The Company adopted ASC Topic 805 effective December 23, 2009. Accordingly, the Company, on an ongoing basis, conducts assessments of net assets acquired to determine if acquisition accounting is appropriate. As appropriate, the Company properly records assets acquired and liabilities assumed at their estimated acquisition date fair values, while transaction and integration costs associated with the acquisitions are expensed as incurred. The Company uses relevant market assumptions to determine fair value and allocate purchase price, such as future commodity pricing for purchased hydrocarbons, market multiples for similar transactions and replacement value for certain equipment. Many of the assumptions are unobservable.

Asset Retirement Obligations	'
Asset Retirement Obligations	The Company records asset retirement obligations based on the guidance set forth in ASC Topic 410, as a liability in the period in which it incurs an obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development and/or normal use of the assets. The estimated balance of the asset retirement obligation is based on the current cost escalated at an inflation rate and discounted at a credit adjusted risk-free rate. This liability is capitalized as part of the cost of the related asset and amortized over its useful life.
Contingencies And Factors Which May Affect Future Operations	'
	In the course of business affairs and operations, the Company is subject to possible loss contingencies arising from federal, state and local environmental, health and safety laws and regulations and third party litigation. At August 31, 2014 and 2013, the Company was not party to any legal actions arising incidental to its business nor is it aware of any threatened litigation. There are no matters which, in the opinion of management, will have an adverse effect on the financial position, results of operations or cash flows for the Company.
Long-Lived Assets	'
Long-Lived Assets	The carrying value of intangible assets and other long-lived assets is reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value.
Environmental	'
	Oil and gas activities are subject to extensive federal, state and provincial environmental laws and regulations. These laws, which are constantly changing, regulate the discharge of materials into the environment and may require the Company to remove or mitigate the environmental effects of the disposal or release of petroleum or chemical substances at various sites.

	Environmental expenditures are expensed or capitalized depending on their future economic benefit. Expenditures that relate to an existing condition caused by past operations and that have no future economic benefits are expensed. Liabilities for expenditures of a non-capital nature are recorded when an environmental assessment and/or remediation is probable, and the costs can be reasonably estimated.
Revenue Recognition	'
Revenue Recognition	The Company recognizes natural gas revenue under the sales method of accounting for its interests in producing wells as natural gas is produced and sold from those wells. Natural gas sold by the Company is not significantly different from the Company’s share of production. The Company recognizes revenue upon transfer of ownership of the product to the customer which occurs when (i) the product is physically received by the customer, (ii) an invoice is generated which evidences an arrangement between the customer and the Company, (iii) a fixed sales price has been included in such invoice and (iv) collection from such customer is reasonably assured. Gas sales are reported net of applicable production taxes. The Company has generated no material revenue during the years ended August 31, 2014 or 2013.
Stock-Based Compensation	'
Stock-Based Compensation	The Company records compensation expense in the consolidated financial statements for stock-based payments using the fair value method. The fair value of stock options granted to directors and employees is determined using the Black-Scholes option valuation model at the time of grant. Fair value for common shares issued for goods or services rendered by non-employees are measured based on the fair value of the goods and services received. Stock-based compensation is expensed with a corresponding increase to share capital.
Income Taxes	'
	Income taxes are determined using the liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes that date of enactment. In addition, a valuation allowance is established to reduce any deferred tax asset for which it is determined that it is more likely than not that some portion of the deferred tax asset will not be realized.

	The Company accounts for uncertainty in income taxes by applying a two-step method. First, it evaluates whether a tax position has met a more likely than not recognition threshold, and second, it measures that tax position to determine the amount of benefit, if any, to be recognized in the financial statements. The application of this method did not have a material effect on the Company's consolidated financial statements.
Foreign Currency Gains and Losses	'
Foreign Currency Gains and Losses	The Company’s functional and reporting currency is the United States dollar. The functional currency of the Company’s Canadian subsidiary is the Canadian dollar. Financial statements of the Company's Canadian subsidiary are translated to United States dollars using period-end rates of exchange for assets and liabilities, and average rates of exchange for the period for revenues and expenses. Translation gains (losses) are recorded in accumulated other comprehensive income as a component of stockholders’ equity. Transaction gains and losses are included in the determination of income. Foreign currency transactions are primarily undertaken in Canadian dollars. At August 31, 2014 and 2013, the Company had not entered into derivative instruments to offset the impact of foreign currency fluctuations.
Earnings Per Share	'
	The Company presents both basic and diluted earnings per share (“EPS”) on the face of the consolidated statements of operations. Basic EPS is computed by dividing net earnings (loss) available to common shareholders by the weighted average number of shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including convertible debt, stock options, and warrants, using the treasury stock method. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. The Company’s Diluted EPS amounts did not differ from Basic EPS for the year ended August 31, 2014, as it generated net losses during that period and any adjustment would have been anti-dilutive. The Company’s Diluted EPS amounts differ from Basic EPS for the year ended August 31, 2013, as the Company was in a net income position and adjusted the weighted average number of shares outstanding during that period by 1,411,262 shares of one of the Company’s subsidiaries issued in connection with the Company’s acquisition of the KGP, which are exchangeable for 1,614,767 shares of the Company’s restricted common stock.

	As of August 31, 2014 and 2013, the Company had 5,972,267 and 3,238,101 shares of its common stock, respectively, considered non-dilutive for EPS purposes, available through the exercise stock rights agreements.
Recent Accounting Pronouncements	'
Recent Accounting Pronouncements	In June 2014, the FASB issued Accounting Standards Update 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation (ASU 2014-10), which eliminates the concept of a development stage entity (DSE) from U.S. GAAP. This change rescinds certain financial reporting requirements that have historically applied to DSEs and is intended to result in cost-savings for affected entities. ASU 2014-10 is effective for public entities for annual reporting periods beginning after December 15, 2014 and interim periods therein. The adoption of this guidance results in the removal of certain inception-to-date amounts and disclosures previously reported. The Company does not expect, however, that the removal of this information will have a material effect on its consolidated financial statements or the related footnote disclosures thereto.

4_OIL_AND_GAS_PROPERTIES_Table

4. OIL AND GAS PROPERTIES (Tables)	12 Months Ended
4. OIL AND GAS PROPERTIES (Tables)	Aug. 31, 2014
Oil And Gas Properties Tables	'
Schedule of Oil and Gas Acquisition	'
		Fair Value of Assets Acquired (as restated)
	Asset Description	Nahanni Assets		Devon Assets		Total
				(Restated)
	Unproved leasehold costs	$	14,548,787	$	13,827,001	$	28,375,788
	Plant and equipment		8,594,362		6,484,001		15,078,363
	Gathering systems		2,383,405		1,788,001		4,171,406
	Vehicles		–		4,527		4,527
	Unproven Properties		25,526,554		22,103,530		47,630,084
	Goodwill		–		1,194,365		1,194,365
	Total Assets Acquired - KGP	$	25,526,554	$	23,297,895	$	48,824,449
Capitalized acquisition, exploration and development costs	'
	KGP – Unproven Properties

	Balance, August 31, 2012	$	22,107,381
	Acquisition costs		25,526,554
	Expenditures on oil and gas properties		1,264,037
	Depletion and depreciation		––
	Oil and gas property impairment		––
	Balance, August 31, 2013		48,897,972

	Acquisition costs		––
	Expenditures on oil and gas properties		1,408,017
	Depletion and depreciation		––
	Oil and gas property impairment		––
	Balance, August 31, 2014	$	50,305,989

	Total Unproven Properties	As of		2014 Additions		As of
	Total Unproven Properties	31-Aug-13		2014 Additions		31-Aug-14
	Unproven Assets Acquired	$	47,630,084	$	––	$	47,630,084
	Unproven Development Costs		1,267,888		1,408,017		2,675,905
	Total unproven costs	$	48,897 ,972	$	1,408,017	$	50,305,989

5_ASSET_RETIREMENT_OBLIGATIONS

5. ASSET RETIREMENT OBLIGATIONS (Tables)	12 Months Ended
5. ASSET RETIREMENT OBLIGATIONS (Tables)	Aug. 31, 2014
BalanceEnding1	'
Schedule of Asset Retirement Obligation	'
	Asset Retirement Obligations
	Balance, August 31, 2012	$	7,137,716
	Liabilities incurred (acquired)		9,436,526
	Accretion expense		572,508
	Liabilities (settled)		––
	Changes in asset retirement obligations		––
	Balance, August 31, 2013		17,146,750
	Liabilities incurred (acquired)		––
	Accretion expense		692,273
	Liabilities (settled)		––
	Changes in asset retirement obligations		––
	Total Balance, August 31, 2014	$	17,839,023
	Total Balance, August 31, 2014 – Current	$	80,000
	Total Balance, August 31, 2014– Long Term	$	17,759,023

6_CONVERTIBLE_NOTES_PAYABLE_Ta

6. CONVERTIBLE NOTES PAYABLE (Tables)	12 Months Ended
	Aug. 31, 2014
Convertible Notes Payable Tables	'
CONVERTIBLE NOTES PAYABLE	'
	Convertible Notes	Principal		Discount			Balance as of
		Amount					31-Aug-14
	2013 Convertible Note Offering (net of $25,000 principal conversion)	$	2,230,000	$	(233,964	)	$	1,996,036
	2014 Convertible Note Offering		1,400,000		––			1,400,000
	Total convertible notes	$	3,630,000	$	(233,964	)	$	3,396,036

8_CAPITAL_STOCK_AND_STOCKBASED

8. CAPITAL STOCK AND STOCK-BASED COMPENSATION (Tables)

12 Months Ended

Aug. 31, 2014

Aug. 31, 2013

Aug. 31, 2012

Chief Operating Officer Total

Granted to Officers, Directors, and Consultants

Options granted

No. of Shares

Exercise

Vesting

First Date

Expiration Date

Number of Shares

Exercise

First Date

Expiration

Issuable Upon Exercise

Price

Period

Exercisable

Issuable Upon

Price

Vesting

Exercisable

Date

Exercise of Option

Period

100,000

2.3

None

1/15/13

1/15/15

300,000

2.15

None

8/27/12

8/27/14

100,000

2.5

1 Year

1/14/14

1/15/16

300,000

2.3

6 Months

2/27/13

8/27/14

100,000

2.75

2 Years

1/14/15

1/15/17

300,000

2.5

2 Years

8/27/14

8/27/17

100,000

2.5 Years

7/14/15

7/15/17

300,000

2.65

2 Years

8/27/14

8/27/17

400,000

1,200,000

Option Activity

Options

Weighted-Average

Aggregate Intrinsic value

Weighted-Average

Remaining Contract Term (yrs)

Exercise Price

Outstanding – September 1, 2012

1,200

2.40

Granted

400

2.64

Exercised

––

Forfeited or expired

––

Outstanding – August 31, 2013

1,600

2.46

3.68

$ 0.00

Granted

Exercised

––

Forfeited or expired

-600

2.22

Outstanding – August 31, 2014

1,000

2.6

2.49

Exercisable – August 31, 2014

800

2.53

2.46

9_INCOME_TAXES_Tables

9. INCOME TAXES (Tables)	12 Months Ended
9. INCOME TAXES (Tables)	Aug. 31, 2014
Income Taxes Tables	'
Provision for Federal income tax	'
		Canadian			United States			Canadian			United States
		Year Ended			Year Ended			Year Ended			Year Ended
		August 31,			August 31,			August 31,			August 31,
		2014			2014			2013			2013

	Net income (loss) before taxes	$	(946,968	)	$	(3,291,079	)	$	10,511,160	)	$	(3,928,955	)

	Statutory tax rates		30	%		35	%		30	%		35	%

	Computed tax benefit (provision) at statuary rates		284,090			1,151,878			(3,153,348	)		1,375,134
	Net operating loss carry forward		795,844			905,121			373,499			1,515,240
	Valuation allowance		(562,349	)		(2,056,999	)					(2,890,374	)
	Provision for income taxes	$	517,585		$	-		$	(2,779,849	)	$	––
Net deferred tax assets	'
		Canadian			United States			Canadian			United States
		Year Ended			Year Ended			Year Ended August 31,			Year Ended
		August 31,			August 31,			2013			August 31,
		2014			2014						2013

	Deferred income tax assets:
	Impairment	$	––		$	307,998		$	––		$	307,998
	Organization costs		––			62,847			––			68,312
	Accrued salaries		––			36,242			––			36,242
	US net operating loss carryforwards		––			2,630,415			––			1,339,258
	Canadian net operating loss carryforwards		2,165,830			––			517,585			––
	Asset retirement obligation		207,682			––			––			––
	Stock compensation		––			1,909,847			––			1,138,564
	Total deferred income tax assets		2,373,512			4,947,349			517,585			2,890,374

	Deferred income tax liabilities:
	Gain on acquisition of assets	$	(3,297,434	)	$	––		$	(3,297,434	)	$	––
	Depreciation		(1,455,790	)		––			––			––
	Development expense		(355,373	)		––			––			––
	Total deferred income tax liabilities		(5,108,597	)		––			(3,297,434	)		––

	Total net deferred income tax asset (liability)	$	(2,735,085	)	$	4,947,349		$	(2,779,849	)	$	2,890,374
	Less: valuation allowance		(562,349	)		(4,947,349	)		––			(2,890,374	)
	Deferred income tax asset (liability)	$	(3,297,434	)	$	––		$	(2,779,849	)	$	––

4_OIL_AND_GAS_PROPERTIES_Detai

4. OIL AND GAS PROPERTIES (Details) (USD $)	Aug. 31, 2014
Unproven Properties	'
Unproved Leasehold costs	$28,375,788
Plant and equipment	15,078,363
Gathering systems	4,171,406
Vehicles	4,527
Subtotal	47,630,084
Goodwill	1,194,365
Total Assets Acquired - KGP	48,824,449
Nahanni Assets	'
Unproven Properties	'
Unproved Leasehold costs	14,548,787
Plant and equipment	8,594,362
Gathering systems	2,383,405
Vehicles	0
Subtotal	25,526,554
Goodwill	0
Total Assets Acquired - KGP	25,526,554
Devon Assets	'
Unproven Properties	'
Unproved Leasehold costs	13,827,001
Plant and equipment	6,484,001
Gathering systems	1,788,001
Vehicles	4,527
Subtotal	22,103,530
Goodwill	1,194,365
Total Assets Acquired - KGP	$23,297,895

4_OIL_AND_GAS_PROPERTIES_Capit

4. OIL AND GAS PROPERTIES: Capitalized acquisition, exploration and development costs (Details) (USD $)	12 Months Ended		73 Months Ended
	Aug. 31, 2014	Aug. 31, 2013	Aug. 31, 2014
Oil and gas property impairment	$0	$0	$879,994
KGP	'	'	'
KGP b Unproven Properties, beginning balance	48,897,972	22,107,381	'
Acquisition costs	0	25,526,554	'
Expenditures on oil and gas properties	1,408,017	1,264,037	'
Depletion and depreciation	0	0	'
Oil and gas property impairment	0	0	'
KGP b Unproven Properties, ending balance	$50,305,989	$48,897,972	$50,305,989

5_ASSET_RETIREMENT_OBLIGATIONS1

5. ASSET RETIREMENT OBLIGATIONS (Details) (USD $)	12 Months Ended
5. ASSET RETIREMENT OBLIGATIONS (Details) (USD $)	Aug. 31, 2014	Aug. 31, 2013
Asset Retirement Obligations	'	'
Asset Retirement Obligation, Beginning	$17,146,750	$7,137,716
Liabilities incurred (acquired)	0	9,436,526
Accretion expense	692,273	572,508
Liabilities (settled)	'	0
Changes in asset retirement obligations	'	0
Asset Retirement Obligation, Ending	17,839,023	17,146,750
Total Balance, Current	80,000	80,000
Total Balance, Long Term	$17,759,023	$17,066,750

7_RELATED_PARTY_TRANSACTIONS_D

7. RELATED PARTY TRANSACTIONS (Details Narrative) (USD $)	12 Months Ended
7. RELATED PARTY TRANSACTIONS (Details Narrative) (USD $)	Aug. 31, 2014	Aug. 31, 2013
Entity controlled by the CompanyBs Chief Executive Officer	'	'
Expense transaction with related party	$240,000	$240,000
Amount owed to related party	50,000	100,000
Chief Financial Officer	'	'
Expense transaction with related party	172,350	227,272
Amount owed to related party	9,750	6,654
Entity controlled by the CompanyBs President	'	'
Expense transaction with related party	83,193	108,424
Chief Operating Officer Total	'	'
Expense transaction with related party	297,810	190,624
Amount owed to related party	$7,480	$13,541

8_CAPITAL_STOCK_AND_STOCKBASED1

8. CAPITAL STOCK AND STOCK-BASED COMPENSATION (Details) (Granted to Officers, Directors, and Consultants, USD $)	12 Months Ended
	Aug. 31, 2012
Outstanding, ending	1,200,000
Stock Option 1	'
Outstanding, ending	300,000
Weighted Average Exercise Price Outstanding, Ending	$2.15
Vesting period	'0 days
First Date Exercisable	'8/27/2012
Expiration Date	'8/27/2014
Stock Option 2	'
Outstanding, ending	300,000
Weighted Average Exercise Price Outstanding, Ending	$2.30
Vesting period	'6 months
First Date Exercisable	'2/27/2013
Expiration Date	'8/27/2014
Stock Option 3	'
Outstanding, ending	300,000
Weighted Average Exercise Price Outstanding, Ending	$2.50
Vesting period	'2 years
First Date Exercisable	'8/27/2014
Expiration Date	'8/27/2017
Stock Option 4	'
Outstanding, ending	300,000
Weighted Average Exercise Price Outstanding, Ending	$2.65
Vesting period	'2 years
First Date Exercisable	'8/27/2014
Expiration Date	'8/27/2017

8_CAPITAL_STOCK_AND_STOCKBASED2

8. CAPITAL STOCK AND STOCK-BASED COMPENSATION (Details 1) (Chief Operating Officer Total, USD $)	12 Months Ended
	Aug. 31, 2013
Outstanding, ending	400,000
Stock Option A	'
Outstanding, ending	100,000
Weighted Average Exercise Price Outstanding, Ending	$2.30
Vesting period	'0 days
First Date Exercisable	'1/15/2013
Expiration Date	'1/15/2015
Stock Option B	'
Outstanding, ending	100,000
Weighted Average Exercise Price Outstanding, Ending	$2.50
Vesting period	'1 year
First Date Exercisable	'1/14/2014
Expiration Date	'1/15/2016
Stock Option C	'
Outstanding, ending	100,000
Weighted Average Exercise Price Outstanding, Ending	$2.75
Vesting period	'2 years
First Date Exercisable	'1/14/2015
Expiration Date	'1/15/2017
Stock Option D	'
Outstanding, ending	100,000
Weighted Average Exercise Price Outstanding, Ending	$3
Vesting period	'2 years 6 months
First Date Exercisable	'7/14/2015
Expiration Date	'7/15/2017

8_CAPITAL_STOCK_AND_STOCK_BASE1

8. CAPITAL STOCK AND STOCK BASED COMPENSATION (Details 2) (Stock Option, USD $)	12 Months Ended
	Aug. 31, 2014	Aug. 31, 2013
Stock Option	'	'
Outstanding, beginning	1,600	1,200
Number of Options Granted	'	400
Number of Options Exercised	0	0
Number of Options Forfeited or Expired	-600	0
Outstanding, ending	1,000	1,600
Number of Options Exercisable	800	'
Weighted Average Exercise Price Outstanding, Beginning	$2.46	$2.40
Weighted Average Exercise Price Granted	'	$2.64
Weighted Average Exercise Price Exercised	'	$0
Weighted Average Exercise Price Forfeited or Expired	$2.22	$0
Weighted Average Exercise Price Outstanding, Ending	$2.60	$2.46
Weighted Average Exercise Price Exercisable	$2.53	'
Weighted Average Remaining Contractual Life (in years) Outstanding	'2 years 5 months 26 days	'3 years 8 months 5 days
Weighted Average Remaining Contractual Life (in years) Exercisable	'2 years 5 months 16 days	'
Aggregate Intrinsic Value Outstanding	$0	$0
Aggregate Intrinsic Value Exercisable	$0	'

8_CAPITAL_STOCK_AND_STOCK_BASE2

8. CAPITAL STOCK AND STOCK BASED COMPENSATION (Details Narrative) (USD $)	12 Months Ended
	Aug. 31, 2014	Aug. 31, 2013
CapitalStockAndStockBasedCompensationDetailsNarrativeAbstract	'	'
Non-cash expense related to stock-based compensation	$437,107	$714,665
Unrecognized compensation cost remaining under Option Plan	'	$46,798

9_INCOME_TAXES_Details

9. INCOME TAXES (Details) (USD $)	12 Months Ended
	Aug. 31, 2014	Aug. 31, 2014	Aug. 31, 2013	Aug. 31, 2013
	Canadian	United States	Canadian	United States
Net income (loss) before taxes	($946,968)	($3,291,079)	$10,511,160	($3,928,955)
Statutory tax rates	30.00%	35.00%	30.00%	35.00%
Computed tax benefit (provision) at statuary rates	284,090	1,151,878	-3,153,348	1,375,134
Net Operating Loss Carry Forward	795,844	905,121	373,499	1,515,240
Valuation Allowance	-562,349	-2,056,999	'	-2,890,374
Provision for income taxes	$517,585	$0	($2,779,849)	$0

9_INCOME_TAXES_Details_1

9. INCOME TAXES (Details 1) (USD $)	Aug. 31, 2014	Aug. 31, 2014	Aug. 31, 2013	Aug. 31, 2013
9. INCOME TAXES (Details 1) (USD $)	Canadian	United States	Canadian	United States
Deferred income tax assets:	'	'	'	'
Impairment	$0	$307,998	$0	$307,998
Organization costs	0	62,847	0	68,312
Accrued salaries	0	36,242	0	36,242
US net operating loss carryforwards	0	2,630,415	0	1,339,258
Canadian net operating loss carryforwards	2,165,830	0	517,585	0
Asset retirement obligation	207,682	0	'	'
Stock Compensation	0	1,909,847	0	1,138,564
Total deferred income tax assets	2,373,512	4,947,349	517,585	2,890,374
Deferred income tax liabilities:	'	'	'	'
Gain on acquisition of assets	-3,297,434	0	0	0
Depreciation	-1,455,790	0	'	'
Development expense	-355,373	0	'	'
Total deferred income tax liabilities	-5,108,597	0	0	0
Total net deferred income tax asset (liability)	-2,735,085	4,947,349	-2,779,849	2,890,374
Less: valuation allowance	-562,349	-4,947,349	0	-2,890,374
Deferred income tax asset (liability)	($3,297,434)	$0	($2,779,849)	$0