Graphene & Solar Technologies Limited (GSTX) 10-Q/A 19 May 14 2014 Q2 Quarterly report (amended) Financial data

Document_and_Entity_Informatio

Document and Entity Information	6 Months Ended
	Mar. 31, 2014
Document And Entity Information	'
Entity Registrant Name	'Vanguard Energy Corp
Entity Central Index Key	'0001497649
Document Type	'10-Q
Document Period End Date	31-Mar-14
Amendment Flag	'false
Current Fiscal Year End Date	'--09-30
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 Common Stock, Shares Outstanding	12,711,440
Document Fiscal Period Focus	'Q2
Document Fiscal Year Focus	'2014

CONSOLIDATED_BALANCE_SHEETS

CONSOLIDATED BALANCE SHEETS (USD $)	Mar. 31, 2014	Sep. 30, 2013
Statement of Financial Position [Abstract]	'	'
Cash and cash equivalents	$139,580	$1,334,285
Accounts receivable	309,492	371,765
Other assets	26,182	16,055
Total current assets	475,254	1,722,105
Property and equipment - Oil and gas, on the basis of full cost accounting	'	'
Proved properties	14,031,399	12,994,766
Unproved properties and properties under development, not being amortized	'	61,470
Furniture and equipment	'	26,946
Less: accumulated depreciation, depletion and amortization	-8,452,368	-6,594,081
Total property and equipment	5,579,031	6,489,101
Debt issuance costs	384,786	538,700
Other assets	6,488	10,808
Total assets	6,445,559	8,760,714
LIABILITIES AND STOCKHOLDERS' EQUITY	'	'
Accounts payable	151,156	113,314
Other liabilities	325,239	322,194
Current notes payable, net of discount of $329,380 and $0	7,925,120	'
Total current liabilities	8,401,515	435,508
Notes payable, net of discount of $0 and $542,961	'	7,813,368
Participation liability	402,391	465,551
Asset retirement obligations	187,601	177,685
Total liabilities	8,991,507	8,892,112
Commitments and contingencies	'	'
Stockholders' equity	'	'
Preferred stock, $0.00001 par value; 5,000,000 shares authorized, none issued or outstanding	'	'
Common stock, $0.00001 par value; 50,000,000 shares authorized, 12,741,512 shares issued and outstanding	127	127
Additional paid-in capital	5,522,204	5,522,204
Accumulated deficit	-8,068,279	-5,653,729
Total stockholders' equity	-2,545,948	-131,398
Total liabilities and stockholders' equity	$6,445,559	$8,760,714

CONSOLIDATED_BALANCE_SHEETS_Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Mar. 31, 2014	Sep. 30, 2013
Statement of Financial Position [Abstract]	'	'
Discount on Note Payable Current portion	$329,380	$0
Discount on Note Payable	$0	$542,961
Stockholders' equity	'	'
Preferred stock, par value	$0.00	$0.00
Preferred stock, authorized shares	5,000,000	5,000,000
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Common stock, par value	$0.00	$0.00
Common stock, authorized shares	50,000,000	50,000,000
Common stock, issued shares	12,741,512	12,741,512
Common stock, outstanding shares	12,741,512	12,741,512

CONSOLIDATED_STATEMENT_OF_OPER

CONSOLIDATED STATEMENT OF OPERATIONS (USD $)	3 Months Ended		6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Revenues	'	'	'	'
Oil and gas sales	$790,671	$1,249,353	$1,521,937	$2,565,014
Costs and expenses	'	'	'	'
Lease operating expense	292,239	193,074	497,637	370,517
Production taxes	36,436	57,601	70,155	118,260
Depreciation, depletion and amortization	539,472	282,095	984,200	651,431
Impairment of O&G properties	880,213	'	880,213	'
Asset retirement obligation accretion	13,371	4,799	29,088	9,273
General and administrative	312,723	415,354	552,906	823,004
Total costs and expenses	2,074,454	952,923	3,014,199	1,972,485
Income (loss) from operations	-1,283,783	296,430	-1,492,262	592,529
Other income (expense)	'	'	'	'
Other income	360	'	792	'
Interest income	30	332	234	858
Interest expense	-453,995	-461,206	-902,494	-990,000
Furniture and equipment write-down	'	'	-20,819	'
Change in fair value of warrant and conversion feature liabilities	'	155,256	'	598,193
Total other income (expense)	-453,605	-305,618	-922,287	-390,949
Income (loss) before income taxes	-1,737,388	-9,188	-2,414,549	201,580
Provision for income taxes	'	'	'	'
Net income (loss)	($1,737,388)	($9,188)	($2,414,549)	$201,580
Earnings (loss) per share	'	'	'	'
Basic	($0.14)	$0	($0.19)	$0.02
Diluted	($0.14)	$0	($0.19)	$0.02
Weighted average shares outstanding	'	'	'	'
Basic	12,741,512	12,741,512	12,741,512	12,741,512
Diluted	12,741,512	12,741,512	12,741,512	12,741,512

CONSOLIDATED_STATEMENTS_OF_CAS

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Cash flows from operating activities:	'	'
Net Income (loss)	($2,414,549)	$201,580
Adjustments to reconcile net income/(loss) to net cash from operating activities:	'	'
Depreciation, depletion and amortization	984,200	651,431
Impairment of O&G properties	880,213	'
Amortization of debt issuance costs	153,914	164,798
Asset retirement obligation accretion	29,088	9,273
Amortization of debt discount	111,752	170,371
Accretion of participation liability	-63,160	75,178
Furniture and equipment write-down	20,819	'
Change in fair value of warrant and conversion feature liabilities	'	-598,193
Change in operating assets and liabilities:	'	'
Accounts receivable	62,273	89,378
Other assets	-5,807	-28,988
Accounts payable	1,653	-67,594
Other liabilities	3,045	-136,848
Net cash from operating activities	-236,559	530,386
Cash flows from investing activities	'	'
Purchase of furniture and equipment	'	-2,452
Capital expenditures on oil and gas properties	-958,146	-2,037,209
Net cash from investing activities	-958,146	-2,039,661
Cash flows from financing activities	'	'
Repayment of note payable	'	-325,000
Net cash from financing activities	'	-325,000
Net change in cash and cash equivalents	-1,194,705	-1,834,275
Cash and cash equivalents Beginning of period	1,334,285	3,090,422
Cash and cash equivalents End of period	$139,580	$1,256,147

1_BASIS_OF_PRESENTATION

1. BASIS OF PRESENTATION	6 Months Ended
	Mar. 31, 2014
Notes to Financial Statements	'
1. BASIS OF PRESENTATION	'
	NOTE 1 – BASIS OF PRESENTATION
	These consolidated financial statements of Vanguard Energy Corporation (Vanguard or the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). In the opinion of management, these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. Certain information, accounting policies and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to Securities and Exchange Commission (SEC) rules and regulations. These financial statements should be read along with Vanguard’s audited financial statements as of September 30, 2013.
	Default on 2012 Convertible Promissory Notes and Pending Sale of Oil & Gas Properties – On March 31, 2014 the Company failed to make the scheduled interest payments on its 2012 Convertible Promissory Notes. As a result, the note holders are entitled to declare the notes in default, in which case the principal amount of the notes, plus all accrued and unpaid interest would be immediately due and payable.  For this reason, the 2012 Convertible Promissory Notes are classified as current obligations within the consolidated balance sheet at March 31, 2014.
	The Company’s inability to make the interest payment to the note holders was the result of the expenditure of considerable capital to work over some of the Company’s wells.  The costs of that work far exceeded the Company’s expectations and yet the work was required in order to get the wells back into production.  This depleted the Company’s cash position far below its expectations.  Further, although the initial work on those wells was successful in boosting production momentarily, further complications resulted in lower production than anticipated, which has not been adequate to replenish the cash expended and enable the Company to make required interest payments.
	With a view to paying its note holders, the Company has entered into an agreement to sell all of its oil and gas properties to Vast Petroleum Corporation (Vast) for $5,500,000.  The sale of the Company’s oil and gas properties to Vast is contingent upon a number of conditions, including the following:
	●	the approval of the sale by the holders of a majority of the Company’s outstanding shares of common stock;
	●	the approval of note holders owning notes in the principal amount of approximately $5,505,700; and
	●	the approval of holders owning a majority of the membership interests in Vanguard Net Profits, LLC to sell the net profit interests to the Company for $230,619.
	The transaction is expected to close by the end of May 2014 and be effective as of April 1, 2014. The sale of the Company’s oil and gas properties would represent the sale of substantially all of the Company’s assets.  An impairment charge of $880,213 was recognized during the quarter ended March 31, 2014 for the amount by which the carrying value of the Company’s oil and gas properties exceeded the estimated net proceeds from the planned sale.
	If the transaction with Vast is completed, the Company plans to use the proceeds from the sale to purchase the net profits interest held by Vanguard Net Profits, LLC for $230,619 and pay the balance to the holders of the secured notes.  The amount which will be paid to the note holders from the sale of the Company’s oil and gas properties will be less than the amount owed to the note holders.  In consideration for  accepting less than the full amount due on their notes, and releasing their lien on the Company’s oil and gas properties, the note holders, as a group, are expected to receive shares in the Company’s stock which shares, when issued, will represent 90% of the Company’s issued and outstanding shares.
	Going Concern – The above actions and events raise substantial doubt as to the ability of the Company to continue as a going concern.  The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business.

2_SUMMARY_OF_SIGNIFICANT_ACCOU

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Mar. 31, 2014
Notes to Financial Statements	'
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	'
	NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
	As of March 31, 2014, Vanguard’s significant accounting policies were consistent with those discussed in the audited financial statements as of September 30, 2013.
	Earnings Per Share – Basic earnings per share have been calculated based upon the weighted-average number of common shares outstanding.  Diluted earnings per share have been calculated based upon the weighted-average number of common and potential common shares. The calculation of diluted weighted-average shares outstanding for the three-month periods ended March 31, 2014 and 2013 excludes 19,261,860 and 17,610,960 shares, respectively, issuable pursuant to outstanding warrants, stock options and debt conversion features because their effect is anti-dilutive.
	Recently Issued Accounting Pronouncements – Various accounting standards updates have been recently issued, most of which represented technical corrections to the accounting literature or were applicable to specific industries.  No new accounting pronouncements have been issued that are likely to have a material impact to the Company's consolidated financial statements.

3_OIL_AND_GAS_ACQUISITIONS

3. OIL AND GAS ACQUISITIONS	6 Months Ended
	Mar. 31, 2014
Notes to Financial Statements	'
3. OIL AND GAS ACQUISITIONS	'
	NOTE 3 – OIL AND GAS ACQUISITIONS
	By agreement dated March 15, 2011, the Company entered into a farmout agreement with an unrelated third party pertaining to a 100-acre lease in the Batson Dome Field. As of March 31, 2014, the Company had drilled five wells on the lease. Pursuant to the farmout agreement, as amended in January 2013, the Company has the option of drilling additional wells on the lease; provided however, that if it does not drill at least three wells in any twelve month period the right to drill any additional wells on the lease will terminate. As of March 31, 2014, the Company has not drilled any wells on the property in the last 12 months effectively terminating the lease.
	By agreement dated May 25, 2011, the Company entered into a farmout agreement with an unrelated third party pertaining to a 100-acre lease in the Batson Dome Field. Pursuant to the agreement, the Company had the obligation to commence drilling a well on the lease by June 14, 2012.  In June 2012, the Company paid $10,000 to extend the agreement, whereby it had an obligation to commence drilling by June 14, 2013. The Company requested that this agreement be extended for another year for payment of $10,000, which was approved in November 2013.   The Company is subject to commence drilling of the first well by June 14, 2014, and completing the well if warranted. The Company has the option of drilling additional wells on the lease; provided however, that unless the Company commences drilling each well within 180 days of the date the latest well is completed or abandoned, the right to drill any additional wells on the lease will terminate. The estimated cost of drilling and completing any well on this lease is approximately $1,000,000. As of March 31, 2014 the Company has not drilled any wells on this lease and will not drill any wells prior to the expiration date of June 14, 2014.
	By agreement dated January 6, 2012, the Company entered into a three-year farmout agreement with an unrelated third party pertaining to another 70-acre lease in the Batson Dome Field.  The estimated cost of drilling and completing any well on this lease is approximately $1,000,000.
	By agreement dated May 1, 2012, the Company entered into a farmout agreement with an unrelated third party pertaining to another 45-acre lease in the Hull-Daisetta Field. Pursuant to the agreement, the Company had the obligation to commence drilling a well on the lease by January 31, 2013.  In January 2013, the agreement was amended, whereby the Company now has an obligation to commence drilling by January 31, 2014.     The lease has expired as of January 31, 2014, as the Company did not drill any wells on this lease.
	Through certain acquisitions in 2010, the Company owns a ninety percent (90%) working interest in mineral leases for 230 acres in the Batson Dome Field. C.F.O., Inc. owns the remaining ten percent (10%) working interest and is the operator for the mineral leases pursuant to a joint operating agreement between the Company and C.F.O., Inc.  C.F.O., Inc. is controlled by Delton Drum, an officer of the Company since 2010.  The Company has recorded a receivable from C.F.O., Inc. for its 10% share of capital expenditures.  At March 31, 2014, this amount totaled $1,757 which was paid in full in April 2014.

4_LONGTERM_DEBT

4. LONG-TERM DEBT	6 Months Ended
	Mar. 31, 2014
Notes to Financial Statements	'
4. LONG-TERM DEBT	'
	NOTE 4 – LONG-TERM DEBT
	2010 Convertible Promissory Notes – In December 2010, the Company completed the sale of $3,400,000 in Convertible Promissory Notes, due and payable on October 31, 2012 and convertible, at the holder’s option, into common stock of the Company at $1.00 per share at any time after April 30, 2011.  The 2010 Convertible Promissory Notes bore interest at 8% per year, payable quarterly.  In addition, the note holders were issued 1,700,000 Series A warrants to purchase the Company’s common stock at $4.00 per share any time on or before October 31, 2014 and were additionally granted a twenty percent (20%) net profits interest payable quarterly from any net profits generated from wells drilled and completed with the proceeds of the notes.
	During 2012, $3,075,000 of the 2010 Convertible Promissory Notes outstanding was surrendered in exchange for new 2012 Convertible Promissory Notes as discussed below. The remaining notes, which had an outstanding principal balance of $325,000, were repaid in October 2012.
	2012 Convertible Promissory Notes – During 2012, the Company sold $8,254,500 of Convertible Promissory Notes, due and payable on June 30, 2015 and convertible at the holder’s option, into common stock of the Company at $1.25 per share.  The Convertible Promissory Notes bear interest at 15% per year, payable quarterly. Of the total amount raised, $5,179,500 represented new cash investors and $3,075,000 represented investors from the 2010 convertible note offering who chose to roll their investment in that earlier offering into the Company's new offering. Net proceeds from this financing:
	●	were used to pay the 2010 Convertible Promissory Notes remaining outstanding on October 31, 2012 ($325,000), and
	●	have been used to fund an accelerated developmental drilling program in the Company's oil fields located in Southeast Texas
	Except in certain circumstances, the conversion price of the 2012 Convertible Promissory Notes will be lowered if the Company sells any additional shares of common stock or any securities convertible into common stock, at a price below the then applicable conversion price.  The conversion price will also be proportionately adjusted in the event of any stock split, or capital reorganization.  The Company may prepay the Notes upon twenty days written notice to the Note holders.
	Direct costs of $813,780 were incurred in connection with the issuance of the 2012 Convertible Promissory Notes.  The Company recognized a loss on debt extinguishment of $410,639 related to the investors who chose to roll their investment in the 2010 Convertible Promissory Notes into the new offering. The placement agents for this offering received a cash commission of $619,905 as well as 537,360 Series E warrants. Each Series E warrant entitles the holder to purchase one share of the Company’s common stock. The Series E warrants may be exercised at any time on or before June 30, 2017 at a price of $1.55 per share.
	The Company’s gross outstanding balance of the 2012 Convertible Promissory Notes was $8,254,500 as of March 31, 2014.  As of March 31, 2014, the unamortized discount on the 2012 Convertible Promissory Notes totaled $329,380.  Interest expense for the amortization of debt issuance cost and discount on the notes for the six-month period ended March 31, 2014 was $265,666.  The effective interest rate of the 2012 Convertible Promissory Notes was 17.71% as of March 31, 2014.  Accrued interest included in Other Liabilities at March 31, 2014 and 2013 was $309,544.
	Net Profits Interest Participation Liability – The 20% net profits interest granted with the issuance of the 2010 Convertible Promissory Notes is owned by Vanguard Net Profits, LLC, a Texas limited liability company (the “Fund”). The Company has a 1% interest in the Fund and is the Fund’s manager on behalf of the notes holders who own the remaining interest.
	The Company has recognized a participation liability related to the net profits interest granted.  This participation liability is reflected in the liability section of the balance sheet at its estimated fair value of $402,391 as of March 31, 2014. The Company estimated the fair value of the participation liability utilizing a present value factor of 10 applied to proved developed reserves associated with the wells drilled and completed with the proceeds of the notes.  At any time, the Company may purchase the net profits interests held by the Fund for $3,400,000.
	The Company incurred expense associated with the net profits interest granted during the six-month period ended March 31, 2014 of $63,160. This amount is reported as interest expense in the statement of operations. The Company also made payments of $84,577 under this arrangement during the six-month period ended March 31, 2014.

5_INCOME_TAXES

5. INCOME TAXES	6 Months Ended
	Mar. 31, 2014
Notes to Financial Statements	'
5. INCOME TAXES	'
	NOTE 5 – INCOME TAXES
	The Company estimates its annual effective income tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which the Company operates. Statutory tax rate changes and other significant or unusual items are recognized as discrete items in the quarter in which they occur. The Company recorded no income tax expense for the three-month period ended March 31, 2014 because the Company estimates it will record no income tax expense for the year ended September 30, 2014.  The Company recorded no income tax expense for the three-month period ended March 31, 2014. The Company has a valuation allowance that fully offsets net deferred tax assets.

6_COMMITMENTS_AND_CONTINGENCIE

6. COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Mar. 31, 2014
Notes to Financial Statements	'
6. COMMITMENTS AND CONTINGENCIES	'
	NOTE 6 – COMMITMENTS AND CONTINGENCIES
	The Company’s material future contractual obligations as of March 31, 2014 were as follows:
		Total		2014		2015		2016		Thereafter
	Convertible notes	$	8,254,500	$	8,254,500		--		--		--
	The contractual maturity of the convertible notes is June 30, 2015.  However, on March 31, 2014 the Company failed to make the scheduled interest payments.  As a result, the note holders are entitled to declare the notes in default, in which case the principal amount of the notes, plus all accrued and unpaid interest would be immediately due and payable.
	Except as shown above, the Company had no contractual capital commitments outstanding at March 31, 2014.  The Company is presently attempting to sell its Batson Dome field.  Although no sale occurred, the Company spent approximately $960,000 during the six month period ending March 31, 2014 but will not spend any more for the remainder of the fiscal year 2014 for work over of wells in the Batson Dome Field or for various other projects.

7_FAIR_VALUE_OF_FINANCIAL_INST

7. FAIR VALUE OF FINANCIAL INSTRUMENTS	6 Months Ended
	Mar. 31, 2014
Notes to Financial Statements	'
7. FAIR VALUE OF FINANCIAL INSTRUMENTS	'
	NOTE 7 – FAIR VALUE OF FINANCIAL INSTRUMENTS
	The following table summarizes the financial liabilities measured at fair value on a recurring basis as of March 31, 2014 and September 30, 2013:
					31-Mar-14			30-Sep-13
		Level
	Participation liability		3		$	402,391		$	465,551
	Total liabilities				$	402,391		$	465,551
	The following table presents a reconciliation of those liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
		Participation Liability			Total
	Balance at September 30, 2013	$	465,551		$	465,551
	Purchases, issuances and settlements		(63,160	)		(63,160	)
	Balance at March 31, 2014	$	402,391		$	402,391

8_SUPPLEMENTAL_CASH_FLOW_INFOR

8. SUPPLEMENTAL CASH FLOW INFORMATION	6 Months Ended
	Mar. 31, 2014
Notes to Financial Statements	'
8. SUPPLEMENTAL CASH FLOW INFORMATION	'
	NOTE 8 – SUPPLEMENTAL CASH FLOW INFORMATION
		Six Month ended March 31,
		2014			2013
		(Unaudited)			(Unaudited)
	Interest paid	$	681,669		$	603,088
	Interest capitalized (non-cash)		3,677			45,935
	Noncash investing and financing activities:
	Capital expenditures included in accounts payable		(36,189	)		(15,278	)
	Asset retirement obligations incurred		-			9,792

2_SUMMARY_OF_SIGNIFICANT_ACCOU1

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Mar. 31, 2014
Notes to Financial Statements	'
Earnings Per Share	'
	Basic earnings per share have been calculated based upon the weighted-average number of common shares outstanding.  Diluted earnings per share have been calculated based upon the weighted-average number of common and potential common shares. The calculation of diluted weighted-average shares outstanding for the three-month periods ended March 31, 2014 and 2013 excludes 19,261,860 and 17,610,960 shares, respectively, issuable pursuant to outstanding warrants, stock options and debt conversion features because their effect is anti-dilutive.
Recently Issued Accounting Pronouncements	'
	Various accounting standards updates have been recently issued, most of which represented technical corrections to the accounting literature or were applicable to specific industries.  No new accounting pronouncements have been issued that are likely to have a material impact to the Company's consolidated financial statements.

6_COMMITMENTS_AND_CONTINGENCIE1

6. COMMITMENTS AND CONTINGENCIES (Tables)	6 Months Ended
	Mar. 31, 2014
Notes to Financial Statements	'
Schedule of Contractual Obligations	'
	The Company’s material future contractual obligations as of March 31, 2014 were as follows:
		Total		2014		2015		2016		Thereafter
	Convertible notes	$	8,254,500	$	8,254,500		--		--		--

7_FAIR_VALUE_OF_FINANCIAL_INST1

7. FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)	6 Months Ended
	Mar. 31, 2014
Notes to Financial Statements	'
Financial Liabilities	'
	The following table summarizes the financial liabilities measured at fair value on a recurring basis as of March 31, 2014 and September 30, 2013:
					31-Mar-14			30-Sep-13
		Level
	Participation liability		3		$	402,391		$	465,551
	Total liabilities				$	402,391		$	465,551
Liabilities Using Signigicant Unobservable Inputs	'
	The following table presents a reconciliation of those liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
		Participation Liability			Total
	Balance at September 30, 2013	$	465,551		$	465,551
	Purchases, issuances and settlements		(63,160	)		(63,160	)
	Balance at March 31, 2014	$	402,391		$	402,391

8_SUPPLEMENTAL_CASH_FLOW_INFOR1

8. SUPPLEMENTAL CASH FLOW INFORMATION (Tables)	6 Months Ended
	Mar. 31, 2014
Notes to Financial Statements	'
Supplemental Cash Flow Information	'
		Six Month ended March 31,
		2014			2013
		(Unaudited)			(Unaudited)
	Interest paid	$	681,669		$	603,088
	Interest capitalized (non-cash)		3,677			45,935
	Noncash investing and financing activities:
	Capital expenditures included in accounts payable		(36,189	)		(15,278
	Asset retirement obligations incurred		-			9,792

1_BASIS_OF_PRESENTATION_Detail

1. BASIS OF PRESENTATION (Details Narrative) (USD $)	3 Months Ended
	Mar. 31, 2014
Basis Of Presentation Details Narrative	'
Impairment charge	$880,213

2_SUMMARY_OF_SIGNIFICANT_ACCOU2

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Summary Of Significant Accounting Policies Details Narrative	'	'
Anti-dilutive shares	19,261,860	17,610,960

3_OIL_AND_GAS_ACQUISITIONS_Det

3. OIL AND GAS ACQUISITIONS (Details Narrative) (USD $)	Mar. 31, 2014
Oil And Gas Acquisitions Details Narrative	'
Receivable from CFO, Inc. 10% share of capital expenditures	$1,757

4_LONGTERM_DEBT_Details_Narrat

4. LONG-TERM DEBT (Details Narrative) (USD $)	6 Months Ended
	Mar. 31, 2014	Sep. 30, 2013	Mar. 31, 2013
Long-Term Debt Details Narrative	'	'	'
Convertible Notes Payable	$8,254,500	'	'
Discount on Note Payable	0	542,961	'
Interest expense of debt issuance costs and discount	265,666	'	'
Combined effective interest rate	17.71%	'	'
Accrued interest included in Other Liabilities	309,544	'	309,544
Participation Liability Fair Value	402,391	'	'
Net profits interest granted expenses	63,160	'	'
Payments under participation arrangement	$84,577	'	'

6_COMMITMENTS_AND_CONTINGENCIE2

6. COMMITMENTS AND CONTINGENCIES (Details) (USD $)	Mar. 31, 2014
Notes to Financial Statements	'
Convertible notes, 2014	$8,254,500
Convertible notes, 2015	'
Convertible notes, 2016	'
Convertible notes, thereafter	'
Total convertible notes due	$8,254,500

7_FAIR_VALUE_OF_FINANCIAL_INST2

7. FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) (USD $)	Mar. 31, 2014	Sep. 30, 2013
Notes to Financial Statements	'	'
Participation liability (Level 3)	$402,391	$465,551
Total liabilities (Level 3)	$402,391	$465,551

7_FAIR_VALUE_OF_FINANCIAL_INST3

7. FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 1) (USD $)	6 Months Ended
	Mar. 31, 2014
Balance at September 30,2013	$465,551
Purchases, issuances and settlements	-63,160
Balance at March 31, 2014	402,391
Participation Liability	'
Balance at September 30,2013	465,551
Purchases, issuances and settlements	-63,160
Balance at March 31, 2014	$402,391

8_SUPPLEMENTAL_CASH_FLOW_INFOR2

8. SUPPLEMENTAL CASH FLOW INFORMATION (Details) (USD $)	6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Supplemental cash flow information:	'	'
Interest paid	$681,669	$603,088
Interest capitalized (non-cash)	3,677	45,935
Noncash investing and financing activities:	'	'
Capital expenditures included in accounts payable	-36,189	-15,278
Asset retirement obligations incurred	'	$9,792