| Organization, Nature of Operations and Summary of Significant Accounting Policies | Note 1 – Organization, Nature of Operations
and Summary of Significant Accounting Policies International Western Petroleum, Inc. (“IWP”
or the “Company”) was incorporated on February 19, 2014, as a Nevada corporation. The Company was formed to conduct
exploration, development and production operations in the oil and gas industry. The accompanying unaudited interim financial
statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of
America and the rules of the Securities and Exchange Commission and should be read in conjunction with the audited financial statements
and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended February 28,
2017. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation
of the financial position and the results of operations for the interim periods presented have been reflected herein. The results
of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the
unaudited interim financial statements that would substantially duplicate the disclosures contained in the audited financial statements
for the most recent fiscal year as reported in the Form 10-K have been omitted. Use of Estimates The preparation of financial statements in
conformity with accounting principles generally accepted in the United States of America requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
as of the date of the financial statements and the reported amounts of revenues and expense during the period. Actual results could
differ from those estimates. Fair Value of Financial Instruments The carrying amount of the Company’s
accounts payable and accrued expenses and advances from officer approximates its estimated fair value due to the short-term nature
of that financial instrument. Cash and Cash Equivalents The Company considers all highly liquid investments
purchased with an original maturity of three months or less to be cash equivalents. The Company had $557,302 and $76,365 of cash
and cash equivalents at August 31, 2017 and February 28, 2017, respectively. Concentrations of Credit Risk Financial instruments which potentially subject
the Company to concentrations of credit risk include cash deposits placed with financial institutions. The Company maintains its
cash in bank accounts which, at times, may exceed federally insured limits as guaranteed by the Federal Deposit Insurance Corporation
(FDIC). At August 31, 2017, $307,302 of the Company’s cash balances were uninsured. The Company has not experienced any losses
on such accounts. Accounts Receivable Accounts receivable typically consist of oil
and gas receivables. The Company has classified these as short-term assets in the balance sheet because the Company expects repayment
or recovery within the next 12 months. The Company evaluates these accounts receivable for collectability considering the results
of operations of these related entities and when necessary records allowances for expected unrecoverable amounts. To date, no allowances
have been recorded. Oil & Gas Properties The Company follows the full cost method of
accounting for its investments in oil and gas properties, whereby all costs incurred in connection with the acquisition, exploration
for and development of petroleum and natural gas reserves, including unproductive wells, are capitalized. Such costs include lease
acquisition, geological and geophysical activities, rentals on non-producing leases, drilling, completing and equipping of oil
and gas wells and administrative costs directly attributable to those activities, and asset retirement costs. General and administrative
costs related to production and general overhead are expensed as incurred. Disposition of oil and gas properties are accounted
for as a reduction of capitalized costs, with no gain or loss recognized unless such adjustment would significantly alter the relationship
between capital costs and proved reserves of oil, in which case the gain or loss is recognized in the statement of operations. Future development, site restoration, dismantlement
and abandonment costs, are estimated property by property, based upon current economic conditions and regulatory requirements,
and are included in amortization of our oil and natural gas property costs. Depletion of capitalized oil properties and
estimated future development costs, excluding unproved properties, are based on the unit-of-production method based on proved reserves. At the end of each quarter, the unamortized
cost of oil and natural gas properties, net of related deferred income taxes, is limited to the sum of the estimated future after-tax
net revenues from proved properties, after giving effect to cash flow hedge positions, discounted at 10%, and the lower of cost
or fair value of unproved properties, adjusted for related income tax effects. This limitation is known as the “ceiling test,”
and is based on SEC rules for the full cost oil and gas accounting method. There was no ceiling test write-down recorded during
the three and six months ended August 31, 2017 and 2016. The Company assesses the carrying value of
its unproved properties for impairment periodically. If the results of an assessment indicate that an unproved property is impaired
(which was assessed in connection with the Company’s evaluation of goodwill impairment), then the carrying value of the unproved
properties is added to the proved oil property costs to be amortized and subject to the ceiling test. Fixed asset Fixed asset is stated at cost and depreciated
using the straight-line method over the five-year estimated useful life of the asset. Asset Retirement Obligations If a reasonable estimate of the fair value
of an obligation to perform site reclamation, dismantle facilities or plug and abandon wells can be made, the Company will record
a liability (an asset retirement obligation or “ARO”) on its consolidated balance sheet and capitalize the present
value of the asset retirement cost in oil and gas properties in the period in which the retirement obligation is incurred. In general,
the amount of an ARO and the costs capitalized will be equal to the estimated future cost to satisfy the abandonment obligation
assuming the normal operation of the asset, using current prices that are escalated by an assumed inflation factor up to the estimated
settlement date, which is then discounted back to the date that the abandonment obligation was incurred using an assumed cost of
funds for the Company. After recording these amounts, the ARO will be accreted to its future estimated value using the same assumed
cost of funds and the capitalized costs are depreciated on a unit-of-production basis over the estimated proved developed reserves.
Both the accretion and the depreciation will be included in depreciation, depletion and amortization expense on our consolidated
statements of operations. Revenue Recognition All revenue is recognized when persuasive evidence
of an arrangement exists, the service or sale is complete, the price is fixed or determinable and collectability is reasonably
assured. Revenue is derived from the sale of crude oil and natural gas. Revenue from crude oil and natural gas sales is recognized
when the product is delivered to the purchaser and collectability is reasonably assured. The Company follows the “sales method”
of accounting for oil and natural gas revenue, so it recognizes revenue on all natural gas or crude oil sold to purchasers, regardless
of whether the sales are proportionate to its ownership in the property. A receivable or liability is recognized only to the extent
that the Company has an imbalance on a specific property greater than its share of the expected remaining proved reserves. If collection
is uncertain, revenue is recognized when cash is collected. Income Taxes Income taxes are accounted for in accordance
with the provisions of ASC Topic No. 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable
to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.
Deferred tax assets and liabilities are measured using 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 the enactment date. Valuation allowances are established, when
necessary, to reduce deferred tax assets to the amounts expected to be realized. Stock-Based Compensation The Company measures stock-based compensation
cost at the grant date based on the fair value of the award and recognize it as expense, over the vesting or service period, as
applicable, of the stock award. Basic and Diluted Net Income (Loss) per
Common Share Basic net loss per common share amounts are
computed by dividing the net loss available to International Western Petroleum, Inc. shareholders by the weighted average number
of common shares outstanding over the reporting period. In periods in which the Company reports a net loss, dilutive securities
are excluded from the calculation of diluted earnings per share as the effect would be anti-dilutive. For the six months ended
August 31, 2017 and 2016, there were no potentially dilutive securities outstanding. Reclassifications Certain reclassifications have been made to
amounts in prior periods to conform to the current period presentation. All reclassifications have been applied consistently to
the periods presented. Subsequent Events The Company evaluated all transactions from
August 31, 2017, through the financial statement issuance date for subsequent event disclosure consideration. Recent Accounting Pronouncements The Company does not expect the adoption of
recently issued accounting pronouncements to have a significant impact on its financial position, results of operations or cash
flows. |
