STANDARDIZED MEASURE OF DISCONTINUED FUTURE NET CASH FLOWS FROM ESTIMATED PRODUCTION OF PROVED OIL AND GAS RESERVES

12 Months Ended

Sep. 30, 2013

Standardized Measure Of Discounted Future Net Cash Flows From Estimated Production Of Proved Oil and Gas Reserves [Abstract]

STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS FROM ESTIMATED PRODUCTION OF PROVED OIL AND GAS RESERVES

14. Standardized Measure of Discounted Future Net Cash Flows from Estimated Production OF Proved Oil and Gas Reserves (unaudited)

The standardized measure of discounted future net cash flows from estimated production of proved oil and gas reserves after income taxes is presented in accordance with the provisions of FASB ASC Topic 932, "Extractive Industries – Oil and Gas" (“ASC 932”). In computing this data, assumptions other than those mandated by ASC 932 could produce substantially different results. The Company cautions against viewing this information as a forecast of future economic conditions or revenues. The standardized measure of discounted future net cash flows is determined by using estimated quantities of proved reserves and taking into account the future periods in which they have been projected to be developed and produced. Estimated future production is priced at the average price received for 2013 and 2012 for the amounts at September 30, 2013 and 2012, respectively. The resulting estimated future cash inflows are reduced by estimated future costs to develop and produce the proved reserves. The future pretax net cash flows are then reduced further by deducting future income tax expenses as applicable. The resultant net cash flows are reduced to present value amounts by applying the ASC 932 mandated 10% discount factor.

Standardized Measure of Discounted Future Net Cash Inflows as of September 30, 2013 and 2012:

		2013	2012
Future cash inflows	$	3,416,397	$	4,369,426
Future production costs		(1,479,190)		(1,690,387)
Future development costs		(17,888)		(9,590)
Future income tax expense*		-		-
Subtotal		1,919,319		2,669,449
Discount factor at 10%		(558,317)		(877,137)
Standardized Measure of Future Net Cash Flows	$	1,361,002	$	1,792,312

* The Company presently has approximately $24 million of loss carry-forwards for Federal income tax purposes. Based on these loss carry-forwards no future taxes payable have been included in the determination of future new cash inflows. Future corporate office general and administrative expenses have not been deducted in determining future net cash flows.

Summary of Changes in Standardized Measure of Discounted Future Net Cash Flows

	2013		2012
Balance - Beginning of Year	$	1,792,312	$	2,206,666
Increase (decrease) in future net cash flows:
Sales for the year net of related production costs		(149,341)		(174,070)
Acquisition of reserves in place		-		47,078
Changes in estimated future development costs		(6,246)		9,915
Changes in sales and transfer prices net of production costs      related to future production		(454,954)		(618,181)
Change due to revision in quantity estimates and other		-		97,237
Disposition of reserves in place		-		-
Extensions and discoveries net of related costs		-		-
Accretion of discount		179,231		220,667
Balance - End of Year	$	1,361,002	$	1,792,312