Asset Retirement Obligations

3 Months Ended

Dec. 31, 2015

Asset Retirement Obligations [Abstract]

7.	ASSET RETIREMENT OBLIGATIONS

The total future asset retirement obligation is estimated by management based on the Company’s net working interests in all wells and facilities, estimated costs as determined by the Alberta Energy Regulator to reclaim and abandon wells and facilities and the estimated timing of the costs to be incurred in future periods. At December 31, 2015, the Company estimates the undiscounted cash flows related to asset retirement obligation to total approximately $582,649 (September 30, 2015 - $602,613). The fair value of the liability at December 31, 2015 is estimated to be $416,330 (September 30, 2015 - $426,607) using a risk free rate of 3.74% and an inflation rate of 2%. The actual costs to settle the obligation are expected to occur in approximately 27 years.

Changes to the asset retirement obligation were as follows:

	December 31, 2015			September 30, 2015
Balance, beginning of period	$	426,607		$	469,013
Liabilities incurred		–			35,031
Effect of foreign exchange		(14,285	)		(93,421	)
Disposal		–			–
Accretion expense		4,008			15,984
Balance, end of period	$	416,330		$	426,607