Asset Retirement Obligations

9 Months Ended

Jun. 30, 2017

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 June 30, 2017, the Company estimates the undiscounted cash flows related to asset retirement obligation to total approximately $622,818 (September 30, 2016 - $616,191). The fair value of the liability at June 30, 2017 is estimated to be $470,230 (September 30, 2016 - $452,533) 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 26 years.

Changes to the asset retirement obligation were as follows:

	June 30, 2017		September 30, 2016
Balance, beginning of period	$	452,533	$	426,607
Liabilities incurred		–		–
Effect of foreign exchange		5,218		9,771
Disposal		–		–
Accretion expense		12,479		16,155
Balance, end of period	$	470,230	$	452,533