Asset Retirement Obligations

12 Months Ended

Sep. 30, 2019

Asset Retirement Obligation Disclosure [Abstract]

ASSET RETIREMENT OBLIGATIONS

10. 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 AER to reclaim and abandon wells and facilities and the estimated timing of the costs to be incurred in future periods. At September 30, 2019, the Company estimates the undiscounted cash flows related to asset retirement obligation to total approximately $610,291 (September 30, 2018 - $624,354). The fair value of the liability at September 30, 2019 is estimated to be $500,392 (September 30, 2018 - $493,467) 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 24 years.

Changes to the asset retirement obligation were as follows:

	September 30, 2019			September 30, 2018
Balance, beginning of period	$	493,467		$	493,411
Liabilities incurred		–			–
Effect of foreign exchange		(11,081	)		(17,893	)
Disposal		–			–
Accretion expense		18,006			17,949
Balance, end of period	$	500,392		$	493,467