Asset Retirement Obligations

3 Months Ended

Dec. 31, 2019

Asset Retirement Obligation Disclosure [Abstract]

ASSET RETIREMENT OBLIGATIONS

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, 2019, the Company estimates the undiscounted cash flows related to asset retirement obligations to total approximately $622,253 (September 30, 2019 - $610,291). The fair value of the liability at December 31, 2019 is estimated to be $514,970 (September 30, 2019 - $500,392) 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 23 years.

Changes to the asset retirement obligation were as follows:

	December 31, 2019		September 30, 2019
Balance, beginning of period	$	500,392	$	493,467
Liabilities incurred		–		–
Effect of foreign exchange		9,884		(11,081	)
Disposal		–		–
Accretion expense		4,694		18,006
Balance, end of period	$	514,970	$	500,392