Asset Retirement Obligations

12 Months Ended

Sep. 30, 2020

Asset Retirement Obligation Disclosure [Abstract]

ASSET RETIREMENT OBLIGATIONS

11. 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, 2020, the Company estimates the undiscounted cash flows related to asset retirement obligation to total approximately $605,926 (September 30, 2019 - $610,291). The fair value of the liability at September 30, 2020 is estimated to be $515,394 (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:

	September 30, 2020			September 30, 2019
Balance, beginning of period	$	500,392		$	493,467
Liabilities incurred		–			–
Effect of foreign exchange		(3,430	)		(11,081	)
Disposal		–			–
Accretion expense		18,432			18,006
Balance, end of period	$	515,394		$	500,392