Note 10: Asset Retirement Obligations

12 Months Ended

Nov. 30, 2014

Note 10: Asset Retirement Obligations

During the period November 2007 to October 2009, the Company acquired in tranches a 50% working interest in the Hayter 10-8-40-1 W4M oil and gas well in Alberta Canada, known as the “Hayter Prospect”. During the year ended November 30, 2013, due to financial restrictions in the current capital markets, management determined the focus of the Company in the future would predominantly be the exploration and development of the Zoro Mineral Property, and as the Company had no current plans to further develop the Hayter property, the Company recorded an impairment provision of $135,427 during the fiscal year ended November 30, 2013, resulting in the book value of the Hayter prospect being $nil at November 30, 2013. As of November 30, 2014 and November 30, 2013, the Company determined the asset retirement obligation to be $19,523 and $18,861, respectively.

Total future asset retirement obligations were estimated by management based on the Company’s net ownership interest, estimated costs to reclaim and abandon the wells and the estimated timing of the costs to be incurred in future periods. The Company has estimated the net present value of its total asset retirement obligations at February, 2013 to be $16,889 based on a total undiscounted liability of $17,057 (Cdn$17,500) in the Hayter Prospect, Alberta, Canada. These payments are expected to be made over the next seven years, with the majority of the cost incurred between 2016 and 2019.

The Company’s credit adjusted risk free rate of 15% and an inflation rate of 8% were used to calculate the present value of the asset retirement obligation.

	November 30,	November 30,
	2014	2013
Balance, beginning of year	$ 18,861	$ 16,845
Liabilities incurred	-	-
Accretion expense	2,728	2,529
Effect of foreign exchange	(2,066)	(513)
Balance, end of year	$ 19,523	$ 18,861

FORCE MINERALS CORP 10-K/A