ASSET RETIREMENT OBLIGATIONS

12 Months Ended

Dec. 31, 2021

Asset Retirement Obligation Disclosure [Abstract]

The Company recognizes an estimated liability for future costs associated with the abandonment of its oil and gas properties, including facilities requiring decommissioning. A liability for the fair value of an asset retirement obligation and corresponding increase to the carrying value of the related long-lived asset are recorded at the time a well is drilled or acquired, or a facility is constructed. The increase in carrying value is included in the proved oil and gas properties line item in the accompanying balance sheets. The Company depletes the amount added to proved oil and gas property costs and recognizes expense in connection with the accretion of the discounted liability over the remaining estimated economic lives of the respective long-lived assets. Cash paid to settle asset retirement obligations is included in the cash flows from operating activities section of the accompanying statements of cash flows.

The Company’s estimated asset retirement obligation liability is based on historical experience plugging and abandoning wells, estimated economic lives, estimated plugging and abandonment cost, and regulatory requirements. The liability is discounted using the credit-adjusted risk-free rate estimated at the time the liability is incurred or revised.

A roll-forward of the Company's asset retirement obligation is as follows (in thousands):


	Year Ended December 31,
	2021		2020
Balance, beginning of year	$	28,699	$	27,908
Additional liabilities incurred	183,758		357
Accretion expense	3,933		1,004
Liabilities settled	(4,221)		(2,464)
Revisions to estimate	13,146		1,894

Balance, end of year	$	225,315	$	28,699
Current portion	24,000		—
Long-term portion	$	201,315	$	28,699

Revisions to estimates for the year ended December 31, 2021 were primarily a result of increases in the Company's estimated plugging and abandonment cost. Revisions to estimates for the year ended December 31, 2020 were primarily a result of increased abandonment costs and decreased estimated economic well lives.