ASSET RETIREMENT OBLIGATIONS

12 Months Ended

Dec. 31, 2022

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 proved properties in the accompanying balance sheets. The Company depletes the amount added to proved properties 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,
	2022		2021
Balance, beginning of year	$	225,315	$	28,699
Additional liabilities incurred	3,031		183,758
Liabilities settled	(15,902)		(4,221)
Accretion expense	15,926		3,933
Revisions to estimate (1)	62,656		13,146

Balance, end of year	$	291,026	$	225,315
Current portion	25,557		24,000
Long-term portion	$	265,469	$	201,315

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(1)Revisions to estimates for the year ended December 31, 2022 and 2021 were primarily a result of increases in the Company’s estimated plugging and abandonment cost.