Asset Retirement Obligation

12 Months Ended

Dec. 31, 2012

7.	Asset Retirement Obligation

The Company records a liability for the estimated costs to be incurred in connection with the abandonment of oil and natural gas properties in the future. This liability is included in the caption “other” in the liabilities section of the consolidated balance sheet. The following table describes the changes to the Company’s asset retirement obligations during 2012 and 2011 (in thousands):


	2012			2011
Balance at beginning of year	$	3,455		$	3,063
Liabilities incurred		418			361
Liabilities settled		(150	)		(110	)
Accretion expense		163			143
Revision in estimated costs of plugging oil and natural gas wells		536			(2	)

Asset retirement obligation at end of year	$	4,422		$	3,455

- Definition

The entire disclosure for an asset retirement obligation and the associated long-lived asset. An asset retirement obligation is a legal obligation associated with the disposal or retirement from service of a tangible long-lived asset that results from the acquisition, construction or development, or the normal operations of a long-lived asset, except for certain obligations of lessees.

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