6. Commitments

Operating Leases:

The Company has several non-cancelable operating leases, primarily for rental of office space, that have a term of more than one year. The future minimum lease payments for the operating leases at December 31, 2013 are as follows.


(Thousands of dollars)	Operating Leases
2014	$	747
2015		651
2016		545
2017		46

Total minimum payments	$	1,989

Rent expense for office space for the years ended December 31, 2013 and 2012 was $699,000 and $755,000, respectively.

Asset Retirement Obligation:

A reconciliation of the liability for plugging and abandonment costs for the years ended December 31, 2013 and 2012 is as follows:


	Year Ended December 31,
(Thousands of dollars)	2013			2012
Asset retirement obligation at beginning of period	$	9,012		$	19,013
Liabilities incurred		338			733
Loss on settlement of obligations		40			—
Liabilities settled		(776	)		(15,361	)
Accretion expense		394			1,053
Revisions in estimated liabilities		1,529			3,574

Asset retirement obligation at end of period	$	10,537		$	9,012

The Company’s liability is determined using significant assumptions, including current estimates of plugging and abandonment costs, annual inflation of these costs, the productive life of wells and a risk-adjusted interest rate. Changes in any of these assumptions can result in significant revisions to the estimated asset retirement obligation. Revisions to the asset retirement obligation are recorded with an offsetting change to producing properties, resulting in prospective changes to depreciation, depletion and amortization expense and accretion of discount. Because of the subjectivity of assumptions and the relatively long life of most of the Company’s wells, the costs to ultimately retire the wells may vary significantly from previous estimates. During 2013 and 2012 revisions in estimated liabilities for asset retirement obligation resulted primarily from the enactment of new federal regulation requirements for plugging and abandonment.