(7) Other Long-Term Obligations and 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 rest of fiscal 2014 and thereafter for the operating leases are as follows:


(Thousands of dollars)	Operating Leases

2014	$	188
2015		651
2016		545
2017		46

Total minimum payments	$	1,430

Rent expense for office space for the nine months ended September 30, 2014 and 2013 was $579,000 and $548,000, respectively.

Asset Retirement Obligation:

A reconciliation of the liability for plugging and abandonment costs for the nine months ended September 30, 2014 is as follows:


(Thousands of dollars)

Asset retirement obligation – December 31, 2013	$	10,537
Liabilities incurred		1,579
Liabilities settled		(642	)
Gain on settlement of liabilities		(1,787	)
Accretion expense		275
Revisions in estimated liabilities		—

Asset retirement obligation – September 30, 2014	$	9,962

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. In 2014, the Company recognized a gain on the settlement of asset retirement obligations associated with insurance recoveries related to obligations previously recognized on the plugging and abandonment of a well.