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Asset Retirement Obligations

6 Months Ended

Jun. 30, 2023

Asset Retirement Obligations

Asset Retirement Obligations

15. Asset Retirement Obligations

Asset retirement obligations are estimated by management based on Epsilon’s net ownership interest in all wells and the gathering system, estimated costs to reclaim and abandon such assets and the estimated timing of the costs to be incurred in future periods, and the forecast risk free cost of capital. Epsilon has estimated the value of its total asset retirement obligations to be $2.8 million as of June 30, 2023 ($2.8 million at December 31, 2022) based on a total net future undiscounted liability of approximately $7.4 million ($7.4 million at December 31, 2022). Each year we review, and to the extent necessary, revise our asset retirement obligations estimates.

The following tables summarize the changes in asset retirement obligations for the periods indicated:

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​	​	​	​	​	​	​
​	​	Six Months Ended		​	Year ended
​	​	​	June 30,	​	​	December 31,
​	​	2023			2022
Balance beginning of period	​	$	2,780,237	​	$	2,833,656
Liabilities acquired	​	​	4,640	​	​	12,053
Liabilities disposed of	​	​	(46,961)	​	​	(25,835)
Wells plugged and abandoned	​	​	—	​	​	(118,260)
Accretion	​	​	39,931	​	​	78,623
Balance end of period	​	$	2,777,847	​	$	2,780,237

​

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- References

No definition available.

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- 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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 410
-SubTopic 20
-Section 50
-Paragraph 2
-URI https://asc.fasb.org/extlink&oid=6392692&loc=d3e7569-110849

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 410
-SubTopic 20
-URI https://asc.fasb.org/subtopic&trid=2175671

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 410
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6392692&loc=d3e7535-110849

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