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ASSET RETIREMENT OBLIGATIONS

9 Months Ended

Sep. 30, 2022

ASSET RETIREMENT OBLIGATIONS

ASSET RETIREMENT OBLIGATIONS

8. ASSET RETIREMENT OBLIGATIONS

The Company records an asset retirement obligation (ARO) on oil and natural gas properties when it can reasonably estimate the fair value of an obligation to perform site reclamation, dismantle facilities or plug and abandon costs. The Company records the ARO liability on the unaudited condensed consolidated balance sheets and capitalizes the cost in “Oil and natural gas properties” during the period in which the obligation is incurred. The Company records the accretion of its ARO liabilities in “Depletion, depreciation and accretion” expense in the unaudited condensed consolidated statements of operations. The additional capitalized costs are depreciated on a unit-of-production basis.

The Company recorded the following activity related to its ARO liability (in thousands):

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​	​	​	​
Liability for asset retirement obligations as of December 31, 2021		$	11,896
Liabilities incurred during the period	​	​	103
Liabilities settled during the period	​	​	(402)
Accretion expense	​	​	334
Change in estimate	​	​	3,541
Liability for asset retirement obligations as of September 30, 2022	​	$	15,472

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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://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 410
-SubTopic 20
-URI http://asc.fasb.org/subtopic&trid=2175671

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