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Asset Retirement Obligations

12 Months Ended

Mar. 31, 2020

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligations

6. Asset Retirement Obligations

The Company’s asset retirement obligations relate to the plugging of wells, the removal of facilities and equipment, and site restoration on oil and gas properties. The fair value of a liability for an ARO is recorded in the period in which it is incurred, discounted to its present value using the credit adjusted risk-free interest rate, and a corresponding amount capitalized by increasing the carrying amount of the related long-lived asset. The liability is accreted each period until the liability is settled or the well is sold, at which time the liability is removed. The related asset retirement cost is capitalized as part of the carrying amount of our oil and natural gas properties. The ARO is included on the consolidated balance sheets with the current portion being included in the accounts payable and accrued expenses.

The following table provides a rollforward of the asset retirement obligations for fiscal years ended March 31:

		2020				2019
Carrying amount of asset retirement obligations, beginning of year		$	861,534			$	862,553
Liabilities incurred			19,512				8,658
Liabilities settled			(145,520	)			(27,452	)
Accretion expense			27,235				27,775
Revisions			-				(10,000	)
Carrying amount of asset retirement obligations, end of year			762,761				861,534
Less: Current portion			7,500				7,500
Non-Current asset retirement obligation		$	755,261			$	854,034