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Asset Retirement Obligations
 12 Months Ended
Mar. 31, 2022
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:

 

   2022   2021 
Carrying amount of asset retirement obligations, beginning of year  $728,797   $762,761 
Liabilities incurred   14,333    17,587 
Liabilities settled   (36,178)   (80,099)
Accretion expense   28,560    28,548 
Revisions   -    - 
Carrying amount of asset retirement obligations, end of year   735,512    728,797 
Less: Current portion   15,000    15,000 
Non-Current asset retirement obligation  $720,512   $713,797