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8. Asset Retirement Obligation
 3 Months Ended
Mar. 31, 2017
Asset Retirement Obligation Disclosure [Abstract]  
Asset Retirement Obligation

The Company had asset retirement obligations (ARO) associated with the future plugging and abandonment of proved properties and related facilities prior to the disposition of the Company’s oil and gas operations as part of its debt restructuring summarized in Note 3 – Debt Restructuring. Under the provisions of FASB ASC 410-20-25, the fair value of a liability for an asset retirement obligation is recorded in the period in which it is incurred and a corresponding increase in the carrying amount of the related long lived asset. The liability is accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the related asset. If the liability is settled for an amount other than the recorded amount, a gain or loss is recognized. The Company has no assets that are legally restricted for purposes of settling ARO.

 

The following table summarizes the Company’s asset retirement obligation transactions recorded in accordance with the provisions of FASB ASC 410-20-25 during the three months ended March 31, 2016:

 

    Three Months
Ended		  
    March 31, 2016  
Beginning ARO   $ 368,089  
Liabilities incurred for new wells placed in production     –  
Accretion of discount on ARO (a component of loss from discontinued operations)     8,133  
Ending ARO   $ 376,222