PROPERTY AND EQUIPMENT AND ASSET RETIREMENT OBLIGATION

Barnwell’s property and equipment is detailed as follows:



	Estimated Useful Lives	Gross Property and Equipment		Accumulated Depletion, Depreciation, and Amortization			Net Property and Equipment
At September 30, 2015:
Land		$	863,000	$	—		$	863,000
Oil and natural gas properties
(full cost accounting)		63,105,000		(57,460,000		)	5,645,000
Drilling rigs and equipment	3 – 10 years	6,598,000		(5,825,000		)	773,000
Offices	40 years	2,420,000		(445,000		)	1,975,000
Other property and equipment	3 – 17 years	2,967,000		(2,755,000		)	212,000
Total		$	75,953,000	$	(66,485,000	)	$	9,468,000



	Estimated Useful Lives	Gross Property and Equipment		Accumulated Depletion, Depreciation, and Amortization			Net Property and Equipment
At September 30, 2014:
Land		$	863,000	$	—		$	863,000
Oil and natural gas properties
(full cost accounting)		209,702,000		(191,478,000		)	18,224,000
Drilling rigs and equipment	3 – 10 years	6,759,000		(5,754,000		)	1,005,000
Offices	40 years	2,420,000		(384,000		)	2,036,000
Other property and equipment	3 – 17 years	3,279,000		(3,057,000		)	222,000
Total		$	223,023,000	$	(200,673,000	)	$	22,350,000

See Note 8 for discussion of acquisitions and divestitures of oil and natural gas properties in fiscal 2015 and 2014.

Barnwell recognizes the fair value of a liability for an asset retirement obligation in the period in which it is incurred if a reasonable estimate of fair value can be made. The following is a reconciliation of the asset retirement obligation:



	Year ended September 30,
	2015			2014
Asset retirement obligation as of beginning of year	$	9,163,000		$	7,520,000
Obligations incurred on new wells drilled or acquired	316,000			105,000
Liabilities associated with properties sold	(2,013,000		)	(718,000		)
Revision of estimated obligation	918,000			2,437,000
Accretion expense	632,000			624,000
Payments	(655,000		)	(111,000		)
Foreign currency translation adjustment	(1,425,000		)	(694,000		)
Asset retirement obligation as of end of year	6,936,000			9,163,000
Less current portion	(506,000		)	(978,000		)
Asset retirement obligation, long-term	$	6,430,000		$	8,185,000

Asset retirement obligations were reduced by $2,013,000 and $718,000 in fiscal 2015 and 2014, respectively, for those obligations that were assumed by purchasers of Barnwell's oil and natural gas properties. Barnwell recognized an additional $918,000 and $2,437,000 of abandonment and reclamation capitalized costs and liabilities in fiscal 2015 and 2014, respectively, for upward revisions to prior year estimates of costs as a result of the receipt of new and more specific information regarding costs to abandon wells similar to Barnwell’s. Additionally, in the prior year, a portion of the revision in estimate was related to the Inactive Well Compliance Program, which was introduced by the Alberta Energy Regulator in July 2014, which resulted in the acceleration of expenditures to suspend and/or abandon long-term inactive wells.