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, 2017:
Land		$	365,000	$	—		$	365,000
Oil and natural gas properties
(full cost accounting)		68,708,000		(64,915,000		)	3,793,000
Drilling rigs and equipment	3 – 10 years	6,577,000		(5,992,000		)	585,000
Office	40 years	857,000		(295,000		)	562,000
Other property and equipment	3 – 17 years	2,724,000		(2,660,000		)	64,000
Total		$	79,231,000	$	(73,862,000	)	$	5,369,000



	Estimated Useful Lives	Gross Property and Equipment		Accumulated Depletion, Depreciation, and Amortization			Net Property and Equipment
At September 30, 2016:
Land		$	365,000	$	—		$	365,000
Oil and natural gas properties
(full cost accounting)		66,265,000		(61,060,000		)	5,205,000
Drilling rigs and equipment	3 – 10 years	6,379,000		(5,770,000		)	609,000
Office	40 years	857,000		(274,000		)	583,000
Other property and equipment	3 – 17 years	3,002,000		(2,862,000		)	140,000
Total		$	76,868,000	$	(69,966,000	)	$	6,902,000

See Note 9 for discussion of acquisitions and divestitures of oil and natural gas properties in fiscal 2017 and 2016 and the impairment of oil and natural gas properties recognized in fiscal 2016.

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,
	2017			2016
Asset retirement obligation as of beginning of year	$	7,194,000		$	6,936,000
Obligations incurred on new wells drilled or acquired	34,000			167,000
Liabilities associated with properties sold	(406,000		)	—
Revision of estimated obligation	154,000			(68,000		)
Accretion expense	433,000			464,000
Payments	(833,000		)	(459,000		)
Foreign currency translation adjustment	287,000			154,000
Asset retirement obligation as of end of year	6,863,000			7,194,000
Less current portion	(1,231,000		)	(1,017,000		)
Asset retirement obligation, long-term	$	5,632,000		$	6,177,000

Asset retirement obligations were reduced by $406,000 in fiscal 2017 for those obligations that were assumed by purchasers of Barnwell's oil and natural gas properties. There were no such obligations assumed in fiscal 2016.