7. PROPERTY AND EQUIPMENT AND ASSET RETIREMENT OBLIGATION

Barnwell’s property and equipment is detailed as follows:

					Accumulated
					Depletion,
	Estimated	Gross			Depreciation,				Net
	Useful	Property and			and				Property and
	Lives	Equipment			Amortization				Equipment
At September 30, 2013:
Land			$	863,000		$	-			$	863,000
Oil and natural gas properties
(full cost accounting)			239,243,000			(202,400,000		)		36,843,000
Drilling rigs and equipment	3 – 10 years		6,758,000			(5,513,000		)		1,245,000
Offices	40 years		2,420,000			(324,000		)		2,096,000
Other property and equipment	3 – 17 years		3,588,000			(3,329,000		)		259,000
Total			$	252,872,000		$	(211,566,000	)		$	41,306,000

					Accumulated
					Depletion,
	Estimated	Gross			Depreciation,				Net
	Useful	Property and			and				Property and
	Lives	Equipment			Amortization				Equipment
At September 30, 2012:
Land			$	863,000		$	-			$	863,000
Oil and natural gas properties (full cost accounting)			242,433,000			(198,768,000		)		43,665,000
Drilling rigs and equipment	3 – 10 years		6,752,000			(5,152,000		)		1,600,000
Offices	40 years		2,420,000			(264,000		)		2,156,000
Other property and equipment	3 – 17 years		3,685,000			(3,345,000		)		340,000
Total			$	256,153,000		$	(207,529,000	)		$	48,624,000

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,
	2013			2012
Asset retirement obligation as of beginning of year	$	5,629,000		$	4,921,000
Obligations incurred on new wells drilled	61,000			68,000
Revision of estimated obligation	1,783,000			320,000
Accretion expense	499,000			363,000
Payments	(222,000		)	(324,000		)
Foreign currency translation adjustment	(230,000		)	281,000
Asset retirement obligation as of end of year	$	7,520,000		$	5,629,000

Barnwell recognized an additional $1,783,000 of abandonment and reclamation capitalized costs and liabilities in fiscal 2013 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.