Asset Retirement Obligations

9 Months Ended

Mar. 31, 2023

Asset Retirement Obligations

Asset Retirement Obligations

Note 9. Asset Retirement Obligations

The Company’s ARO represents the estimated present value of the amount expected to be incurred to plug, abandon, and remediate its oil and natural gas properties at the end of their productive lives in accordance with applicable laws and regulations. The Company records the ARO liability on the unaudited condensed consolidated balance sheets and capitalizes the cost in “Oil and natural gas properties, net” during the period in which the obligation is incurred. The Company records the accretion of its ARO liabilities in “Depletion, depreciation and accretion” expense in the unaudited condensed consolidated statements of operations.

The following is a reconciliation of the activity related to the Company’s ARO liability (inclusive of the current portion) (in thousands):

	March 31, 2023
Asset retirement obligations — beginning of period	$	13,921
Liabilities settled		(119)
Accretion of discount		841
Asset retirement obligations — end of period		14,643
Less: current asset retirement obligations		(51)
Long-term portion of asset retirement obligations	$	14,592