ASSET RETIREMENT OBLIGATIONS

12 Months Ended

Dec. 31, 2024

Asset Retirement Obligation [Abstract]

ASSET RETIREMENT OBLIGATIONS

ASSET RETIREMENT OBLIGATIONS

The Company has asset retirement obligations associated with the future plugging and abandonment of proved properties and related facilities.  Initially, the fair value of a liability for an asset retirement obligation (“ARO”) 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 included in the full cost pool, subject to depletion.  If the liability is settled for an amount other than the recorded amount, an adjustment to the full cost pool is recognized.  The Company has no assets that are legally restricted for purposes of settling asset retirement obligations.

Inherent in the fair value calculation are numerous assumptions and judgments including the ultimate retirement costs, inflation factors, credit-adjusted risk-free discount rates, timing of retirement, and changes in the legal, regulatory, environmental and political environments.  To the extent future revisions to these assumptions impact the present value of the existing ARO, a corresponding adjustment is made to the oil and gas property balance.  For example, as the Company analyzes actual plugging

and abandonment information, the Company may revise its estimate of current costs, the assumed annual inflation of the costs and/or the assumed productive lives of its wells.

The following table summarizes the Company’s asset retirement obligation transactions recorded during the years ended December 31, 2024 and 2023.

	December 31,
(in thousands)	2024		2023
Beginning Asset Retirement Obligations	$	39,889	$	33,082
Liabilities Incurred During the Period	8,342		4,394
Revision of Estimates	3,672		1,019
Accretion of Discount on Asset Retirement Obligations	2,852		2,395
Liabilities Settled During the Period	(5,558)		(1,001)
Ending Asset Retirement Obligations	$	49,197	$	39,889

The table below sets forth the short term and long term asset retirement obligation balances as of the years ended December 31, 2024 and 2023.

	December 31,
(in thousands)	2024		2023
Asset Retirement Obligations - Current Liabilities	$	3,290	$	1,686
Asset Retirement Obligations - Noncurrent Liabilities	45,907		38,203
Ending Asset Retirement Obligations	$	49,197	$	39,889

The short term asset retirement obligation balance is reported in Other Current Liabilities in the Company’s balance sheets.