9. Asset Retirement Obligation	3 Months Ended
Mar. 31, 2013
Notes
9. Asset Retirement Obligation	9 Asset Retirement Obligation (ARO) The ARO is recorded at fair value and accretion expense is recognized as the discounted liability is accreted to its expected settlement value. The fair value of the ARO liability is measured by using expected future cash outflows discounted at the Company’s credit adjusted risk free interest rate. Amounts incurred to settle plugging and abandonment obligations that either less than or greater than amounts accrued are recorded as a gain or loss in current operations. Revisions to previous estimates, such as the estimated cost to plug a well or the estimated future economic life of the well may require adjustments to the ARO aand are capitalized as part of the costs of proved oil and natural gas property. The following table is a reconciliation of the ARO liability for continuing operations for the three months ended March 31, 2013 and December 31, 2012: 3/31/2013 12/31/2012 Asset retirement obligation at the beginning of the period $ 5,114 $ 0 Acquisition of oil and gas leases 8,644 Revisions to previous estimates (3,860) Dispositions - Accretion expense 123 330 Asset retirement obligation at the end of the period $ 5,237 $ 5,114

9. Asset Retirement Obligation

3 Months Ended

Mar. 31, 2013

9 Asset Retirement Obligation (ARO)

The ARO is recorded at fair value and accretion expense is recognized as the discounted liability is accreted to its expected settlement value. The fair value of the ARO liability is measured by using expected future cash outflows discounted at the Company’s credit adjusted risk free interest rate.

Amounts incurred to settle plugging and abandonment obligations that either less than or greater than amounts accrued are recorded as a gain or loss in current operations. Revisions to previous estimates, such as the estimated cost to plug a well or the estimated future economic life of the well may require adjustments to the ARO aand are capitalized as part of the costs of proved oil and natural gas property.

The following table is a reconciliation of the ARO liability for continuing operations for the three months ended March 31, 2013 and December 31, 2012:

3/31/2013 12/31/2012

Asset retirement obligation at the beginning of the period $ 5,114 $ 0

Acquisition of oil and gas leases 8,644

Revisions to previous estimates (3,860)

Dispositions -

Accretion expense 123 330

Asset retirement obligation at the end of the period $ 5,237 $ 5,114

- Definition

The entire disclosure for an asset retirement obligation and the associated long-lived asset. An asset retirement obligation is a legal obligation associated with the disposal or retirement from service of a tangible long-lived asset that results from the acquisition, construction or development, or the normal operations of a long-lived asset, except for certain obligations of lessees.

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