ASSET RETIREMENT OBLIGATIONS

9 Months Ended

Sep. 30, 2019

ASSET RETIREMENT OBLIGATIONS [Abstract]

NOTE 8. ASSET RETIREMENT OBLIGATIONS

The Company records an asset retirement obligation (“ARO”) and capitalizes the asset retirement cost in oil and natural gas properties in the period in which the retirement obligation is incurred based upon the fair value of an obligation to perform site reclamation, dismantle facilities or plug and abandon wells. After recording these amounts, the ARO is accreted to its future estimated value using an assumed cost of funds and the additional capitalized costs are depreciated on a unit–of–production basis. The changes in the aggregate ARO are as follows:


ARO as of December 31, 2018	$	119,606
Liabilities incurred		345
Revisions		(6)
Accretion expense		6,373
Settlements and divestitures		(20,823)
Liabilities held for sale		(2,759)
ARO as of September 30, 2019	$	102,736

As of September 30, 2019 and December 31, 2018, $1.4 million and $2.1 million of ARO is classified as current and is included in “Accounts payable and accrued liabilities” in the unaudited condensed consolidated balance sheets, respectively.