9. Asset Retirement Obligation

12 Months Ended

Dec. 31, 2015

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligation

The Company has asset retirement obligations associated with the future plugging and abandonment of proved properties and related facilities. Under the provisions of FASB ASC 410-20-25, the fair value of a liability for an asset retirement obligation 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 depreciated over the useful life of the related asset. If the liability is settled for an amount other than the recorded amount, a gain or loss is recognized. The Company has no assets that are legally restricted for purposes of settling asset retirement obligations.

The following table summarizes the Company’s asset retirement obligation transactions recorded in accordance with the provisions of FASB ASC 410-20-25 during the years ended December 31, 2015 and 2014:

	Years ended December 31,
	2015		2014
Beginning asset retirement obligation	$	286,804	$	160,665
Liabilities incurred for new wells placed in production		48,711		103,778
Accretion of discount on asset retirement obligations		32,574		22,361
Ending asset retirement obligation	$	368,089	$	286,804