Asset Retirement Obligations

6 Months Ended

Jun. 30, 2012

Asset Retirement Obligations [Abstract]

Asset Retirement Obligations

NOTE 7 – ASSET RETIREMENT OBLIGATIONS

We record the asset retirement obligation (“ARO”) liability on our unaudited consolidated balance sheet and capitalize the cost in the “Oil and gas properties, using the full cost method of accounting” balance sheet caption during the period in which the obligation is incurred. We record the accretion of our ARO liabilities in “Accretion of asset retirement obligations” expense in our unaudited consolidated statements of operations. Payments to settle asset retirement obligations occur over the lives of the oil and gas properties. Revisions during the reporting period were due to changes in cost estimates for wells currently being retired.

Changes in our asset retirement obligations for the six months ended June 30, 2012 are presented in the following table:

		Six Months Ended
		June 30, 2012
Beginning of period	$	65,701
Assumed in acquisition		4,738
Divested		(23)
Revisions to previous estimates		1,223
Liabilities incurred		-
Liabilities settled		(909)
Accretion expense		1,730
End of period	$	72,460
Less: Current portion of asset retirement obligations		(808)
Asset retirement obligations - non-current	$	71,652