Asset Retirement Obligations

3 Months Ended

Mar. 31, 2013

Asset Retirement Obligations [Abstract]

NOTE 6 – 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 natural 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” in our unaudited consolidated statements of operations. Payments to settle asset retirement obligations occur over the lives of the oil and natural gas properties.

Changes in our asset retirement obligations for three months ended March 31, 2013 are presented in the following table:



		Three Months Ended
		March 31, 2013
Beginning of period	$	126,991
Liabilities settled		(820)
Accretion expense		1,732
End of period	$	127,903
Less: Current portion of asset retirement obligations		(903)
Asset retirement obligations - non-current	$	127,000

- 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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