Asset Retirement Obligations

3 Months Ended

Mar. 31, 2015

Asset Retirement Obligation Disclosure [Abstract]

Our asset retirement obligations ("ARO") represent the estimated present value of the amount we will incur to plug, abandon and remediate our oil and natural gas properties at the end of their production lives, in accordance with applicable state laws. We determine our ARO by calculating the present value of estimated cash flow related to the liability. Each year we review and to the extent necessary, revise our ARO estimates.

AROs are recorded as a liability at their estimated present value at the various assets’ inception, with the offsetting charge to oil and natural gas properties. Periodic accretion of the discounted estimated liability is recorded in our unaudited condensed consolidated statement of operations. The discounted capitalized cost is amortized to expense through the depreciation calculation over the life of the assets based on proved developed reserves.

Changes in our ARO for the periods indicated are presented in the following table:



	Three Months Ended March 31, 2015		Year Ended December 31, 2014
	(in thousands)
Asset retirement obligation - beginning of period	$	7,363	$	3,942
Liabilities incurred for new wells and interest	21		3,171
Accretion expense	92		250
Asset retirement obligation - end of period	$	7,476	$	7,363

As of March 31, 2015 and December 31, 2014, all of our ARO were classified as long-term and were reported as “Asset Retirement Obligations” in our unaudited condensed consolidated balance sheets.