Asset Retirement Obligations

3 Months Ended

Mar. 31, 2017

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligations

Note 5—Asset Retirement Obligations

The following table summarizes the changes in the Company’s asset retirement obligations for the three months ended March 31, 2017:

(in thousands)	Three Months Ended March 31, 2017
Asset retirement obligations, beginning of period	$	7,226
Liabilities assumed	—
Liabilities incurred	274
Liabilities settled	(29		)
Accretion expense	114
Revision of estimated liabilities	—
Asset retirement obligations, end of period	$	7,585

Asset retirement obligations (“AROs”) reflect the present value of the estimated future costs associated with the plugging and abandonment of oil and natural gas wells, removal of equipment and facilities from leased acreage and land restoration in accordance with applicable local, state and federal laws. Inherent in the fair value calculation of the AROs are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates and timing of settlement. To the extent future revisions to these assumptions impact the value of the existing ARO liability, a corresponding adjustment is made to the oil and natural gas property balance.