Note 7 - ASSET RETIREMENT OBLIGATION

9 Months Ended

Sep. 30, 2011

Asset Retirement Obligation Disclosure [Text Block]

 (7)          ASSET RETIREMENT OBLIGATION

We recognize the present value of asset retirement obligations beginning in the period in which they are incurred if a reasonable estimate of a fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. As of September 30, 2011, $808 thousand of the $9.3 million asset retirement obligation was classified as a current liability due to plugging activities we estimate may occur during the next twelve months. A summary of our asset retirement obligations as of September 30, 2011 is as follows (in thousands):

	Asset Retirement
Asset Category	Obligation Liability		Estimated Life
Oil and gas producing properties	$	7,454	0-16 years
Facilities and other property		1,904	5-23 years
	$	9,358

The following table describes all changes to our asset retirement obligation liability during the nine months ended September 30, 2011 (in thousands):

Asset retirement obligation at beginning of year	$	8,937
Additions during the period		-
Disposals during the period		(521	)
Revisions of estimates		517
Accretion of discount		425
Asset retirement obligation at end of period	$	9,358