ASSET RETIREMENT OBLIGATIONS

3 Months Ended

Mar. 31, 2013

ASSET RETIREMENT OBLIGATIONS

(9) ASSET RETIREMENT OBLIGATIONS

Our asset retirement obligations primarily represent the estimated present value of the amounts we will incur to plug, abandon and remediate our producing properties at the end of their productive lives. Significant inputs used in determining such obligations include estimates of plugging and abandonment costs, estimated future inflation rates and well life. The inputs are calculated based on historical data as well as current estimated costs.A reconciliation of our liability for plugging and abandonment costs for first quarter 2013 is as follows (in thousands):

	ThreeMonths Ended March31, 2013
Beginning of period	$  146,478
Liabilities incurred	1,690
Liabilities settled	(96)
Disposition of wells	(2,816)
Accretion expense	2,717
Change in estimate	-
End of period	147,973
Less current portion	(2,366)
Long-term asset retirement obligations	$145,607

Accretion expense is recognized as a component of depreciation, depletion and amortization expense in the accompanying statements of operations.