Asset Retirement Obligations

6 Months Ended

Jun. 30, 2013

(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 the six months ended June 30, 2013 is as follows (in thousands):

	Six Months Ended June 30, 2013
Beginning of period	$	146,478
Liabilities incurred		3,846
Liabilities settled		(155	)
Disposition of wells		(3,098	)
Accretion expense		5,324
Change in estimate		(6,231	)
End of period		146,164
Less current portion		(2,366	)
Long-term asset retirement obligations	$	143,798

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

- 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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