Asset Retirement Obligations Asset Retirement Obligations (Notes)

3 Months Ended

Mar. 31, 2016

Asset Retirement Obligation Disclosure [Abstract]

(9) Asset Retirement Obligations

We record these obligations in accordance with the guidance contained in FASB ASC 410-20. This guidance requires entities to record the fair value of liabilities for legal obligations associated with the retirement obligations of tangible long-lived assets in the period in which they are incurred. When a liability is initially recorded, the carrying amount of the related long-lived asset is increased. The liability is discounted from the expected date of abandonment. Over time, accretion of the liability is recognized each period, and the capitalized cost is depreciated on a unit-of-production basis as part of depreciation, depletion, and amortization expense for our oil and gas properties. Upon settlement of the liability, the Company either settles the obligation for its recorded amount or incurs a gain or loss upon settlement which is included in the “Property and Equipment” balance on our accompanying condensed consolidated balance sheets. This guidance requires us to record a liability for the fair value of our dismantlement and abandonment costs, excluding salvage values.

The following provides a roll-forward of our asset retirement obligations (in thousands):



	2016
Asset Retirement Obligations recorded as of January 1	$	63,555
Accretion expense	1,291
Liabilities incurred for new wells and facilities construction	—
Reductions due to sold and abandoned wells and facilities	(1		)
Revisions in estimates	488
Asset Retirement Obligations as of March 31	$	65,333

At March 31, 2016 and December 31, 2015, approximately $7.7 million and $7.2 million of our asset retirement obligations were classified as a current liability in “Accounts payable and accrued liabilities” on the accompanying condensed consolidated balance sheets.