Asset Retirement Obligations

Liabilities for legal obligations associated with the retirement obligations of tangible long-lived assets are initially recorded at fair value 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 DD&A 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 recorded to the “Property and Equipment” balance on our accompanying consolidated balance sheets.

Upon the Company's emergence from bankruptcy on April 22, 2016, as discussed in Note 12, the Company applied fresh start accounting. This included adjusting the Asset Retirement Obligations based on the estimated fair values at April 22, 2016.

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



Asset Retirement Obligations as of December 31, 2015	$	63,555
Accretion expense	1,610
Liabilities incurred for new wells and facilities construction	1
Reductions due to sold wells and facilities	(6,545		)
Reductions due to plugged wells and facilities	(85		)
Revisions in estimates	488
Asset Retirement Obligations as of April 22, 2016 (Predecessor)	$	59,024
Fair value fresh start adjustment	5,216


Asset Retirement Obligation as of April 22, 2016 (Successor)	$	64,240
Accretion expense	2,878
Liabilities incurred for new wells and facilities construction	34
Reductions due to sold wells and facilities	(42,857		)
Reductions due to plugged wells and facilities	(916		)
Revisions in estimates	8,877
Asset Retirement Obligations as of December 31, 2016 (Successor)	$	32,256
Accretion expense	2,322
Liabilities incurred for new wells and facilities construction	253
Reductions due to sold wells and facilities	(21,466		)
Reductions due to plugged wells and facilities	(2,366		)
Revisions in estimates	(212		)
Asset Retirement Obligations as of December 31, 2017 (Successor)	$	10,787

At December 31, 2017 and 2016, approximately $2.1 million and $10.0 million, respectively, of our asset retirement obligation was classified as a current liability in “Accounts payable and accrued liabilities” on the accompanying consolidated balance sheets. The 2016 revisions in estimates are primarily attributable to revaluation changes in our Bay De Chene field and a portion of our South Texas AWP field, which led to an increase in the estimated plugging and abandonment costs for our wells. The 2017 and 2016 reductions due to sold wells and facilities are primarily attributable to the disposition of our assets in the Bay De Chene and Lake Washington fields, respectively.