(10) 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 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 amortized 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 for the year ended December 31, 2017 and the six months ended June 30, 2018 (in thousands):



Asset Retirement Obligations as of December 31, 2016	$	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 ⁽¹⁾	$	10,787
Accretion expense	243
Liabilities incurred for new wells and facilities construction	26
Reductions due to sold wells and facilities	(6,265		)
Reductions due to plugged wells and facilities	(145		)
Revisions in estimates	(85		)
Asset Retirement Obligations as of June 30, 2018 ⁽²⁾	$	4,561

(1) Includes approximately $2.1 million of current asset retirement obligations included in “Accounts payable and accrued liabilities” on the accompanying condensed consolidated balance sheets.

(2) Includes approximately $0.3 million of current asset retirement obligations included in “Accounts payable and accrued liabilities” on the accompanying condensed consolidated balance sheets.