Asset Retirement Obligations Asset Retirement Obligations (Notes)

3 Months Ended

Mar. 31, 2024

Asset Retirement Obligation Disclosure [Abstract]

(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. Estimates for the initial recognition of asset retirement obligations are derived from historical costs as well as management’s expectation of future cost environments and other unobservable inputs. As there is no corroborating market activity to support the assumptions used, the Company has designated these liabilities as Level 3 fair value measurements. 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.

The following provides a roll-forward of our asset retirement obligations for the year ended December 31, 2023 and the three months ended March 31, 2024 (in thousands):


Asset Retirement Obligations as of December 31, 2022	$	10,456
Accretion expense	985
Liabilities incurred for new wells, acquired wells and facilities construction	1,883

Reductions due to plugged wells and facilities	(718)
Revisions in estimates	554
Asset Retirement Obligations as of December 31, 2023	$	13,160
Accretion expense	316
Liabilities incurred for new wells, acquired wells and facilities construction	34



Asset Retirement Obligations as of March 31, 2024	$	13,510

At both March 31, 2024 and December 31, 2023, approximately $1.6 million of our asset retirement obligations, respectively, were classified as a current liability in “Accounts payable and accrued liabilities” on the accompanying condensed consolidated balance sheets.