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Asset Retirement Obligations
9 Months Ended
Dec. 31, 2017
Asset Retirement Obligation Disclosure [Abstract]  
Asset Retirement Obligations

4. Asset Retirement Obligations

 

The Company’s asset retirement obligations (“ARO”) relate to the plugging of wells, the removal of facilities and equipment, and site restoration on oil and gas properties. The fair value of a liability for an ARO is recorded in the period in which it is incurred, discounted to its present value using the credit adjusted risk-free interest rate, and a corresponding amount capitalized by increasing the carrying amount of the related long-lived asset. The liability is accreted each period, and the capitalized cost is depreciated as part of oil and gas properties, using the full cost method. The ARO is included in the Consolidated Balance Sheets with the current portion being included in the accounts payable and other accrued expenses.

 

The following table provides a rollforward of the AROs for the first nine months of fiscal 2018:

 

Carrying amount of asset retirement obligations as of April 1, 2017   $ 978,484  
Liabilities incurred     6,356  
Liabilities settled     (68,166 )
Accretion expense     25,196  
Carrying amount of asset retirement obligations as of December 31, 2017     941,870  
Less: Current portion     10,000  
Non-Current asset retirement obligation   $ 931,870