Asset Retirement Obligations

6 Months Ended

Sep. 30, 2020

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligations

3. 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 initially 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 until the liability is settled or the well is sold, at which time the liability is removed. The related asset retirement cost is capitalized as part of the carrying amount of our oil and natural gas properties. The ARO is included on 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 six months of fiscal 2021:

Carrying amount of asset retirement obligations as of April 1, 2020	$	762,761
Liabilities incurred		11,269
Liabilities settled		(10,750	)
Accretion expense		14,424
Carrying amount of asset retirement obligations as of September 30, 2020		777,704
Less: Current portion		7,500
Non-Current asset retirement obligation	$	770,204