Asset Retirement Obligations

12 Months Ended

Dec. 31, 2014

Asset Retirement Obligations [Abstract]

Note H – Asset Retirement Obligations

The asset retirement obligations liabilities (ARO) recognized by the Company at December 31, 2014 and 2013 are related to the estimated costs to dismantle and abandon its producing oil and gas properties and related equipment.

A reconciliation of the beginning and ending aggregate carrying amount of the asset retirement obligation for 2014 and 2013 is shown in the following table.



(Thousands of dollars)	2014		2013
Balance at beginning of year	$	880,003	751,583
Accretion expense		50,778	48,996
Liabilities incurred		70,568	172,048
Revisions of previous estimates		8,278	(4,856)
Liabilities settled		(36,818)	(51,647)
Liabilities assumed by purchaser of oil and gas assets		(69,416)	–
Liabilities assumed by Murphy USA Inc. upon separation		–	(15,401)
Changes due to translation of foreign currencies		(27,665)	(20,720)
Balance at end of year		875,728	880,003
Current portion of liability at end of year*		(34,202)	(27,515)
Noncurrent portion of liability at end of year	$	841,526	852,488

*Included in Other Accrued Liabilities on the Consolidated Balance Sheet.

The estimation of future ARO is based on a number of assumptions requiring professional judgment. The Company cannot predict the type of revisions to these assumptions that may be required in future periods due to the availability of additional information such as: prices for oil field services, technological changes, governmental requirements and other factors.