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ASSET RETIREMENT OBLIGATIONS

6 Months Ended

Jun. 30, 2011

6. ASSET RETIREMENT OBLIGATIONS

We estimate the fair values of asset retirement obligations (“AROs”) based on historical experience of plug and abandonment costs by field and, assumptions and judgments regarding such factors as the existence of a legal obligation for an ARO; estimated probabilities, amounts and timing of settlements; the credit-adjusted risk-free rate to be used and inflation rates.

Asset Retirement Obligations Rollforward

Beginning January 1, 2011 liability	$	9,834,021
Accretion expense	275,200
Liabilities incurred	46,586
Liabilities settled	(70,250		)
Revisions	—
Ending June 30, 2011 liability	$	10,085,557

- Definition

The entire disclosure for an asset retirement obligation and the associated long-lived asset. An asset retirement obligation is a legal obligation associated with the disposal or retirement from service of a tangible long-lived asset that results from the acquisition, construction or development, or the normal operations of a long-lived asset, except for certain obligations of lessees.

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