ASSET RETIREMENT OBLIGATIONS

3 Months Ended

Mar. 31, 2013

7. ASSET RETIREMENT OBLIGATIONS

We estimate the fair values of 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. The following table sets forth the composition of asset retirement obligations rollforward:

Beginning January 1, 2013 liability	$	11,029,206
Accretion expense		122,638
Liabilities incurred		2,667
Liabilities settled		(179,601	)
Revisions		—
Ending March 31, 2013 liability	$	10,974,910

- 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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