Asset retirement obligations

12 Months Ended

Dec. 31, 2020

Asset retirement obligations

6. Asset retirement obligations

The Company’s asset retirement obligations represent the estimated present value of the estimated cash flows the Company will incur to plug, abandon and remediate its producing properties at the end of their productive lives, in accordance with applicable state laws. Market risk premiums associated with asset retirement obligations are estimated to represent a component of the Company’s credit-adjusted risk-free rate that is utilized in the calculations of asset retirement obligations.

The Company’s asset retirement obligation transactions during the years ended December 31, 2020 and 2019 are summarized in the table below.

	For the year ended December 31, 2020			For the year ended December 31, 2019
Asset retirement obligations, beginning of period	$	5,788,280		$	230,650
Liabilities assumed in acquisitions		9,508,484			5,251,329
Revision to estimates		(862,405	)		—
Accretion expense		929,858			306,301
Asset retirement obligation, end of period	$	15,364,217		$	5,788,280