Asset Retirement Obligations
The table below summarizes the activity for the Company’s asset retirement obligations:
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For the Year Ended December 31, |
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|
2018 |
|
2017 |
Asset retirement obligations at January 1, 2018 and 2017, respectively |
|
$ |
6,020 |
|
|
$ |
6,661 |
|
Accretion expense |
|
874 |
|
|
677 |
|
Liabilities incurred |
|
1,543 |
|
|
278 |
|
Liabilities settled |
|
(1,288 |
) |
|
(711 |
) |
Dispositions |
|
(614 |
) |
|
— |
|
Revisions to estimate |
|
7,757 |
|
|
(885 |
) |
Asset retirement obligations at end of period |
|
14,292 |
|
|
6,020 |
|
Less: Current asset retirement obligations |
|
(3,887 |
) |
|
(1,295 |
) |
Long-term asset retirement obligations at December 31, 2018 and 2017, respectively |
|
$ |
10,405 |
|
|
$ |
4,725 |
|
2018
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|
• |
Liabilities incurred include additions from acquisitions, primarily the Delaware Asset Acquisition completed in the third quarter of 2018, as well as additions from new wells drilled during the year.
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|
• |
Liabilities settled include the retirement of 26 wells in 2018.
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• |
Dispositions are primarily attributable to the sale of oil and gas properties in the second quarter of 2018.
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|
|
• |
Revisions to estimates were due to changes in plugging cost estimates, timing of abandonment activities, and changes in working interest of producing wells.
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2017
|
|
• |
Liabilities incurred were primarily a result of additions from new wells drilled during the year.
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|
|
• |
Liabilities settled include the retirement of 18 wells in 2017.
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• |
Revisions to estimates were due to changes in timing of abandonment activities.
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Certain of the Company’s operating agreements require that assets be restricted for future abandonment obligations. Amounts recorded on the Consolidated Balance Sheets at December 31, 2018 and 2017 as long-term restricted investments were $3,424 and $3,372, respectively. These assets, which primarily include short-term U.S. Government securities, are held in abandonment trusts dedicated to pay future abandonment costs for several of the Company’s oil and natural gas properties.
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