Callon Petroleum Company Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Asset Retirement Obligations

Asset Retirement Obligations

6 Months Ended

Jun. 30, 2012

Asset Retirement Obligation [Abstract]

The following table summarizes the Company’s asset retirement obligations activity for the six months ended June 30, 2012:



Asset retirement obligations at January 1, 2012	$	13,938
Accretion expense	1,135
Liabilities incurred	4
Liabilities settled	(512		)
Revisions to estimate	(784		)
Asset retirement obligations at end of period	13,781
Less: Current asset retirement obligations	997
Long-term asset retirement obligations at June 30, 2012	$	12,784

Liabilities settled primarily relate to properties located in the Gulf of Mexico, plugged and abandoned during the period.

Certain of the Company’s operating agreements require that assets be restricted for future abandonment obligations. Amounts recorded on the Consolidated Balance Sheets as restricted investments were $3,792 at June 30, 2012. These investments include primarily U.S. Government securities, and are held in abandonment trusts dedicated to pay future abandonment costs for several of the Company’s oil and natural gas properties.

- 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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