Asset Retirement Obligations

12 Months Ended

Dec. 31, 2012

Asset Retirement Obligation [Abstract]

QEP records asset retirement obligations (ARO) when there are legal obligations associated with the retirement of tangible long-lived assets. The Company's ARO liability applies primarily to abandonment costs associated with gas and oil wells, production facilities and certain other properties. The fair values of such costs are estimated by Company personnel based on abandonment costs of similar assets and depreciated over the life of the related assets. Revisions to the ARO liability occur due to changes in estimated abandonment costs and well economic lives. The ARO liability is adjusted to present value each period through an accretion calculation using a credit-adjusted risk-free interest rate. Of the $193.1 million ARO liability,$1.7 million was included as a liability in "Accounts payable and accrued expenses" on the Consolidated Balance Sheet.

The following is a reconciliation of the changes in the asset retirement obligation for the periods specified below:



	Asset Retirement Obligations
	2012			2011
	(in millions)
ARO liability at January 1,	$	163.9		$	148.3
Accretion	10.5			9.7
Liabilities incurred	8.5			7.9
Revisions	11.1			—
Liabilities settled	(0.9		)	(2.0		)
ARO liability at December 31,	$	193.1		$	163.9

- 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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