Asset Retirement Obligations

9 Months Ended

Sep. 30, 2011

Asset Retirement Obligations [Abstract]

Note 6 – Asset Retirement Obligations

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 ARO estimates result from changes in expected cash flows or material changes in estimated asset retirement costs. The ARO liability is adjusted to present value each period through an accretion calculation using a credit-adjusted risk-free interest rate. Income or expense resulting from the settlement of ARO liabilities is included in net gain or (loss) from asset sales in the Consolidated Statements of Income. Changes in ARO were as follows:

	2011			2010
	(in millions)
ARO liability at January 1,	$	148.3		$	124.7
Accretion		7.2			6.5
Liabilities incurred		6.5			14.8
Revisions		-			0.5
Liabilities settled		(1.8	)		(2.3	)
ARO liability at September 30,	$	160.2		$	144.2