ASSET RETIREMENT OBLIGATIONS

12 Months Ended

Dec. 31, 2019

Asset Retirement Obligation Disclosure [Abstract]

The Company recognizes an estimated liability for future costs to abandon its oil and gas properties. The fair value of the asset retirement obligation is recorded as a liability when incurred, which is typically at the time the asset is acquired or placed in service. There is a corresponding increase to the carrying value of the asset, which is included in the proved properties line item in the accompanying balance sheets. The Company depletes the amount added to proved properties and recognizes expense in connection with accretion of the discounted liability over the remaining estimated economic lives of the properties.

The Company’s estimated asset retirement obligation liability is based on historical experience in abandoning wells, estimated economic lives, estimated costs to abandon the wells, and regulatory requirements. The liability is discounted using the credit-adjusted risk-free rate estimated at the time the liability is incurred.

A roll-forward of the Company's asset retirement obligation is as follows (in thousands):


	For the Years Ended December 31,
	2019		2018
Balance, beginning of year	$	29,405	$	38,262
Additional liabilities incurred	228		373
Accretion expense	1,467		1,831
Liabilities settled	(2,443)		(1,627)
Revisions to estimate	(749)		1,490
Sold properties	—		(10,924)
Balance, end of year	$	27,908	$	29,405

Revisions to the liability could occur due to changes in the estimated economic lives, abandonment costs of the wells, inflation rates, credit-adjusted risk-free rates, along with newly enacted regulatory requirements. Revisions to estimates for the year ended December 31, 2019 were primarily a result of decreased abandonment costs. Revisions to estimates for the year ended December 31, 2018 were primarily a result of an increase in the credit-adjusted risk-free rate applied at year-end and an increase in the inflation rate on wells that had an asset retirement obligation as of the beginning of the year, offset by a slight decrease in abandonment costs.