ASSET RETIREMENT OBLIGATIONS

6 Months Ended

Jun. 30, 2023

Asset Retirement Obligation Disclosure [Abstract]

The Company recognizes an estimated liability for future costs associated with the abandonment of its oil and gas properties, including facilities requiring decommissioning. A liability for the fair value of an asset retirement obligation and corresponding increase to the carrying value of the related long-lived asset are recorded at the time a well is drilled or acquired, or a facility is constructed. The increase in carrying value is included in proved properties in the accompanying balance sheets. The Company depletes the amount added to proved properties and recognizes expense in connection with the accretion of the discounted liability over the remaining estimated economic lives of the respective long-lived assets. Cash paid to settle asset retirement obligations is included in the cash flows from operating activities section of the accompanying unaudited condensed consolidated statements of cash flows.

The Company’s estimated asset retirement obligation liability is based on historical experience plugging and abandoning wells, estimated economic lives, estimated plugging and abandonment cost, and regulatory requirements. The liability is discounted using the credit-adjusted risk-free rate estimated at the time the liability is incurred or revised.

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


	Amount
Balance as of December 31, 2022	$	291,026
Additional liabilities incurred	1,480
Accretion expense	7,648
Liabilities settled	(6,231)


Balance as of June 30, 2023	$	293,923
Current portion	25,557
Long-term portion	$	268,366