Asset Retirement Obligations

12 Months Ended

Dec. 31, 2020

Asset Retirement Obligation Disclosure [Abstract]

The following table summarizes the changes in the Company’s asset retirement obligations:


	December 31,
	2020		2019
	(In thousands)
Asset retirement obligations:
Beginning asset retirement obligations	$	235,053	$	151,953
Additions associated with Equatorial Guinea - Ceiba Field and Okume Complex	—		114,395
Liabilities incurred during period	3,436		11,218
Liabilities settled during period	(2,782)		(7,156)
Revisions in estimated retirement obligations	(3,736)		(49,471)
Accretion expense	19,450		14,114
Ending asset retirement obligations	$	251,421	$	235,053

The asset retirement obligations reflect the estimated present value of the amount of dismantlement, removal, site reclamation, and similar activities associated with our oil and gas properties. The Company utilizes current cost experience to estimate the expected cash outflows for retirement obligations. The Company estimates the ultimate productive life of the properties, a risk-adjusted discount rate, and an inflation factor in order to determine the current present value of this obligation. To the extent future revisions to these assumptions impact the present value of the existing asset retirement obligation, a corresponding adjustment is made to the oil and gas property balance. The revisions in estimated retirement obligations during 2020 and 2019 are related to changes in the estimated abandonment date in certain of our fields.

Effective as of January 1, 2019, our outstanding shares in KTIPI were transferred to Trident in exchange for a 40.375% undivided interest in the Ceiba Field and Okume Complex. As a result, our interest in the Ceiba Field and Okume Complex going forward is accounted for under the proportionate consolidation method of accounting, which includes additions to our asset retirement obligations.