Asset Retirement Obligations

12 Months Ended

Dec. 31, 2023

Asset Retirement Obligation Disclosure [Abstract]

The Company’s asset retirement obligations primarily relate to future costs associated with plugging and abandonment of its oil, natural gas and salt water disposal wells, removal of pipelines, equipment and facilities from leased acreage and returning such land to its original condition. The amounts recognized are based on numerous estimates and assumptions, including future retirement costs, future recoverable quantities of oil and natural gas, future inflation rates and the Company’s credit-adjusted risk-free interest rate. Revisions to the liability can occur due to changes in these estimates and assumptions or if federal or state regulators enact new plugging and abandonment requirements. At the time of the actual plugging and abandonment of its oil and natural gas wells, the Company includes any gain or loss associated with the operation in the amortization base to the extent the actual costs are different from the estimated liability.

The following table summarizes the changes in the Company’s asset retirement obligations for the years ended December 31, 2023 and 2022 (in thousands).


	Year Ended December 31,
	2023		2022
Beginning asset retirement obligations	$	53,741	$	41,959
Liabilities incurred during period	6,944		4,069
Liabilities settled during period	(1,634)		(1,198)
Revisions in estimated cash flows	21,642		10,794
Acquisitions during the period	8,326		—
Divestitures during the period	(872)		(4,304)
Accretion expense	3,943		2,421
Ending asset retirement obligations	92,090		53,741
Less: current asset retirement obligations(1)	(4,605)		(756)
Long-term asset retirement obligations	$	87,485	$	52,985

__________________

(1)Included in “Accrued liabilities” in the Company’s consolidated balance sheets at December 31, 2023 and 2022.