Asset Retirement Obligations

3 Months Ended

Mar. 31, 2023

Asset Retirement Obligations

Asset Retirement Obligations

10. Asset Retirement Obligations

The following is a continuity of the Company’s asset retirement obligations:

	March 31, 2023			December 31, 2022
Beginning balance	$	5,316,470		$	8,993,108
Accretion expense		52,731			264,075
Impact of hyperinflation		(4,176	)		(69,379	)
Change in estimate		331,643			(3,871,334	)
Ending balance	$	5,696,668		$	5,316,470

The Company’s asset retirement obligations (“ARO”) result from its interest in oil and gas assets including well sites. The total ARO is estimated based on the Company’s net ownership interest in all sites, estimated costs to reclaim and abandon these wells and the estimated timing of the costs to be included in future years. The Company estimated the total undiscounted amount required to settle the ARO as at March 31, 2023 is $14.4 million (December 31, 2022 - $14.4 million). The ARO is calculated using an inflation rate of 2.5% (December 31, 2022 – 2.5%) and discounted using an interest free rate of 3.74% (December 31, 2022 – 3.91%) between 10 and 20 years.