Asset Retirement Obligations

12 Months Ended

Dec. 31, 2022

Asset Retirement Obligation Disclosure [Abstract]

Note 6—Asset Retirement Obligations

The following table summarizes changes in the Company’s asset retirement obligations (“ARO”) that are associated with its oil and gas properties for the periods presented:


(in thousands)	December 31, 2022		December 31, 2021
Asset retirement obligations, beginning of period	$	17,240	$	17,009
Liabilities assumed in the Merger	21,156		—
Liabilities incurred	1,584		194
Liabilities divested and settled	(546)		(1,226)
Accretion expense	1,605		1,208
Revision to estimated cash flows	(92)		55
Asset retirement obligations, end of period	$	40,947	$	17,240

ARO reflect the present value of the estimated future costs associated with the plugging and abandonment of oil and gas wells, removal of equipment and facilities from leased acreage and land restoration in accordance with applicable local, state and federal laws. Inherent in the fair value calculation of ARO are numerous estimates and assumptions, including plug and abandonment settlement amounts, inflation factors, credit adjusted discount rates and the timing of settlement. To the extent future revisions to these assumptions impact the value of the existing ARO liabilities, a corresponding offsetting adjustment is made to the oil and gas property balance. Changes in the liability due to the passage of time are recognized as an increase in the carrying amount of the liability with an offsetting charge to accretion expense, which is included within depreciation, depletion and amortization.