Asset Retirement Obligations

9 Months Ended

Dec. 31, 2022

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligations

3. Asset Retirement Obligations

The Company’s asset retirement obligations (“ARO”) relate to the plugging of wells, the removal of facilities and equipment, and site restoration on oil and gas properties. The fair value of a liability for an ARO is recorded in the period in which it is incurred, discounted to its present value using the credit adjusted risk-free interest rate, and a corresponding amount capitalized by increasing the carrying amount of the related long-lived asset. The liability is accreted each period until the liability is settled or the well is sold, at which time the liability is removed. The related asset retirement cost is capitalized as part of the carrying amount of our oil and natural gas properties. The ARO is included in the consolidated balance sheets with the current portion being included in the accounts payable and other accrued expenses.

The following table provides a rollforward of the AROs for the first nine months of fiscal 2022:

Carrying amount of asset retirement obligations as of April 1, 2022	$	735,512
Liabilities incurred		21,554
Liabilities settled		(43,479	)
Accretion expense		22,902
Carrying amount of asset retirement obligations as of December 31, 2022		736,489
Less: Current portion		15,000
Non-Current asset retirement obligation	$	721,489