Asset Retirement Obligations

12 Months Ended

Dec. 31, 2017

Asset Retirement Obligations [Abstract]

Note H – Asset Retirement Obligations

The asset retirement obligations liabilities (ARO) recognized by the Company at December 31, 2017 and 2016 are related to the estimated costs to dismantle and abandon its producing oil and gas properties and related equipment.

A reconciliation of the beginning and ending aggregate carrying amount of the asset retirement obligation for 2017 and 2016 is shown in the following table.



(Thousands of dollars)	2017		2016
Balance at beginning of year	$	781,057	825,312
Accretion expense		42,590	46,742
Liabilities incurred		52,331	13,690
Revisions of previous estimates		(47,612)	(4,511)
Liabilities settled		(29,111)	(20,589)
Liabilities assumed by purchaser of oil and gas assets		(87,456)	(91,883)
Changes due to translation of foreign currencies		10,340	12,296
Balance at end of year		722,139	781,057
Liabilities reported as held for sale at end of year1		–	(85,900)
Current portion of liability at end of year2		(12,840)	(13,629)
Noncurrent portion of liability at end of year	$	709,299	681,528

1Liabilities held for sale related to Seal properties in Canada which were sold in January 2017.

2Included in Other accrued liabilities on the Consolidated Balance Sheet.

The estimation of future ARO is based on a number of assumptions requiring professional judgment. The Company cannot predict the type of revisions to these assumptions that may be required in future periods due to the availability of additional information such as: prices for oil field services, technological changes, governmental requirements and other factors.

In 2017, revisions of previous estimates primarily reflect the impact of lower rig service rates in the U.S.