Asset Retirement Obligation

9 Months Ended

Sep. 30, 2012

Asset Retirement Obligation Disclosure [Abstract]

The following table summarizes the activity for the Company's asset retirement obligation (ARO) for the nine months ended September 30, 2012 and 2011:



	Nine Months Ended
	September 30,
(in thousands)	2012			2011
Beginning balance at January 1	$	64,019		$	53,443
Liabilities incurred	5,862			2,169
Liabilities settled	(2,763		)	(1,921		)
Liabilities assumed	2,651			119
Disposition of assets	(705		)	—
Accretion expense	4,201			3,593
Revisions in estimated cash flows	10,992			4,308
Ending balance at September 30	$	84,257		$	61,711

ARO reflects the estimated present value of the amount of dismantlement, removal, site reclamation and similar activities associated with the Company's oil and natural gas properties. Inherent in the fair value calculation of ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlement and changes in the legal, regulatory, environmental and political environments. To the extent future revisions to these assumptions impact the fair value of the existing ARO liability, a corresponding adjustment is made to the oil and natural gas property balance.

- Definition

The entire disclosure for an asset retirement obligation and the associated long-lived asset. An asset retirement obligation is a legal obligation associated with the disposal or retirement from service of a tangible long-lived asset that results from the acquisition, construction or development, or the normal operations of a long-lived asset, except for certain obligations of lessees.

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