Asset Retirement Obligation (ARO)

12 Months Ended

Dec. 31, 2012

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligation (ARO)

Asset Retirement Obligations (AROs)

The following table summarizes the summarizes the activity for the Company's abandonment obligations:

	Year Ended December 31,
(in thousands)	2012			2011
Beginning balance at January 1	$	64,019		$	53,443
Liabilities incurred	7,249			2,983
Liabilities settled	(3,325		)	(1,803		)
Liabilities assumed	2,651			119
Disposition of assets	(705		)	—
Accretion expense	5,858			4,812
Revisions in estimated cash flows	10,999			4,465
Ending balance at December 31(1)	$	86,746		$	64,019

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(1) The asset retirement obligation related to the Nevada Assets, which were held for sale as of December 31, 2011 and sold effective January 31, 2012, was $0.7 million at December 31, 2011 and is included in the asset retirement obligations liability on the December 31, 2011 Balance Sheets. See Note 2 to the Financial Statements.

AROs 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 the 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.