Asset Retirement Obligations

9 Months Ended

Sep. 30, 2021

Asset Retirement Obligation Disclosure [Abstract]

ASSET RETIREMENT OBLIGATIONS

We are required to record the estimated fair value of the liabilities relating to the future retirement of our long-lived assets. Our oil and natural gas wells are plugged and abandoned when the oil and natural gas reserves in those wells are depleted or the wells are no longer able to produce. The plugging and abandonment liability for a well is recorded in the period in which the obligation is incurred (at the time the well is drilled or acquired). None of our assets are restricted for purposes of settling these AROs. All our AROs relate to the plugging costs associated with our oil and gas wells.

The following table shows certain information about our estimated AROs for the periods indicated (in thousands):


ARO liability, December 31, 2020 (Successor):	$	23,356
Accretion of discount	1,381
Liability incurred	4
Liability settled	(852)
Liability sold	(1,925)
Revision of estimates (1)	4,408
ARO liability, September 30, 2021 (Successor):	26,372
Less: current portion	2,455
Total long-term ARO	$	23,917

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1.Plugging liability estimates were revised in 2021 for updates in the cost of services used to plug wells over the preceding year as well as estimated inflation and discount rates. We had various upward and downward adjustments.





ARO liability, December 31, 2019 (Predecessor)	$	66,627
Accretion of discount	1,545
Liability incurred	465
Liability settled	(838)
Liability sold	(487)
Revision of estimates (1)	(28,328)
ARO liability, August 31, 2020 (Predecessor)	38,984
Fresh start adjustments	(14,393)
ARO liability, August 31, 2020 (Successor)	24,591
Accretion of discount	116
Liability incurred	141
Liability settled	(51)
Liability sold	—
Revision of estimates	125
ARO liability, September 30, 2020 (Successor)	24,922
Less current portion	2,186
Total long-term ARO	$	22,736

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1.Plugging liability estimates were revised in 2020 for updates in the cost of services used to plug wells over the preceding year. We had various upward and downward adjustments.