Asset Retirement Obligations

6 Months Ended

Jun. 30, 2011

Asset Retirement Obligations

Asset Retirement Obligations

NOTE 7 – 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 (AROs). 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 of our AROs relate to the plugging costs associated with our oil and gas wells.

The following table shows certain information about our AROs for the periods indicated:

	Six Months Ended June 30,
	2011			2010
	(In thousands)
ARO liability, January 1:	$	69,265		$	56,404
Accretion of discount		1,735			1,393
Liability incurred		2,879			1,402
Liability settled		(666	)		(442	)
Revision of estimates		9			91
ARO liability, June 30:		73,222			58,848
Less current portion		1,781			1,760
Total long-term ARO liability	$	71,441		$	57,088