Asset Retirement Obligation

12 Months Ended

Dec. 31, 2012

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligation

Asset Retirement Obligation

The Company accounts for asset retirement obligations in accordance with ASC Topic 410-20, which requires recording the fair value of an asset retirement obligation associated with tangible long-lived assets in the period incurred. Asset retirement obligations associated with long-lived assets included within the scope of ASC Topic 410-20 are those for which there is a legal obligation to settle under existing or enacted law, statute, written or oral contract or by legal construction under the doctrine of promissory estoppel. The Company has legal obligations to plug, abandon and dismantle existing wells and facilities that it has acquired and constructed.

The following table describes all changes to the Company’s asset retirement obligation liability (in thousands):

	Year Ended December 31,
	2012			2011
Asset retirement obligation, beginning of period	$	30,427		$	24,592
Liabilities incurred	892			220
Liabilities settled	(2,627		)	(905		)
Accretion expense	2,078			2,049
Revisions in estimated cash flows	(3,510		)	4,471
Asset retirement obligation, end of period	27,260			30,427
Less: current portion of asset retirement obligation	(2,351		)	(3,110		)
Long-term asset retirement obligation	$	24,909		$	27,317

Liabilities settled during 2012 included two offshore fields and one onshore field that were decommissioned. Additionally, the liabilities for three onshore fields were settled due to the sale of the fields. Revisions during 2012 primarily represent revised timing of plugging and abandonment operations. Revisions during 2011 primarily represent increased cost estimates to decommission the Company’s offshore fields including platforms, pipelines and the related wells.