Asset Retirement Obligation

6 Months Ended

Jun. 30, 2011

Asset Retirement Obligation [Abstract]

Note 5 — 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):


	Six Months Ended
	June 30,
	2011			2010
Asset retirement obligation, beginning of period	$	24,592		$	23,916
Liabilities incurred		100			—
Liabilities settled		(513	)		(6,478	)
Accretion expense		1,179			876
Revisions in estimated cash flows		—			567

Asset retirement obligation, end of period		25,358			18,881
Less: current portion of asset retirement obligation		(674	)		(1,941	)

Long-term asset retirement obligation	$	24,684		$	16,940

- 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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