Asset Retirement Obligations

12 Months Ended

Dec. 31, 2011

Asset Retirement Obligation [Abstract]

Asset Retirement Obligations

Note 3. Asset Retirement Obligations

The following table summarizes the changes in our asset retirement obligations for the years ended December 31, 2011 and 2010:

		Year Ended December 31,
In thousands		2011		2010
Beginning asset retirement obligation		$	85,744	$	54,338
	Liabilities incurred and assumed during period		12,477		4,291
	Liabilities assumed in the Encore Merger		-		43,783
	Revisions in estimated retirement obligations		12,217		5,505
	Liabilities settled during period		(23,225)		(6,622)
	Accretion expense		6,287		6,443
	Sales of properties		(32)		(21,994)
Ending asset retirement obligation			93,468		85,744
	Less: current asset retirement obligation(1)		(4,742)		(4,454)
Long-term asset retirement obligation		$	88,726	$	81,290
(1)	Included in "Accounts payable and accrued liabilities" in our Consolidated Balance Sheets

Liabilities incurred and assumed are primarily related to the drilling of incremental wells, during 2011 to the plugging of old wells in the Tinsley Field, and during 2010 to the Encore Merger. Sales of properties during 2010 are primarily related to the disposition of our non-strategic legacy Encore properties and our interests in ENP. The reversal of these asset retirement obligations, which were assumed by the purchasers, was recorded as an adjustment to the full cost pool with no gain or loss recognized, in accordance with the full cost method of accounting.

We have escrow accounts that are legally restricted for certain of our asset retirement obligations. The balances of these escrow accounts were $34.1 million and $33.1million at December 31, 2011 and 2010, respectively. These balances are recorded at amortized cost and are included in “Other assets” in our Consolidated Balance Sheets. The estimated fair market value of these investments at December 31, 2011 and 2010 approximate cost.