Annual report pursuant to Section 13 and 15(d)

ASSET RETIREMENT OBLIGATIONS

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ASSET RETIREMENT OBLIGATIONS
 12 Months Ended
Dec. 31, 2017
Asset Retirement Obligation Disclosure [Abstract]  
ASSET RETIREMENT OBLIGATIONS

NOTE 10. ASSET RETIREMENT OBLIGATIONS

 

During the calendar years presented, the Company brought a number of oil and gas wells into productive status and will have asset retirement obligations once the wells are permanently removed from service. The primary obligations involve the removal and disposal of surface equipment, plugging and abandoning the wells, and site restoration. For the purpose of determining the fair value of ARO incurred during the calendar years presented, the Company used the following assumptions:

 

    December 31, 2017  
Inflation rate (avg.)     2.1 %
Estimated asset life     21 years  

 

The following table shows the change in the Company’s ARO for 2017 and 2016:

 

Asset retirement obligations at December 31, 2015   $ 213,328  
         
Obligations assumed in acquisitions     70,384  
Additional retirement obligations incurred     —  
Change in estimate     —  
Accretion expense     38,998  
Settlements     —  
         
Asset retirement obligations at December 31, 2016   $ 322,710  
         
Obligations assumed in acquisition     101,405  
Additional retirement obligations incurred     —  
Change in estimate     —  
Accretion expense     49,753  
Settlements     —  
         
Asset retirement obligations at December 31, 2017   $ 473,868