Annual report pursuant to Section 13 and 15(d)

ASSET RETIREMENT OBLIGATIONS

ASSET RETIREMENT OBLIGATIONS

12 Months Ended

Dec. 31, 2015

Asset Retirement Obligation Disclosure [Abstract]

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, 2015
Inflation rate (avg.)		1.6	%
Estimated asset life		16 years

The following table shows the change in the Company’s ARO for 2015 and 2014:

Asset retirement obligations at December 31, 2013	$	12,804

Obligations assumed in acquisition		—
Additional retirement obligations incurred		19,418
Change in estimate		66,081
Accretion expense		1,872
Settlements		—

Asset retirement obligations at December 31, 2014	$	100,175

Obligations assumed in acquisition		26,201
Additional retirement obligations incurred
Change in estimate		75,096
Accretion expense		11,856
Settlements		—

Asset retirement obligations at December 31, 2015	$	213,328