Annual report pursuant to Section 13 and 15(d)

ASSET RETIREMENT OBLIGATIONS

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ASSET RETIREMENT OBLIGATIONS
12 Months Ended
Dec. 31, 2020
Asset Retirement Obligation [Abstract]  
ASSET RETIREMENT OBLIGATIONS ASSET RETIREMENT OBLIGATIONS
The Company has asset retirement obligations associated with the future plugging and abandonment of proved properties and related facilities.  Initially, the fair value of a liability for an ARO is recorded in the period in which it is incurred and a corresponding increase in the carrying amount of the related long-lived asset.  The liability is accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the related asset.  If the liability is settled for an amount other than the recorded amount, an adjustment to the full cost pool is recognized.  The Company has no assets that are legally restricted for purposes of settling asset retirement obligations.

Inherent in the fair value calculation are numerous assumptions and judgments including the ultimate retirement costs, inflation factors, credit-adjusted risk-free discount rates, timing of retirement, and changes in the legal, regulatory, environmental and political environments.  To the extent future revisions to these assumptions impact the present value of the existing ARO, a corresponding adjustment is made to the oil and gas property balance.  For example, as the Company analyzes actual plugging and abandonment information, the Company may revise its estimate of current costs, the assumed annual inflation of the costs and/or the assumed productive lives of its wells.  During 2020 and 2019, there were no adjustments to the aforementioned assumptions requiring revisions of previous estimates.

The following table summarizes the Company’s asset retirement obligation transactions recorded during the years ended December 31, 2020 and 2019.
  December 31,
(in thousands) 2020 2019
Beginning Asset Retirement Obligations $ 17,299  $ 12,501 
Liabilities Acquired During the Period —  2,680 
Liabilities Incurred During the Period 688  1,361 
Revision of Estimates 21  — 
Accretion of Discount on Asset Retirement Obligations 1,192  973 
Liabilities Settled During the Period (20) (216)
Ending Asset Retirement Obligations $ 19,181  $ 17,299