Asset Retirement Obligation
 12 Months Ended
Dec. 31, 2013
Asset Retirement Obligation

Note 8 — Asset Retirement Obligation

Resolute’s estimated asset retirement obligation liability is based on estimated economic lives, estimates as to the cost to abandon the wells in the future, and federal and state regulatory requirements. The liability is discounted using a credit-adjusted risk-free rate estimated at the time the liability is incurred or revised that ranges between 7% and 12%. Revisions to the liability could occur due to changes in estimated abandonment costs or well economic lives, or if federal or state regulators enact new requirements regarding the abandonment of wells. Asset retirement obligations are valued utilizing Level 3 fair value measurement inputs.

The following table provides a reconciliation of Resolute’s asset retirement obligations for the periods presented, (in thousands):

 

     December 31,  
     2013     2012  

Asset retirement obligations at beginning of period

    $ 19,155      $ 16,553   

Additional liability incurred / acquired

      2,165        2,872   

Accretion expense

      1,327        1,003   

Liabilities settled

      (1,573 )      (1,273 ) 

Revisions to previous estimates

      10,915        —     
  

 

 

    

 

 

  

Asset retirement obligations at end of period

      31,989        19,155   

Less: current asset retirement obligations

      (1,825 )      (3,417 ) 
  

 

 

    

 

 

  

Long-term asset retirement obligations

    $ 30,164      $ 15,738