6. ASSET RETIREMENT OBLIGATIONS
The following table reflects the components of the changes in the carrying amount of the asset retirement obligations for the years ended January 31, 2013 and 2012:
|
|
|
|
|
|
|
|
|
|
|
2013 |
|
2012 |
||
|
Balance, beginning of period |
|
$ |
1,623,289 |
|
$ |
1,403,697 |
|
Liabilities incurred |
|
|
1,769,615 |
|
|
423,111 |
|
Revision of estimates |
|
|
147,862 |
|
|
(52,966) |
|
Sale of assets |
|
|
(48,441) |
|
|
(13,822) |
|
Liabilities settled |
|
|
(253,476) |
|
|
(303,656) |
|
Accretion |
|
|
183,501 |
|
|
166,925 |
|
Balance, end of period |
|
|
3,422,350 |
|
|
1,623,289 |
|
Less current portion of obligations |
|
|
(2,948,790) |
|
|
(1,539,871) |
|
Long-term asset retirement obligations |
|
$ |
473,560 |
|
$ |
83,418 |
|
|
|
|
|
|
|
|
The $2,948,790 of current obligations consist of (a) an estimated $1,448,790 for (i) reclamation of man-made “ponds” holding produced formation water and (ii) the plugging and abandonment of well bores in the Maritimes Basin of Canada and (b) $1,500,000 for the estimated costs to plug and abandon several producing (but marginally economic) vertical wells drilled years ago on North Dakota leases we acquired in the second half of fiscal year 2013. These North Dakota leases are “held by production”, i.e., continue in force by production. We intend to drill, complete and produce horizontal wells on the leases in fiscal year 2014, allowing us to plug and abandon the marginally economic vertical wells and still hold the leases by production.