Annual report pursuant to Section 13 and 15(d)

Asset Retirement Obligations

v2.4.0.8
Asset Retirement Obligations
 12 Months Ended
Jun. 30, 2013
Asset Retirement Obligation Disclosure [Abstract]  
Asset Retirement Obligations
Note 4 - Asset Retirement Obligations
The estimated valuation of asset retirement obligations ("AROs") are based on management's historical experience and best estimate of plugging and abandonment costs by field. Assumptions and judgments made by management when assessing an ARO include: (i) the existence of a legal obligation; (ii) estimated probabilities, amounts, and timing of settlements; (iii) the credit-adjusted risk-free rate to be used; and (iv) inflation rates. Accretion expense is recorded under depletion, depreciation, amortization, and accretion in the consolidated statement of operations.
If the fair value of a recorded AROs change, a revision is recorded to both the ARO and the asset retirement capitalized cost. The revision recognized during fiscal year ended June 30, 2013, primarily resulted from a change in the expected timing of estimated abandonment cost for our oil and gas properties.
The following table summarizes the asset retirement obligation activity for the fiscal years ended:
 
June 30,
 
2013
 
2012
 
(In thousands)
Fiscal year opening balance
$
7,784

 
$
11,397

Liabilities assumed
3

 
3,035

Liabilities incurred
—

 
398

Accretion expense
433

 
568

Sale of assets
—

 
(6,773
)
Revision to estimate
(758
)
 
(603
)
Effect of exchange rate changes
(583
)
 
(238
)
Fiscal year closing balance
6,879

 
7,784

Less current asset retirement obligation
476

 
329

Long term asset retirement obligation
$
6,403

 
$
7,455