Annual report pursuant to Section 13 and 15(d)

Asset Retirement Obligations

v2.4.0.8
Asset Retirement Obligations
 12 Months Ended
Jun. 30, 2014
Asset Retirement Obligation Disclosure [Abstract]  
Asset Retirement Obligations
Note 6 - Asset Retirement Obligations
The estimated valuation of asset retirement obligations ("AROs") is based on the Company's historical experience and management's 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 statements of operations. If the recorded value of ARO requires revision, the revision is recorded to both the ARO and the asset retirement capitalized cost.
The following table summarizes the asset retirement obligation activity for the fiscal years ended:
 
June 30,
 
2014
 
2013
 
(In thousands)
Fiscal year opening balance
$
6,879

 
$
7,784

Liabilities assumed
7

 
3

Accretion expense
367

 
433

Sale of assets (1)
(4,457
)
 
—

Revision to estimate (2)
—

 
(758
)
Effect of exchange rate changes
77

 
(583
)
Fiscal year closing balance
2,873

 
6,879

Less current asset retirement obligations
397

 
476

Long term asset retirement obligations
$
2,476

 
$
6,403

(1) Related to the sale of the Amadeus Basin assets
(2) The revision primarily resulted from a change in the expected timing of estimated abandonment cost for our oil and gas properties.