Send us Feedback

Chesapeake Energy (CHK)
Analysis
SUMMARY
BULLS
BEARS
TOPICS
Data
DATA CENTRAL
STOCK CHART
Financials
SEC FILINGS
BALANCE
INCOME
CASH FLOW

CHK » Topics » Asset Retirement Obligations

This excerpt taken from the CHK 8-K filed Jun 25, 2009.

Asset Retirement Obligations

Chesapeake follows Statement of Financial Accounting Standards (SFAS) No. 143, Accounting for Asset Retirement Obligations. This statement applies to obligations associated with the retirement of tangible long-lived assets that result from the acquisition, construction and development of the assets.

SFAS 143 requires that the fair value of a liability for a retirement obligation be recognized in the period in which the liability is incurred. For natural gas and oil properties, this is the period in which a natural gas or oil well is acquired or drilled. The asset retirement obligation is capitalized as part of the carrying amount of our natural gas and oil properties at its discounted fair value. The liability is then accreted each period until the liability is settled or the well is sold, at which time the liability is reversed.

These excerpts taken from the CHK 10-K filed Mar 2, 2009.

Asset Retirement Obligations

Chesapeake follows Statement of Financial Accounting Standards (SFAS) No. 143, Accounting for Asset Retirement Obligations. This statement applies to obligations associated with the retirement of tangible long-lived assets that result from the acquisition, construction and development of the assets.

SFAS 143 requires that the fair value of a liability for a retirement obligation be recognized in the period in which the liability is incurred. For natural gas and oil properties, this is the period in which a natural gas or oil well is acquired or drilled. The asset retirement obligation is capitalized as part of the carrying amount of our natural gas and oil properties at its discounted fair value. The liability is then accreted each period until the liability is settled or the well is sold, at which time the liability is reversed.

14. Asset Retirement Obligations

The components of the change in our asset retirement obligations are shown below:

 

     Years Ended December 31,  
     2008     2007  
     ($ in millions)  

Asset retirement obligations, beginning of period

    $ 236     $ 193  

Additions

      21       19  

Revisions (a)

      —       10  

Settlements and disposals

      (5 )     (1 )

Accretion expense

      17       15  
                

Asset retirement obligations, end of period

    $ 269     $ 236  
                

 

118

Table of Contents

CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 

 

(a) Based on increasing service costs, we revised our asset retirement obligation related to natural gas and oil wells in 2007.
This excerpt taken from the CHK 10-K filed Feb 29, 2008.

12. Asset Retirement Obligations

The components of the change in our asset retirement obligations are shown below:

 

    

Years Ended December 31,

  
       2007         2006    
     ($ in millions)  

Asset retirement obligations, beginning of period

    $ 193     $ 157  

Additions

      19       22  

Revisions (a)

      10       3  

Settlements and disposals

      (1 )     (1 )

Accretion expense

      15       12  
                

Asset retirement obligations, end of period

    $ 236     $ 193  
                

 

(a) Based on increasing service costs, we revised our asset retirement obligation related to oil and natural gas wells in 2007 and 2006.
This excerpt taken from the CHK 10-K filed Mar 1, 2007.

12. Asset Retirement Obligations

The components of the change in our asset retirement obligations are shown below:

 

    

Years Ended

December 31,

  
     2006     2005  
     ($ in thousands)  

Asset retirement obligations, beginning of period

    $ 156,593     $ 73,718  

Additions

      21,958       51,168  

Revisions (a)

      3,021       26,731  

Settlements and disposals

      (1,006 )     (1,087 )

Accretion expense

      12,206       6,063  
                

Asset retirement obligations, end of period

    $ 192,772     $ 156,593  
                
(a) Based on increasing service costs, we revised our asset retirement obligation related to oil and natural gas wells in 2006 and 2005.
This excerpt taken from the CHK 10-K filed Mar 14, 2006.

12. Asset Retirement Obligations

Effective January 1, 2003, Chesapeake adopted SFAS 143, Accounting for Asset Retirement Obligation. This statement applies to obligations associated with the retirement of tangible, long-lived assets that result from the acquisition, construction and development of the assets.

The components of the change in our asset retirement obligations are shown below:

 

     Years Ended
December 31,		  
     2005     2004  
     ($ in thousands)  

Asset retirement obligations, beginning of period

    $ 73,718     $ 48,812  

Additions

      51,168       21,862  

Revisions (a)

      26,731       —    

Settlements and disposals

      (1,087 )     (1,613 )

Accretion expense

      6,063       4,657  
                

Asset retirement obligations, end of period

    $ 156,593     $ 73,718  
                
(a) Based on increasing service costs, we have revised our asset retirement obligation related to oil and gas wells in 2005.
This excerpt taken from the CHK 8-K filed Nov 1, 2005.

5. Asset Retirement Obligations

 

The Company has legal retirement obligations for wells, well lines, compressor stations, gathering lines, treatment and injection facilities, and disposal wells. An asset retirement obligation has been recognized for all asset classes where a reasonable estimate of fair value can be made. Most of the retirement obligations are related to wells, well lines, and other exploration and production assets. Compressor stations and gathering lines presently have indeterminate lives; therefore, an estimate of the liability for the associated retirement obligations is not calculable. The following table summarizes the progression of the asset retirement obligation for the years ended December 31, 2004 and 2003:

 

(Dollars in Thousands)    2004
     2003
  

Asset retirement obligation, beginning of year

    $ 41,611     $ —    

Liabilities assumed with purchase of CER

      —         40,966  

Liabilities incurred during the current period

      646       —    

Liabilities settled during the current period

      (170 )     (2 )

Accretion expense

      2,683       647  

Revisions in estimated cash flows

      —         —    
    
 

Asset retirement obligation, end of year

    $ 44,770     $ 41,611  
    
 

 

20

Columbia Energy Resources, LLC (a wholly owned

subsidiary of Triana Energy Holdings, LLC)

 

Notes to Consolidated Financial Statements (continued)

 

EXCERPTS ON THIS PAGE:

8-K
Jun 25, 2009
10-K (2 sections)
Mar 2, 2009
10-K
Feb 29, 2008
10-K
Mar 1, 2007
10-K
Mar 14, 2006
8-K
Nov 1, 2005

RELATED TOPICS for CHK:

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki