Quarterly report pursuant to Section 13 or 15(d)

ASSET RETIREMENT OBLIGATION

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ASSET RETIREMENT OBLIGATION
6 Months Ended
Jun. 30, 2020
ASSET RETIREMENT OBLIGATION  
ASSET RETIREMENT OBLIGATION

NOTE 9 – ASSET RETIREMENT OBLIGATION

The Company provides for the obligation to plug and abandon oil and gas wells at the dates properties are either acquired or the wells are drilled. The asset retirement obligation is adjusted each quarter for any liabilities incurred or settled during the period, accretion

expense and any revisions made to the estimated cash flows. The asset retirement obligation incurred at the time of drilling was computed using the annual credit-adjusted risk-free discount rate at the applicable dates. Changes in the asset retirement obligation were as follows:

Balance, December 31, 2019

    

$

16,787,219

Liabilities incurred

 

66,387

Liabilities settled

 

(320,580)

Accretion expense

 

463,329

Balance, June 30, 2020

$

16,996,355