W&T Offshore, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

ASSET RETIREMENT OBLIGATIONS

ASSET RETIREMENT OBLIGATIONS

12 Months Ended

Dec. 31, 2023

NOTE 8 — ASSET RETIREMENT OBLIGATIONS

Asset retirement obligations associated with the retirement and decommissioning of tangible long-lived assets are required to be recognized as a liability in the period in which a legal obligation is incurred and becomes determinable,

with an offsetting increase in the carrying amount of the associated asset. The cost of the tangible asset, including the initially recognized ARO, is depleted such that the cost of the ARO is recognized over the useful life of the asset. The fair value of the ARO is measured using expected cash outflows associated with the ARO, discounted at the Company’s credit-adjusted risk-free rate when the liability is initially recorded. Accretion expense is recognized over time as the discounted liability is accreted to its expected settlement value.

The following changes in liability are included in the Consolidated Balance Sheet in current and long-term liabilities, and the changes in that liability were as follows (in thousands):


	Year Ended December 31,
	2023		2022
Asset retirement obligations, beginning of period	$	466,430	$	424,495
Liabilities settled		(33,970)		(76,225)
Accretion expense		29,018		26,508
Liabilities acquired		16,352		33,202
Liabilities incurred		129		138
Revisions of estimated liabilities		20,856		58,312
Asset retirement obligations, end of period		498,815		466,430
Less: Current portion		(31,553)		(25,359)
Long-term	$	467,262	$	441,071