Note 11 - AROs |
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation Disclosure [Text Block] |
Pipelines and Facilities and Oil and Gas Properties Although our pipelines and facilities assets are inactive, we have AROs associated with decommissioning our pipelines and facilities assets and plugging and abandoning our oil and gas properties. We recorded a discounted liability for the fair value of an ARO with a corresponding increase to the carrying value of the related long-lived asset when the asset was installed or placed in service, and we depreciated the amount added to property and equipment. During the twelve months ended December 31, 2023 and 2022, we recorded an additional impairment of $1.6 million and $0.1 million, respectively, due to an additional change in the timing and cost of decommissioning these assets. We will recognize accretion expense through the anticipated decommissioning completion date.
Because our pipelines and facilities assets have been inactive for an extended period, BOEM mandated that they be decommissioned. In October 2023, management met BSEE to discuss BDPL’s path forward for meeting decommissioning requirements. Management worked with a consultant to develop a decommissioning plan, and BDPL submitted its decommissioning plan to the agency in November 2023. Although the decommissioning of these assets was delayed due to cash constraints associated with historical net losses and the impact of COVID-19, a significant portion of the decommissioning project was completed from late December 2023 to mid- February 2024. Additional work is planned for the second quarter of 2024. Based on resource availability and projected weather conditions, we believe decommissioning and remediation of all associated INCs will be completed by the end of the second quarter 2024. See “Note (15)” for additional disclosures related to decommissioning our offshore pipelines, platform assets, and related risks. At December 31, 2023 and 2022, BDPL maintained $4.5 million and $3.7 million, respectively, in AROs related to the abandonment of these assets, which amount does not include potential penalties.
The ARO liability consisted of the following:
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