The fair value of a liability for an asset retirement obligation is recognized in the period in which it is incurred by capitalizing it as part of the carrying amount of the long-lived assets. The Company records asset retirement obligations for the future abandonment costs of tangible assets such as platforms, wells, pipelines and other facilities. The liability is accreted to its then present value each period, and the capitalized cost is depreciated over the useful life of the related asset. If the liability is settled for an amount other than the recorded amount, a gain or loss is recognized.

A summary of the recording of the estimated fair value of the Company’s asset retirement obligations is presented as follows:

During the year ended December 31, 2014, the Company increased the asset retirement obligations to recognize the abandonment liability for two new platforms and two wells offshore Gabon.  In the year ended December 31, 2013, the Company increased the asset retirement obligations to recognize the abandonment liability for two wells offshore Gabon.  The 2012 cost revision of $5.7 million was primarily due to changes in asset retirement cost estimates on the Etame block offshore Gabon.

The Company does not plan to abandon any material assets over the next five years.