DISCOVERY PRODUCER SERVICES, LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 4. Property, Plant, and Equipment
Property, plant, and equipment consisted of the following at December 31, 2011 and 2010:
Years Ended December 31,
Estimated
Depreciable
Lives
2011
2010
(In thousands)
Property, plant, and equipment:
Transportation lines . . . . . . . . . . . . . . . . . . . . . . . . . . $327,497 $322,070 25 —35 years
Plant and other equipment . . . . . . . . . . . . . . . . . . . . .
295,760
291,367 25 —35 years
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,483
5,139 25 —35 years
Land and land rights . . . . . . . . . . . . . . . . . . . . . . . . .
7,910
7,491 0 — 35 years
Construction work in progress . . . . . . . . . . . . . . . . . .
14,937
3,616
Total property, plant, and equipment . . . . . . . . . . . . . .
651,587
629,683
Less accumulated depreciation . . . . . . . . . . . . . . . . . . .
292,021
273,482
Net property, plant, and equipment . . . . . . . . . . . . . . . . $359,566 $356,201
Our asset retirement obligations relate primarily to our offshore platform and pipelines and our onshore
processing and fractionation facilities. At the end of the useful life of each respective asset, we are legally or
contractually obligated to dismantle the offshore platform, properly abandon the offshore pipelines, remove the
onshore facilities and related surface equipment and restore the surface of the property.
A rollforward of our asset retirement obligation for 2011 and 2010 is presented below.
Years Ended December 31,
2011
2010
(In thousands)
Balance at January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $25,575 $23,325
Accretion expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,144
1,937
Estimate revisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
799
313
Liabilities incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Balance at December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $28,518 $25,575
Note 5. Commitments
During 2011, we began the Keathley Canyon Connector project. This is an expansion of our pipe into the
Gulf for purposes of gathering production from the Keathley Canyon, Walker Ridge and Green Canyon areas.
Commitments for pipeline construction and installation of the Keathley Canyon Connector are approximately
$158.7 million at December 31, 2011. Commitments for the steel for the Keathley Canyon Connector contract
executed in January 2012 total $199.7 million.
We lease the land on which the Paradis fractionator and the Larose processing plant are located. The initial
term of each lease expires in 2016 with renewal options for an additional 30 years.
(In thousands)
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 95
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
95
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
95
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
95
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
95
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
$475
230