ePaper: 5 reasons not to use LLR for estimating Asset Retirement Obligation
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As part of their due diligence during A&D transactions, many companies use LLR as a tool to estimate longer-term Asset Retirement Obligations. Unfortunately, the AER’s LLR model was never intended for this purpose and almost always yields an unrealistic expectation of ARO. This paper highlights 5 areas where the AER’s LLR model falls short, leading to unrealistic expectations of ultimate retirement obligations.
Working with industry experts, XI Technologies has developed an effective ARO Cost Model that addresses these shortcomings, enabling companies to get a more reliable estimate of ARO much earlier in the A&D planning process.