Annual report pursuant to Section 13 and 15(d)

Supplemental Information on Oil and Natural Gas Properties (unaudited) (Tables)

v3.8.0.1
Supplemental Information on Oil and Natural Gas Properties (unaudited) (Tables)
12 Months Ended
Dec. 31, 2017
Oil and Gas Exploration and Production Industries Disclosures [Abstract]  
Capitalized Costs Relating to Oil and Natural Gas Activities
The following table discloses certain financial data relating to the Company’s oil and natural gas activities, all of which are located in the United States.

 
For the Year Ended December 31,

 
2017
 
2016
 
2015
Evaluated Properties (a)
 
 
 
 
 
 
   Beginning of period balance
 
$
2,754,353

 
$
2,335,223

 
$
2,077,985

   Capitalized G&A expenses
 
11,982

 
12,222

 
10,529

   Property acquisition costs (b)
 
144,358

 
216,561

 
26,726

   Exploration costs
 
239,453

 
38,612

 
81,320

   Development costs
 
279,424

 
151,735

 
138,663

   End of period balance
 
$
3,429,570

 
$
2,754,353

 
$
2,335,223

Unevaluated Properties (a)(c)
 
 
 
 
 
 
   Beginning of period balance
 
$
668,721

 
$
132,181

 
$
142,525

   Property acquisition costs (b)
 
590,308

 
548,673

 
5,520

   Exploration costs
 
6,374

 
8,631

 
4,576

   Capitalized interest expenses
 
33,783

 
19,857

 
10,459

   Transfers to Evaluated Properties
 
(131,170
)
 
(40,621
)
 
(30,899
)
   End of period balance
 
$
1,168,016

 
$
668,721

 
$
132,181

Accumulated depreciation, depletion and amortization
 
 
 
 
 
 
   Beginning of period balance
 
$
1,947,673

 
$
1,756,018

 
$
1,478,355

   Provision charged to expense
 
115,897

 
71,330

 
69,228

   Write-down of oil and natural gas properties (a)
 

 
95,788

 
208,435

   Sale of mineral interests and equipment (a)
 
20,525

 
24,537

 

   End of period balance
 
$
2,084,095

 
$
1,947,673

 
$
1,756,018

(a)
The Company uses the full cost method of accounting for its exploration and development activities. See the Company’s accounting policy about oil and natural gas properties in Note 2 for details on the full cost method of accounting.
(b)
See Note 3 in the Footnotes to the Financial Statements for additional information about the Company’s significant acquisitions.
(c)
Unevaluated property costs primarily include lease acquisition costs, unevaluated drilling costs, seismic, capitalized interest expenses and certain overhead costs related to exploration and development. These costs are directly related to the acquisition and evaluation of unproved properties. The excluded costs and related reserves are included in the amortization base as the properties are evaluated and proved reserves are established or impairment is determined. The majority of these costs are primarily associated with the Company’s focus areas of its future development program and are expected to be evaluated over ten to fifteen years. The Company’s unevaluated property balance of $1,168,016 as of December 31, 2017, consisted of $121,096, $447,925, $26,648 and $572,347 of costs attributable to our Monarch, WildHorse, Ranger and Spur operating areas, respectively.
Schedule of Proved Developed and Undeveloped Oil and Gas Reserve Quantities
The following tables disclose changes in the estimated net quantities of oil and natural gas reserves, all of which are located onshore within the continental United States:
໿

 
For the Year Ended December 31,
Proved developed and undeveloped reserves:
 
2017
 
2016
 
2015
Oil (MBbls):
 
 
 
 
 
 
Beginning of period
 
71,145

 
43,348

 
25,733

Revisions to previous estimates
 
(5,171
)
 
(5,738
)
 
(1,632
)
Purchase of reserves in place
 
8,388

 
25,054

 
2,932

Sale of reserves in place
 

 
(1,718
)
 
(23
)
Extensions and discoveries
 
39,267

 
14,479

 
19,127

Production
 
(6,557
)
 
(4,280
)
 
(2,789
)
End of period
 
107,072

 
71,145

 
43,348

Natural Gas (MMcf):
 
 
 
 
 
 
Beginning of period
 
122,611

 
65,537

 
42,548

Revisions to previous estimates
 
6,336

 
13,929

 
4,870

Purchase of reserves in place
 
12,711

 
36,474

 
2,915

Sale of reserves in place
 

 
(2,765
)
 
(105
)
Extensions and discoveries
 
48,648

 
17,194

 
19,621

Production
 
(10,896
)
 
(7,758
)
 
(4,312
)
End of period
 
179,410

 
122,611

 
65,537


 
For the Year Ended December 31,
Proved developed reserves:
 
2017
 
2016
 
2015
Oil (MBbls):
 
 
 
 
 
 
Beginning of period
 
32,920

 
22,257

 
14,006

End of period
 
51,920

 
32,920

 
22,257

Natural gas (MMcf):
 
 
 
 
 
 
Beginning of period
 
61,871

 
38,157

 
25,171

End of period
 
104,389

 
61,871

 
38,157

MBOE:
 
 
 
 
 
 
Beginning of period
 
43,232

 
28,617

 
18,201

End of period
 
69,318

 
43,232

 
28,617

Proved undeveloped reserves:
 
 
 
 
 
 
Oil (MBbls):
 
 
 
 
 
 
Beginning of period
 
38,225

 
21,091

 
11,727

End of period
 
55,152

 
38,225

 
21,091

Natural gas (MMcf):
 
 
 
 
 
 
Beginning of period
 
60,740

 
27,380

 
17,377

End of period
 
75,021

 
60,740

 
27,380

MBOE:
 
 
 
 
 
 
Beginning of period
 
48,348

 
25,654

 
14,623

End of period
 
67,656

 
48,348

 
25,654

Oil and Gas Net Production, Average Sales Price and Average Production Costs Disclosure
The following table summarizes the average 12-month oil and natural gas prices net of differentials for the respective periods:
໿

 
2017
 
2016
 
2015
Average 12-month price, net of differentials, per Mcf of natural gas (a)
 
$
3.47

 
$
2.71

 
$
2.73

Average 12-month price, net of differentials, per barrel of oil (b)
 
$
49.48

 
$
40.03

 
$
47.25

(a)
Includes a high Btu content of separator natural gas and adjustments to reflect the Btu content, transportation charges and other fees specific to the individual properties.
(b)
Includes adjustments to reflect all wellhead deductions and premiums on a property-by-property basis, including transportation costs, location differentials and crude quality.
Standardized Measure of Discounted Future Cash Flows Relating to Proved Reserves Disclosure

 
Standardized Measure

 
For the Year Ended December 31,

 
2017
 
2016
 
2015
Future cash inflows
 
$
5,920,328

 
$
3,180,005

 
$
2,227,463

Future costs
 
 
 
 
 
 
Production
 
(1,692,871
)
 
(974,667
)
 
(827,555
)
Development and net abandonment
 
(680,948
)
 
(384,117
)
 
(239,100
)
Future net inflows before income taxes
 
3,546,509

 
1,821,221

 
1,160,808

Future income taxes (a)
 
(166,985
)
 
(1,602
)
 

Future net cash flows
 
3,379,524

 
1,819,619

 
1,160,808

10% discount factor
 
(1,822,842
)
 
(1,009,787
)
 
(589,918
)
Standardized measure of discounted future net cash flows
 
$
1,556,682

 
$
809,832

 
$
570,890

໿
(a)
As of December 31, 2017, 2016, and 2015 the Company’s statutory tax rate applied was 21%, 35%, and 35%, respectively.


 
Changes in Standardized Measure

 
For the Year Ended December 31,

 
2017
 
2016
 
2015
Standardized measure at the beginning of the period
 
$
809,832

 
$
570,890

 
$
579,542

Sales and transfers, net of production costs
 
(294,172
)
 
(150,628
)
 
(110,476
)
Net change in sales and transfer prices, net of production costs
 
176,234

 
(103,136
)
 
(286,660
)
Net change due to purchases and sales of in place reserves
 
129,454

 
260,859

 
37,616

Extensions, discoveries, and improved recovery, net of future production and development costs incurred
 
635,000

 
180,228

 
184,469

Changes in future development cost
 
36,983

 
82,320

 
108,216

Revisions of quantity estimates
 
(79,325
)
 
(35,938
)
 
(12,625
)
Accretion of discount
 
80,983

 
57,091

 
62,968

Net change in income taxes
 
(20,073
)
 
16

 
35,407

Changes in production rates, timing and other
 
81,766

 
(51,870
)
 
(27,567
)
Aggregate change
 
746,850

 
238,942

 
(8,652
)
Standardized measure at the end of period
 
$
1,556,682

 
$
809,832

 
$
570,890