Quarterly report pursuant to Section 13 or 15(d)

Property and Equipment, Net

v3.21.2
Property and Equipment, Net
9 Months Ended
Sep. 30, 2021
Property, Plant and Equipment [Abstract]  
Property and Equipment, Net Property and Equipment, Net
As of September 30, 2021 and December 31, 2020, total property and equipment, net consisted of the following:
September 30, 2021 December 31, 2020
Oil and natural gas properties, full cost accounting method (In thousands)
Evaluated properties $8,341,434  $7,894,513 
Accumulated depreciation, depletion, amortization and impairments (5,775,833) (5,538,803)
Evaluated properties, net 2,565,601  2,355,710 
Unevaluated properties
Unevaluated leasehold and seismic costs 1,453,255  1,532,304 
Capitalized interest 259,173  200,946 
Total unevaluated properties 1,712,428  1,733,250 
Total oil and natural gas properties, net $4,278,029  $4,088,960 
Other property and equipment $60,396  $60,287 
Accumulated depreciation (29,805) (28,647)
Other property and equipment, net $30,591  $31,640 
The Company capitalized internal costs of employee compensation and benefits, including share-based compensation, directly associated with acquisition, exploration and development activities totaling $10.4 million and $10.3 million for the three months ended September 30, 2021 and 2020, respectively, and $33.7 million and $26.7 million for the nine months ended September 30, 2021 and 2020, respectively.
The Company capitalized interest costs to unproved properties totaling $26.1 million and $20.7 million for the three months ended September 30, 2021 and 2020, respectively, and $74.0 million and $65.6 million for the nine months ended September 30, 2021 and 2020, respectively.
Impairment of Evaluated Oil and Gas Properties
For the three and nine months ended September 30, 2021, the capitalized costs of oil and gas properties did not exceed the cost center ceiling. As a result, the Company did not recognize an impairment in the carrying value of evaluated oil and gas properties for the three and nine months ended September 30, 2021.
Primarily due to declines in the average realized prices for sales of oil on the first calendar day of each month during the trailing 12-month period (“12-Month Average Realized Price”) prior to September 30, 2020, the capitalized costs of oil and gas properties exceeded the cost center ceiling, resulting in an impairment in the carrying value of evaluated oil and gas properties for the three and nine months ended September 30, 2020.
Details of the 12-Month Average Realized Price of crude oil for the three and nine months ended September 30, 2021 and 2020 are summarized in the table below:
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Impairment of evaluated oil and gas properties (in thousands) $— $684,956 $— $1,961,474
Beginning of period 12-Month Average Realized Price ($/Bbl) $48.06 $45.87 $37.44 $53.90
End of period 12-Month Average Realized Price ($/Bbl) $56.47 $41.71 $56.47 $41.71
Percent increase (decrease) in 12-Month Average Realized Price 17  % (9  %) 51  % (23  %)