Annual report pursuant to Section 13 and 15(d)

Property and Equipment, Net

v3.20.4
Property and Equipment, Net
 12 Months Ended
Dec. 31, 2020
Property, Plant and Equipment [Abstract]  
Property and Equipment, Net Property and Equipment, Net
As of December 31, 2020 and 2019, total property and equipment, net consisted of the following:
As of December 31,
2020 2019
Oil and natural gas properties, full cost accounting method (In thousands)
Evaluated properties $7,894,513  $7,203,482 
Accumulated depreciation, depletion, amortization and impairments (5,538,803) (2,520,488)
Evaluated properties, net 2,355,710  4,682,994 
Unevaluated properties
Unevaluated leasehold and seismic costs 1,532,304  1,843,725 
Capitalized interest 200,946  142,399 
Total unevaluated properties 1,733,250  1,986,124 
Total oil and natural gas properties, net $4,088,960  $6,669,118 
Other property and equipment $60,287  $67,202 
Accumulated depreciation (28,647) (31,949)
Other property and equipment, net $31,640  $35,253 
The Company capitalized internal costs of employee compensation and benefits, including stock-based compensation, directly associated with acquisition, exploration and development activities totaling $36.2 million for the years ended December 31, 2020, 2019, and $28.0 million for the year ended December 31, 2018, respectively. The Company capitalized interest costs to unproved properties totaling $88.6 million, $78.5 million and $56.2 million for the years ended December 31, 2020, 2019 and 2018, respectively.
Impairment of Evaluated Oil and Gas Properties
Primarily as a result of the significant reduction in the 12-Month Average Realized Price of crude oil, the Company recognized impairments of evaluated oil and gas properties of $2.5 billion for the year December 31, 2020. The Company did not recognize impairments of evaluated oil and gas properties for the years ended December 31, 2019 and 2018.
Details of the 12-Month Average Realized Price of crude oil for the years ended December 31, 2020, 2019, and 2018 are summarized in the table below:
Years Ended December 31,
2020 2019 2018
Impairment of evaluated oil and natural gas properties (In thousands) $2,547,241 $— $—
Beginning of period 12-Month Average Realized Price ($/Bbl) $53.90 $58.40 $49.48
End of period 12-Month Average Realized Price ($/Bbl) $37.44 $53.90 $58.40
Percent increase (decrease) in 12-Month Average Realized Price (31  %) (8  %) 18  %
The Company currently estimates the range of the first quarter of 2021 cost center ceiling, at the high end, would exceed the net book value of oil and gas properties, resulting in no impairment in the carrying value of evaluated oil and gas properties, and at the low end, would result in an impairment in the carrying value of evaluated oil and gas properties of $100.0 million. This is based on an estimated 12-Month Average Realized price of crude oil of approximately $40.23 per Bbl as of March 31, 2021, which is based on the average realized price for sales of crude oil on the first calendar day of each month for the first 11 months and an estimate for the twelfth month based on a quoted forward price. Declines in the 12-Month Average Realized Price of crude oil in subsequent quarters could result in a lower present value of the estimated future net revenues from proved oil and gas reserves and may result in additional impairments of evaluated oil and gas properties.
As a result of the downturn in the oil and gas industry as well as in the broader macroeconomic environment in 2020, the Company analyzed its unevaluated leasehold giving consideration to its updated exploration program as well as to the remaining lease term of certain unevaluated leaseholds. As a result of this analysis, the Company impaired $229.6 million unevaluated leasehold costs and transferred to evaluated properties during the year ended December 31, 2020.
Unevaluated property costs not subject to amortization as of December 31, 2020 were incurred in the following periods:
2020 2019 2018 2017 and Prior Total
(In thousands)
Unevaluated property costs $113,078  $680,456  $439,478  $500,238  $1,733,250