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Supplemental Oil and Gas Reserve Information - Unaudited | 12 Months Ended
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Dec. 31, 2017
Oil and Gas Exploration and Production Industries Disclosures [Abstract] |
Supplemental Oil and Gas Reserve Information - Unaudited | Supplemental Oil and Gas Reserve Information — Unaudited The reserve estimates at December 31, 2017, 2016 and 2015 presented in the table below are based on reports prepared by DeGolyer and MacNaughton, the Company’s independent reserve engineers, in accordance with the FASB’s authoritative guidance on oil and gas reserve estimation and disclosures. At December 31, 2017, 2016 and 2015, all of the Company’s oil and natural gas producing activities were conducted within the continental United States. The Company emphasizes that reserve estimates are inherently imprecise and that estimates of new discoveries and undeveloped locations are more imprecise than estimates of established proved producing oil and natural gas properties. Accordingly, these estimates are expected to change as future information becomes available. Proved oil and natural gas reserves are the estimated quantities of oil and natural gas that geological and engineering data demonstrate, with reasonable certainty, to be recoverable in future years from known reservoirs under economic and operating conditions (i.e., prices and costs) existing at the time the estimate is made. Proved developed oil and natural gas reserves are proved reserves that can be expected to be recovered through existing wells and equipment in place and under operating methods being utilized at the time the estimates were made. Estimated Quantities of Proved Oil and Natural Gas Reserves — Unaudited The following table sets forth the Company’s estimated net proved, proved developed and proved undeveloped reserves at December 31, 2017, 2016 and 2015:
| Oil (MBbl) |  | Gas (MMcf) |  | MBoe
2015 |  |  |  |  |
Proved reserves |  |  |  |  |
Beginning balance | 235,399 |  |  | 220,120 |  |  | 272,086 |
Revisions of previous estimates | (75,458 | ) |  | (55,065 | ) |  | (84,635 | )
Extensions, discoveries and other additions | 38,962 |  |  | 46,072 |  |  | 46,640 |
Sales of reserves in place | — |  |  | — |  |  | — |
Purchases of reserves in place | 2,115 |  |  | 2,702 |  |  | 2,565 |
Production | (16,090 | ) |  | (14,001 | ) |  | (18,423 | )
Net proved reserves at December 31, 2015 | 184,928 |  |  | 199,828 |  |  | 218,233 |
Proved developed reserves, December 31, 2015 | 127,445 |  |  | 120,789 |  |  | 147,577 |
Proved undeveloped reserves, December 31, 2015 | 57,483 |  |  | 79,039 |  |  | 70,656 |
2016 |  |  |  |  |
Proved reserves |  |  |  |  |
Beginning balance | 184,928 |  |  | 199,828 |  |  | 218,233 |
Revisions of previous estimates | 11,713 |  |  | 116,539 |  |  | 31,136 |
Extensions, discoveries and other additions | 10,790 |  |  | 24,520 |  |  | 14,876 |
Sales of reserves in place | (5,828 | ) |  | (10,839 | ) |  | (7,635 | )
Purchases of reserves in place | 50,164 |  |  | 100,629 |  |  | 66,936 |
Production | (15,174 | ) |  | (19,573 | ) |  | (18,436 | )
Net proved reserves at December 31, 2016 | 236,593 |  |  | 411,104 |  |  | 305,110 |
Proved developed reserves, December 31, 2016 | 152,337 |  |  | 229,568 |  |  | 190,598 |
Proved undeveloped reserves, December 31, 2016 | 84,256 |  |  | 181,536 |  |  | 114,512 |
2017 |  |  |  |  |
Proved reserves |  |  |  |  |
Beginning balance | 236,593 |  |  | 411,104 |  |  | 305,110 |
Revisions of previous estimates | (28,323 | ) |  | 54,726 |  |  | (19,200 | )
Extensions, discoveries and other additions | 36,238 |  |  | 89,489 |  |  | 51,153 |
Sales of reserves in place | (1,196 | ) |  | (1,147 | ) |  | (1,387 | )
Purchases of reserves in place | 466 |  |  | 1,230 |  |  | 671 |
Production | (18,818 | ) |  | (31,946 | ) |  | (24,143 | )
Net proved reserves at December 31, 2017 | 224,960 |  |  | 523,456 |  |  | 312,204 |
Proved developed reserves, December 31, 2017 | 150,628 |  |  | 301,101 |  |  | 200,812 |
Proved undeveloped reserves, December 31, 2017 | 74,332 |  |  | 222,355 |  |  | 111,392 |
Revisions of Previous Estimates In 2017, the Company had a net negative revision of 19.2 MMBoe, or 6% of the beginning of the year estimated net proved reserves balance. This net negative revision was attributable to negative revisions of 39.1 MMBoe associated with well performance and 2.1 MMBoe for alignment to the anticipated five-year develop ment plan, offset by positive revisions of 16.1 MMBoe due to higher realized prices and 2.5 MMBoe for ownership adjustments. The proved developed negative revision of 14.2 MMBoe was primarily due to a negative revision of 29.7 MMBoe for performance revisions largely related to higher than anticipated decline r ates in recently developed spacing units, offset by a positive revision of 14.1 MMBoe from increased realized prices. The proved undeveloped negative revision of 5.0 MMboe was primarily due to a negative revision of 9.4 MMBoe for performance revisions largely related to the associated impact of higher than anticipated decline rates in recently developed spacing units and a negative 1.8 MMBoe revision associated with alignment to the five-year development plan, offset by a positive revision of 2.6 MMBoe for ownership adjustments and 2.0 MMBoe from increased realized prices. In 2016, the Company had a net positive revision of 31.1 MMBoe, or 14% of the beginning of the year estimated net proved reserves balance. This net positive revision was attributable to positive revisions of 30.4 MMBoe due to well performance and larger completion designs, 8.2 MMBoe due to a higher gas to oil ratio and 8.2 MMBoe due to ownership adjustments, offset by 9.5 MMBoe due to the removal of proved undeveloped reserves that were no longer aligned with the Company’s anticipated five-year drilling plan and 8.2 MMBoe due to lower commodity prices. In 2015, the Company had a net negative revision of 84.6 MMBoe, or 31% of the beginning of the year estimated net proved reserves balance. This net negative revision was primarily attributable to the removal of proved undeveloped reserves that were not economic at the lower oil price or were no longer aligned with the Company’s anticipated five-year drilling plan. This resulted in 259 gross (190.8 net) proved undeveloped locations with 71.5 MMBoe of reserves being removed from the December 31, 2015 estimated net proved reserves balance, most significantly, removing proved undeveloped reserves outside of the Company’s core acreage within the Williston Basin that were uneconomic as of December 31, 2015 due to the lower oil price. The remaining net negative revision was primarily attributable to negative revisions of 17.2 MMBoe due to the impact of price on producing life, partially offset by positive revisions of 3.0 MMBoe due to ownership adjustments and 1.9 MMBoe due to performance. Extensions, Discoveries and Other Additions In 2017, the Company had a total of 51.2 MMBoe of additions due to extensions and discoveries. An estimated 17.9 MMBoe of these extensions and discoveries were associated with new producing wells at December 31, 2017, with 100% of these reserves from wells producing in the Bakken or Three Forks formations. An additional 33.3 MMBoe of proved undeveloped reserves were added in the Williston Basin associated with the Company’s anticipated five-year development plan, with 100% of these proved undeveloped reserves in the Bakken or Three Forks formations. In 2016, the Company had a total of 14.9 MMBoe of additions due to extensions and discoveries. An estimated 6.2 MMBoe of these extensions and discoveries were associated with new producing wells at December 31, 2016, with 100% of these reserves from wells producing in the Bakken or Three Forks formations. An additional 6.5 MMBoe of proved undeveloped reserves were added in the Williston Basin associated with the Company’s 2016 operated and non-operated drilling program and anticipated five-year drilling plan, with 100% of these proved undeveloped reserves in the Bakken or Three Forks formations. In 2015, the Company had a total of 46.6 MMBoe of additions due to extensions and discoveries. An estimated 20.4 MMBoe of these extensions and discoveries were associated with new producing wells at December 31, 2015, with 100% of these reserves from wells producing in the Bakken or Three Forks formations. An additional 26.3 MMBoe of proved undeveloped reserves were added in the Williston Basin associated with the Company’s 2015 operated and non-operated drilling program and anticipated five-year drilling plan, with 100% of these proved undeveloped reserves in the Bakken or Three Forks formations. Sales of Reserves in Place In 2017, the Company divested 1.4 MMBoe of reserves associated with reservoirs other than the Bakken or Three Forks formations. In 2016, the Company divested 7.6 MMBoe of reserves associated with its traded acreage and sold wells (see Note 9 – Acquisitions and Divestitures). In 2015, the Company did not have any sales of reserves. Purchases of Reserves in Place In 2017, the Company purchased estimated net proved reserves of 0.7 MMBoe from acquisitions of additional working interests in its existing properties in the Williston Basin. In 2016, the Company purchased 66.9 MMBoe of estimated net proved reserves from acquisitions (see Note 9 – Acquisitions and Divestitures). In 2015, the Company purchased estimated net proved reserves of 2.6 MMBoe from acquisitions of additional working interests in its existing properties in the Williston Basin. Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Natural Gas Reserves — Unaudited The Standardized Measure represents the present value of estimated future net cash flows from estimated net proved oil and natural gas reserves, less future development, production, plugging and abandonment costs and income tax expenses, discounted at 10% per annum to reflect timing of future cash flows. Production costs do not include DD&A of capitalized acquisition, exploration and development costs. The Company’s estimated net proved reserves and related future net revenues and Standardized Measure were determined using index prices for oil and natural gas, without giving effect to derivative transactions, and were held constant throughout the life of the properties. The unweighted arithmetic average first-day-of-the-month prices for the prior twelve months were $51.34/Bbl for oil and $2.99/MMBtu for natural gas, $42.60/Bbl for oil and $2.47/MMBtu for natural gas and $50.16/Bbl for oil and $2.63/MMBtu for natural gas for the years ended December 31, 2017, 2016 and 2015, respectivel y. These prices were adjusted by lease for quality, transportation fees, geographical differentials, marketing bonuses or deductions and other factors affecting the price received at the wellhead. Future operating costs, production taxes and capital costs were based on current costs as of each year-end. The following table sets forth the Standardized Measure of discounted future net cash flows from projected production of the Company’s estimated net proved reserves at December 31, 2017, 2016 and 2015:
| At December 31,
| 2017 |  | 2016 |  | 2015
| (In thousands)
Future cash inflows | $ | 11,636,126 |  |  | $ | 9,426,963 |  |  | $ | 8,582,831 |
Future production costs | (4,458,418 | ) |  | (3,996,657 | ) |  | (3,842,517 | )
Future development costs | (992,271 | ) |  | (784,727 | ) |  | (909,562 | )
Future income tax expense | (580,481 | ) |  | (279,345 | ) |  | (225,662 | )
Future net cash flows | 5,604,956 |  |  | 4,366,234 |  |  | 3,605,090 |
10% annual discount for estimated timing of cash flows | (2,304,261 | ) |  | (1,883,169 | ) |  | (1,690,760 | )
Standardized measure of discounted future net cash flows | $ | 3,300,695 |  |  | $ | 2,483,065 |  |  | $ | 1,914,330 |
The following table sets forth the changes in the Standardized Measure of discounted future net cash flows applicable to estimated net proved reserves for the periods presented:
| 2017 |  | 2016 |  | 2015
| (In thousands)
January 1 | $ | 2,483,065 |  |  | $ | 1,914,330 |  |  | $ | 3,981,661 |
Net changes in prices and production costs | 881,993 |  |  | (367,527 | ) |  | (3,201,195 | )
Net changes in future development costs | (60,929 | ) |  | 69,992 |  |  | 150,333 |
Sales of oil and natural gas, net | (769,625 | ) |  | (403,739 | ) |  | (477,755 | )
Extensions | 661,467 |  |  | 165,926 |  |  | 409,838 |
Discoveries | — |  |  | — |  |  | — |
Purchases of reserves in place | 6,518 |  |  | 533,505 |  |  | 14,378 |
Sales of reserves in place | (9,024 | ) |  | (57,770 | ) |  | — |
Revisions of previous quantity estimates | (78,942 | ) |  | 333,398 |  |  | (946,729 | )
Previously estimated development costs incurred | 157,386 |  |  | 91,518 |  |  | 216,981 |
Accretion of discount | 262,776 |  |  | 202,272 |  |  | 548,141 |
Net change in income taxes | (238,354 | ) |  | (36,303 | ) |  | 1,391,358 |
Changes in timing and other | 4,364 |  |  | 37,463 |  |  | (172,681 | )
December 31 | $ | 3,300,695 |  |  | $ | 2,483,065 |  |  | $ | 1,914,330 |

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- Definition The entire disclosure for oil and gas producing industries. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 932 -URI http://asc.fasb.org/topic&trid=2145477 + Details
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