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Supplemental Oil and Gas Reserve Information - Unaudited | 12 Months Ended
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Dec. 31, 2020
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 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 crude oil and natural gas reserve estimation and disclosures. All of the Company’s oil and gas reserves are attributable to properties within the United States.Proved oil and gas reserves are the estimated quantities of crude 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 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. 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 gas properties. Accordingly, these estimates are expected to change as future information becomes available. Estimated Quantities of Proved Crude Oil and Natural Gas Reserves The following table summarizes changes in quantities of the Company’s estimated net proved reserves for the periods presented:
| Crude Oil (MBbl) |  | Natural Gas (MMcf) |  | MBoe(1)
2018 |  |  |  |  |
Proved reserves |  |  |  |  |
Beginning balance (Predecessor) | 224,960 |  |  | 523,456 |  |  | 312,204 |
Revisions of previous estimates | (17,352) |  |  | 3,019 |  |  | (16,850) |
Extensions, discoveries and other additions | 30,640 |  |  | 46,309 |  |  | 38,358 |
Sales of reserves in place | (12,470) |  |  | (20,735) |  |  | (15,926) |
Purchases of reserves in place | 25,688 |  |  | 43,107 |  |  | 32,873 |
Production | (23,050) |  |  | (42,430) |  |  | (30,122) |
Net proved reserves at December 31, 2018 (Predecessor) | 228,416 |  |  | 552,726 |  |  | 320,537 |
Proved developed reserves, December 31, 2018 (Predecessor) | 144,533 |  |  | 339,444 |  |  | 201,107 |
Proved undeveloped reserves, December 31, 2018 (Predecessor) | 83,883 |  |  | 213,282 |  |  | 119,430 |
2019 |  |  |  |  |
Proved reserves |  |  |  |  |
Beginning balance (Predecessor) | 228,416 |  |  | 552,726 |  |  | 320,537 |
Revisions of previous estimates | (51,965) |  |  | (68,301) |  |  | (63,349) |
Extensions, discoveries and other additions | 49,297 |  |  | 87,382 |  |  | 63,861 |
Sales of reserves in place | (2,136) |  |  | (2,368) |  |  | (2,531) |
Production | (22,825) |  |  | (55,906) |  |  | (32,142) |
Net proved reserves at December 31, 2019 (Predecessor) | 200,787 |  |  | 513,533 |  |  | 286,376 |
Proved developed reserves, December 31, 2019 (Predecessor) | 113,418 |  |  | 314,000 |  |  | 165,751 |
Proved undeveloped reserves, December 31, 2019 (Predecessor) | 87,369 |  |  | 199,533 |  |  | 120,625 |
2020 |  |  |  |  |
Proved reserves |  |  |  |  |
Beginning balance (Predecessor) | 200,787 |  |  | 513,533 |  |  | 286,376 |
Revisions of previous estimates | (69,782) |  |  | (98,815) |  |  | (86,251) |
Extensions, discoveries and other additions | 4,578 |  |  | 8,659 |  |  | 6,021 |
Production | (15,818) |  |  | (47,207) |  |  | (23,686) |
Net proved reserves at December 31, 2020 (Successor) | 119,765 |  |  | 376,170 |  |  | 182,460 |
Proved developed reserves, December 31, 2020 (Successor) | 85,428 |  |  | 262,676 |  |  | 129,207 |
Proved undeveloped reserves, December 31, 2020 (Successor) | 34,337 |  |  | 113,494 |  |  | 53,253 |
__________________ (1)Natural gas is converted to barrel of oil equivalents at the rate of six thousand cubic feet of natural gas to one barrel of oil. Revisions of Previous Estimates In 2020, the Company had net negative revisions of 86.3 MMBoe, or 30% of the beginning of the year estimated net proved reserves balance. These net negative revisions were attributable to negative revisions of 60.1 MMBoe associated with alignment to the five-year development plan and 31.9 MMBoe due to lower realized prices, offset by positive revisions of 5.6 MMBoe for the addition of proved undeveloped reserves (“PUDs”) that were previously removed from the five-year development plan. Proved developed revisions were primarily due to negative revisions of 29.3 MMBoe due to lower realized prices, partially offset by positive revisions of 1.5 MMBoe due to lower operating expenses. The PUD revisions were primarily due to negative revisions of 54.5 MMBoe associated with alignment to the five-year development plan and 2.6 MMBoe due to lower realized price. In 2019, the Company had net negative revisions of 63.3 MMBoe, or 20% of the beginning of the year estimated net proved reserves balance. These net negative revisions were attributable to negative revisions of 51.2 MMBoe due to well performance, 11.2 MMBoe due to lower realized prices and 7.6 MMBoe associated with alignment to the five-year development plan, offset by positive revisions of 6.7 MMBoe due to lower operating expenses. Proved developed revisions were primarily due to negative revisions of 30.2 MMBoe for performance largely related to higher than anticipated decline rates in recently developed spacing units and 9.6 MMBoe due to lower realized prices, partially offset by positive revisions of 5.1 MMBoe due to lower operating expenses. The PUD revisions were primarily due to negative revisions of 21.1 MMBoe for performance largely related to reductions in the anticipated hydrocarbon recoveries of proved areas during full field development due to changes in anticipated well densities and well performance and 7.0 MMBoe associated with alignment to the anticipated five-year development plan, offset by positive revisions of 1.7 MMBoe due to lower operating expenses. In 2018, the Company had net negative revisions of 16.9 MMBoe, or 5% of the beginning of the year estimated net proved reserves balance. These net negative revisions were attributable to negative revisions of 42.3 MMBoe due to well performance and 9.4 MMBoe associated with alignment to the five-year development plan, offset by positive revisions of 14.7 MMBoe for the addition of PUDs that were previously removed from the five-year development plan, 14.4 MMBoe due to higher realized prices and 5.4 MMBoe for ownership adjustments. The proved developed net negative revisions of 20.2 MMBoe were primarily due to negative revisions of 33.0 MMBoe for performance revisions largely related to higher than anticipated decline rates in recently developed spacing units, partially offset by positive revisions of 12.2 MMBoe due to higher realized prices. The PUD revisions were primarily due to positive revisions of 14.7 MMBoe for the addition of PUDs that were previously removed from the five-year development plan, 5.6 MMBoe for ownership adjustments and 2.2 MMBoe due to higher realized prices, offset by negative revisions of 9.4 MMBoe associated with alignment to the anticipated five-year development plan and 9.3 MMBoe for performance largely related to the associated impact of higher than anticipated decline rates in recently developed spacing units. Extensions, Discoveries and Other Additions In 2020, the Company had a total of 6.0 MMBoe of additions due to extensions and discoveries. An estimated 3.2 MMBoe of these extensions and discoveries were associated with new producing wells at December 31, 2020, with 99% of these reserves from wells producing in the Permian Basin and 1% of these reserves from wells producing in the Williston Basin. An additional 2.8 MMBoe of PUDs were added in the Williston Basin associated with the Company’s anticipated five-year development plan. In 2019, the Company had a total of 63.9 MMBoe of additions due to extensions and discoveries. An estimated 10.3 MMBoe of these extensions and discoveries were associated with new producing wells at December 31, 2019, with 60% of these reserves from wells producing in the Bakken or Three Forks formations and 40% of reserves from wells producing in the Permian Basin. An additional 53.6 MMBoe of PUDs were added in the Williston and Permian Basins associated with the Company’s anticipated five-year development plan, with 63% of these PUDs in the Bakken or Three Forks formations and 37% in the Permian Basin. In 2018, the Company had a total of 38.4 MMBoe of additions due to extensions and discoveries. An estimated 9.0 MMBoe of these extensions and discoveries were associated with new producing wells at December 31, 2018, with 77% of these reserves from wells producing in the Bakken or Three Forks formations and 23% of reserves from wells producing in the Permian Basin. An additional 29.4 MMBoe of PUDs were added in the Williston and Permian Basins associated with the Company’s anticipated five-year drilling plan, with 76% of these PUDs in the Bakken or Three Forks formations and 24% in the Permian Basin. Sales of Reserves in Place In 2020, there were no proved reserves divested. In 2019 and 2018, the Company divested 2.5 MMBoe and 15.9 MMBoe, respectively, of reserves associated with reservoirs in the Bakken or Three Forks formations (see Note 12—Acquisitions and Divestitures). Purchases of Reserves in Place In 2020 and 2019, there were no proved reserves purchased from acquisitions. In 2018, the Company purchased estimated net proved reserves of 32.9 MMBoe from acquisitions in the Permian Basin (see Note 12—Acquisitions and Divestitures). Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Natural Gas Reserves 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 crude 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 12 months were $39.54 per Bbl for crude oil and $2.03 per MMBtu for natural gas, $55.85 per Bbl for crude oil and $2.62 per MMBtu for natural gas and $65.66 per Bbl for crude oil and $3.16 per MMBtu for natural gas for the years ended December 31, 2020, 2019 and 2018, respectively. 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, 2020, 2019 and 2018:
| At December 31,
| 2020 |  | 2019 |  | 2018
| (In thousands)
Future cash inflows | $ | 5,197,220 |  |  | $ | 12,385,040 |  |  | $ | 16,652,405 |
Future production costs | (2,792,921) |  |  | (5,509,127) |  |  | (6,609,097) |
Future development costs | (610,658) |  |  | (1,490,521) |  |  | (1,701,672) |
Future income tax expense | (232,849) |  |  | (188,823) |  |  | (968,466) |
Future net cash flows | 1,560,792 |  |  | 5,196,569 |  |  | 7,373,170 |
10% annual discount for estimated timing of cash flows | (611,915) |  |  | (2,352,200) |  |  | (3,322,864) |
Standardized measure of discounted future net cash flows | $ | 948,877 |  |  | $ | 2,844,369 |  |  | $ | 4,050,306 |
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:
| 2020 |  | 2019 |  | 2018
| (In thousands)
January 1 | $ | 2,844,369 |  |  | $ | 4,050,306 |  |  | $ | 3,300,695 |
Net changes in prices and production costs | (1,088,936) |  |  | (1,070,192) |  |  | 1,003,008 |
Net changes in future development costs | 4,640 |  |  | 131,003 |  |  | (89,304) |
Sales of crude oil and natural gas, net | (407,417) |  |  | (943,989) |  |  | (1,155,223) |
Extensions | 47,693 |  |  | 437,700 |  |  | 461,196 |
Purchases of reserves in place | — |  |  | — |  |  | 385,763 |
Sales of reserves in place | — |  |  | (36,907) |  |  | (197,867) |
Revisions of previous quantity estimates | (694,320) |  |  | (732,253) |  |  | (115,015) |
Previously estimated development costs incurred | 87,640 |  |  | 246,311 |  |  | 303,364 |
Accretion of discount | 293,445 |  |  | 467,426 |  |  | 368,374 |
Net change in income taxes | (76,066) |  |  | 533,872 |  |  | (240,908) |
Changes in timing and other | (62,171) |  |  | (238,908) |  |  | 26,223 |
December 31 | $ | 948,877 |  |  | $ | 2,844,369 |  |  | $ | 4,050,306 |

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