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PROPERTY AND EQUIPMENT | 9 Months Ended
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Sep. 30, 2024
Property, Plant and Equipment [Abstract] |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT The major categories of property and equipment and related accumulated DD&A are as follows (in thousands):
| September 30, 2024 |  | December 31, 2023
Proved oil and natural gas properties | $ | 3,276,165 |  |  | $ | 2,904,519 |
Unproved properties | 224,370 |  |  | 204,233 |
Other depreciable property and equipment | 10,928 |  |  | 8,779 |
Land | 386 |  |  | 386 |
Total property and equipment | 3,511,849 |  |  | 3,117,917 |
Accumulated DD&A and impairment | (1,137,464) |  |  | (865,618) |
Property and equipment, net | $ | 2,374,385 |  |  | $ | 2,252,299 |
Under the full cost method of accounting, the Company is required to perform a ceiling test each quarter. The test determines a limit, or ceiling, on the book value of the Company's oil and natural gas properties. At September 30, 2024, the net book value of the Company's oil and gas properties exceeded the calculated ceiling. As a result, the Company recorded a non-cash ceiling test impairment of its oil and natural gas properties of $30.5 million for the three months ended September 30, 2024. The impairment resulted from declines in the full cost ceiling, which primarily resulted from the significant decrease in the 12-month average trailing price for natural gas. The Company did not record an impairment in the first or second quarters of 2024 or during 2023. Lower natural gas, oil and NGL prices can reduce the value of the Company’s assets. In addition to commodity prices, the Company’s production rates, levels of proved reserves, future development costs, transfers of unevaluated properties and other factors will determine its actual ceiling test calculation and impairment analysis in future periods. Given the decline of commodity prices through September 2024 and the current pricing outlook for the remainder of 2024, the Company may have additional ceiling test impairments of its oil and natural gas properties in subsequent quarters. Any such ceiling test impairment could be material to our net earnings; however, given the inter-relationship of the various judgements made to estimate proved reserves, it is impractical to estimate the potential changes in these estimates and their impact on the impairment. Certain general and administrative costs are capitalized to the full cost pool and represent management’s estimate of costs incurred directly related to exploration and development activities. All general and administrative costs not capitalized are charged to expense as they are incurred. Capitalized general and administrative costs were approximately $6.5 million and $18.5 million, for the three and nine months ended September 30, 2024, respectively, and $5.7 million and $16.2 million for the three and nine months ended September 30, 2023, respectively. The Company evaluates the costs excluded from its amortization calculation at least annually. Individually insignificant unevaluated properties are grouped for evaluation and periodically transferred to evaluated properties over a timeframe consistent with their expected development schedule. The following table summarizes the Company’s non-producing properties excluded from amortization by area (in thousands):
| September 30, 2024 |  | December 31, 2023
Utica & Marcellus | $ | 199,743 |  |  | $ | 177,888 |
SCOOP | 24,627 |  |  | 26,345 |
Total unproved properties | $ | 224,370 |  |  | $ | 204,233 |
Asset Retirement Obligation The following table provides a reconciliation of the Company’s asset retirement obligation for the nine months ended September 30, 2024 and 2023 (in thousands):
| Nine Months Ended September 30, 2024 |  | Nine Months Ended September 30, 2023
Asset retirement obligation, beginning of period | $ | 29,941 |  |  | $ | 33,171 |
Liabilities incurred | 681 |  |  | 505 |
Liabilities settled | — |  |  | (604) |
Liabilities removed due to divestitures | — |  |  | (919) |
Accretion expense | 1,705 |  |  | 2,117 |
Total asset retirement obligation, end of period | $ | 32,327 |  |  | $ | 34,270 |

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