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Oil and Gas Reserve Information | 12 Months Ended
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Dec. 31, 2016
Extractive Industries [Abstract] |
Oil and Gas Reserves Information | Oil and Gas Reserve Information There are numerous uncertainties inherent in estimating quantities of proved crude oil and natural gas reserves. Crude oil and natural gas reserve engineering is a subjective process of estimating underground accumulations of crude oil and natural gas that cannot be precisely measured. The accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation and judgment. Results of drilling, testing and production subsequent to the date of the estimate may justify revision of such estimate. Accordingly, reserve estimates are often different from the quantities of crude oil and natural gas that are ultimately recovered. Estimates of our crude oil and natural gas reserves and present values as of December 31, 2016, 2015 and 2014, were prepared by Netherland, Sewell & Associates, Inc., independent reserve engineers. A summary of changes in estimated quantities of proved reserves for the years ended December 31, 2016, 2015 and 2014 is as follows:
| Gas |  | Oil |  | NGLS |  | Total
| (MMcf) |  | (Mbbl) |  | (Mbbl) |  | (MMcfe) (1)
Company: |  |  |  |  |  |  |
Balance at January 1, 2014 | 662 |  |  | 236 |  |  | — |  |  | 2,078 |
Revisions of quantity estimate | 65 |  |  | (67 | ) |  | 21 |  |  | (211 | )
Extensions and discoveries | 8 |  |  | 1 |  |  | — |  |  | 14 |
Production | (134 | ) |  | (93 | ) |  | (4 | ) |  | (716 | )
Balance at December 31, 2014 (2) | 601 |  |  | 77 |  |  | 17 |  |  | 1,165 |
Revisions of quantity estimate | (330 | ) |  | (35 | ) |  | (15 | ) |  | (630 | )
Extensions and discoveries | — |  |  | — |  |  | — |  |  | — |
Production | (83 | ) |  | (36 | ) |  | (2 | ) |  | (311 | )
Balance at December 31, 2015 (3) | 188 |  |  | 6 |  |  | — |  |  | 224 |
Revisions of quantity estimate | 196 |  |  | 3 |  |  | 8 |  |  | 262 |
Extensions and discoveries | — |  |  | — |  |  | — |  |  | — |
Production | (54 | ) |  | (2 | ) |  | — |  |  | (66 | )
Balance at December 31, 2016 (4) | 330 |  |  | 7 |  |  | 8 |  |  | 420 |
Company’s share of Laramie Energy: |  |  |  |  |  |  |
Balance at January 1, 2014 | 186,597 |  |  | 584 |  |  | 7,401 |  |  | 234,509 |
Revisions of quantity estimate | 8,876 |  |  | 34 |  |  | (1,689 | ) |  | (1,054 | )
Extensions and discoveries | 21,108 |  |  | 128 |  |  | 489 |  |  | 24,808 |
Production | (4,831 | ) |  | (18 | ) |  | (125 | ) |  | (5,689 | )
Balance at December 31, 2014 (2) | 211,750 |  |  | 728 |  |  | 6,076 |  |  | 252,574 |
Revisions of quantity estimate | (99,548 | ) |  | (316 | ) |  | (2,718 | ) |  | (117,752 | )
Extensions and discoveries | 32,041 |  |  | 131 |  |  | 1,007 |  |  | 38,869 |
Acquisitions and divestures | (5,945 | ) |  | (20 | ) |  | (171 | ) |  | (7,091 | )
Production | (4,745 | ) |  | (20 | ) |  | (149 | ) |  | (5,759 | )
Balance at December 31, 2015 (3) | 133,553 |  |  | 503 |  |  | 4,045 |  |  | 160,841 |
Revisions of quantity estimate | 38,022 |  |  | 87 |  |  | 808 |  |  | 43,392 |
Extensions and discoveries | 638 |  |  | 1 |  |  | 19 |  |  | 758 |
Acquisitions and divestures | 168,887 |  |  | 492 |  |  | 4,701 |  |  | 200,045 |
Production | (15,192 | ) |  | (59 | ) |  | (552 | ) |  | (18,858 | )
Balance at December 31, 2016 (4) | 325,908 |  |  | 1,024 |  |  | 9,021 |  |  | 386,178 |
Total at December 31, 2016 | 326,238 |  |  | 1,031 |  |  | 9,029 |  |  | 386,598 |
__________________________________________________
(1) | MMcfe is based on a ratio of 6 Mcf to 1 barrel.
(2) | During 2014, the Company's estimated proved reserves, inclusive of the Company's share of Laramie Energy's estimated proved reserves, increased by 17,152 MMcfe or approximately 7%. Extensions and discoveries related to our share of Laramie Energy's estimated proved reserves resulted in an increase of 24,808 MMcfe from the beginning of year reserves. These extensions and discoveries are primarily associated with successful completions by Laramie Energy.
(3) | During 2015, the Company's estimated proved reserves, inclusive of the Company's share of Laramie Energy's estimated proved reserves, decreased by 92,674 MMcfe or approximately 36.5%. Revisions of quantity estimate related to our share of Laramie Energy's estimated proved reserves resulted in a decrease of 117,752 MMcfe from the beginning of year reserves. These revisions of quantity estimate are primarily associated with wells becoming uneconomic during 2015.
(4) | During 2016, the Company's estimated proved reserves, inclusive of the Company's share of Laramie Energy's estimated proved reserves, increased by 225,533 MMcfe or approximately 140.0%. Acquisitions and divestitures related to our share of Laramie Energy's estimated proved reserves resulted in an increase of 200,045 MMcfe from the beginning of year reserves. This increase was primarily due to Laramie Energy's acquisition of properties in the Piceance Basin for $157.5 million in March 2016. Please read Note 3—Investment in Laramie Energy, LLC for more information. The increase of 43,392 MMcfe in Revisions of quantity estimate related to our share of Laramie Energy's estimated proved reserves is primarily due to wells that have become economic as a result of increased operator efficiency and cost reductions.
| Gas |  | Oil |  | NGLS |  | Total
| (MMcf) |  | (Mbbl) |  | (Mbbl) |  | (MMcfe) (1)
December 31, 2014 |  |  |  |  |  |  |
Proved developed reserves |  |  |  |  |  |  |
Company | 601 |  |  | 77 |  |  | 17 |  |  | 1,165 |
Company's share of Laramie Energy | 48,855 |  |  | 195 |  |  | 1,226 |  |  | 57,381 |
Total | 49,456 |  |  | 272 |  |  | 1,243 |  |  | 58,546 |
Proved undeveloped reserves |  |  |  |  |  |  |
Company | — |  |  | — |  |  | — |  |  | — |
Company's share of Laramie Energy | 162,895 |  |  | 533 |  |  | 4,850 |  |  | 195,193 |
Total | 162,895 |  |  | 533 |  |  | 4,850 |  |  | 195,193 |
December 31, 2015 |  |  |  |  |  |  |
Proved developed reserves |  |  |  |  |  |  |
Company | 188 |  |  | 6 |  |  | — |  |  | 224 |
Company's share of Laramie Energy | 65,499 |  |  | 248 |  |  | 1,931 |  |  | 78,573 |
Total | 65,687 |  |  | 254 |  |  | 1,931 |  |  | 78,797 |
Proved undeveloped reserves |  |  |  |  |  |  |
Company | — |  |  | — |  |  | — |  |  | — |
Company's share of Laramie Energy | 68,054 |  |  | 255 |  |  | 2,114 |  |  | 82,268 |
Total | 68,054 |  |  | 255 |  |  | 2,114 |  |  | 82,268 |
December 31, 2016 |  |  |  |  |  |  |
Proved developed reserves |  |  |  |  |  |  |
Company | 330 |  |  | 7 |  |  | 8 |  |  | 420 |
Company's share of Laramie Energy | 159,500 |  |  | 516 |  |  | 4,349 |  |  | 188,690 |
Total | 159,830 |  |  | 523 |  |  | 4,357 |  |  | 189,110 |
Proved undeveloped reserves |  |  |  |  |  |  |
Company | — |  |  | — |  |  | — |  |  | — |
Company's share of Laramie Energy | 166,408 |  |  | 508 |  |  | 4,672 |  |  | 197,488 |
Total | 166,408 |  |  | 508 |  |  | 4,672 |  |  | 197,488 |
__________________________________________________
(1) | MMcfe is based on a ratio of 6 Mcf to 1 barrel.
| Price per MMbtu (2) |  | WTI per Bbl
Base pricing, before adjustments for contractual differentials (Company and Laramie Energy): (1) |  |  |
December 31, 2014 | $ | 4.36 |  |  | $ | 94.99 |
December 31, 2015 | 2.39 |  |  | 50.28 |
December 31, 2016 | 2.29 |  |  | 42.75 |
______________________________________________
(1) | Proved reserves are required to be calculated based on the 12-month, first day of the month historical average price in accordance with SEC rules. The prices shown above are base index prices to which adjustments are made for contractual deducts and other factors.
(2) | The CIG index was used for pricing during 2014 and 2015. In 2016, pricing is based on the Northwest spot price index.
Future net cash flows presented below are computed using applicable prices (as summarized above) and costs and are net of all overriding royalty revenue interests.
| December 31,
| 2016 |  | 2015 |  | 2014
| (in thousands)
Company: |  |  |  |  |
Future net cash flows | $ | 1,154 |  |  | $ | 690 |  |  | $ | 10,452 |
Future costs |  |  |  |  |
Production | 713 |  |  | 345 |  |  | 7,760 |
Development and abandonment | 2 |  |  | 25 |  |  | 37 |
Income taxes (1) | — |  |  | — |  |  | — |
Future net cash flows | 439 |  |  | 320 |  |  | 2,655 |
10% discount factor | (154 | ) |  | (128 | ) |  | (889 | )
Discounted future net cash flows | $ | 285 |  |  | $ | 192 |  |  | $ | 1,766 |
Company’s share of Laramie Energy: |  |  |  |  |
Future net cash flows | $ | 955,090 |  |  | $ | 425,596 |  |  | $ | 1,268,704 |
Future costs |  |  |  |  |
Production | 488,977 |  |  | 249,831 |  |  | 539,796 |
Development and abandonment | 148,708 |  |  | 72,462 |  |  | 236,027 |
Income taxes (1) | — |  |  | — |  |  | — |
Future net cash flows | 317,405 |  |  | 103,303 |  |  | 492,881 |
10% discount factor | (174,512 | ) |  | (63,302 | ) |  | (322,282 | )
Discounted future net cash flows | $ | 142,893 |  |  | $ | 40,001 |  |  | $ | 170,599 |
Total discounted future net cash flows | $ | 143,178 |  |  | $ | 40,193 |  |  | $ | 172,365 |
_______________________________________________
(1) | No income tax provision is included in the standardized measure of discounted future net cash flows calculation shown above as we do not project to be taxable or pay cash income taxes based on its available tax assets and additional tax assets generated in the development of its reserves because the tax basis of its oil and gas properties and NOL carryforwards exceeds the amount of discounted future net earnings.
The principal sources of changes in the standardized measure of discounted net cash flows for the years ended December 31, 2016, 2015 and 2014 are as follows (in thousands):
| Company |  | Company's Share of Laramie Energy |  | Total
Balance at January 1, 2014 | $ | 3,537 |  |  | $ | 89,325 |  |  | $ | 92,862 |
Sales of oil and gas production during the period, net of production costs | (1,288 | ) |  | (3,763 | ) |  | (5,051 | )
Net change in prices and production costs | (31 | ) |  | 35,837 |  |  | 35,806 |
Changes in estimated future development costs | 118 |  |  | (6,292 | ) |  | (6,174 | )
Extensions, discoveries and improved recovery | 85 |  |  | 4,914 |  |  | 4,999 |
Revisions of previous quantity estimates, estimated timing of development and other | (1,111 | ) |  | 27,632 |  |  | 26,521 |
Previously estimated development and abandonment costs incurred during the period | 102 |  |  | 14,013 |  |  | 14,115 |
Accretion of discount | 354 |  |  | 8,933 |  |  | 9,287 |
Balance at December 31, 2014 | 1,766 |  |  | 170,599 |  |  | 172,365 |
Sales of oil and gas production during the period, net of production costs | (479 | ) |  | (5,753 | ) |  | (6,232 | )
Acquisitions and divestitures | — |  |  | (4,789 | ) |  | (4,789 | )
Net change in prices and production costs | (679 | ) |  | (153,564 | ) |  | (154,243 | )
Changes in estimated future development costs | 8 |  |  | 788 |  |  | 796 |
Extensions, discoveries and improved recovery | — |  |  | 9,273 |  |  | 9,273 |
Revisions of previous quantity estimates, estimated timing of development and other | (601 | ) |  | (8,621 | ) |  | (9,222 | )
Previously estimated development and abandonment costs incurred during the period | — |  |  | 15,008 |  |  | 15,008 |
Accretion of discount | 177 |  |  | 17,060 |  |  | 17,237 |
Balance at December 31, 2015 | 192 |  |  | 40,001 |  |  | 40,193 |
Sales of oil and gas production during the period, net of production costs | (62 | ) |  | (7,979 | ) |  | (8,041 | )
Acquisitions and divestitures | — |  |  | 81,066 |  |  | 81,066 |
Net change in prices and production costs | (20 | ) |  | 2,994 |  |  | 2,974 |
Changes in estimated future development costs | 14 |  |  | (8,575 | ) |  | (8,561 | )
Extensions, discoveries and improved recovery | — |  |  | 231 |  |  | 231 |
Revisions of previous quantity estimates, estimated timing of development and other | 142 |  |  | 18,350 |  |  | 18,492 |
Previously estimated development and abandonment costs incurred during the period | — |  |  | 12,805 |  |  | 12,805 |
Other | — |  |  | — |  |  | — |
Accretion of discount | 19 |  |  | 4,000 |  |  | 4,019 |
Balance at December 31, 2016 | $ | 285 |  |  | $ | 142,893 |  |  | $ | 143,178 |

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- Definition The entire disclosure for properties used in normal conduct of oil and gas exploration and producing operations. This disclosure may include property accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives. + References No definition available. + Details
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