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Oil and Gas Reserve Information | 12 Months Ended
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Dec. 31, 2018
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, 2018, 2017, and 2016, 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, 2018, 2017, and 2016 is as follows:
| Gas |  | Oil |  | NGLS |  | Total
| (MMcf) |  | (Mbbl) |  | (Mbbl) |  | (MMcfe) (1)
Company |  |  |  |  |  |  |
Balance at January 1, 2016 | 188 |  |  | 6 |  |  | — |  |  | 224 |
Revisions of quantity estimate | 196 |  |  | 3 |  |  | 8 |  |  | 262 |
Extensions and discoveries | — |  |  | — |  |  | — |  |  | — |
Production | (54 | ) |  | (2 | ) |  | — |  |  | (66 | )
Balance at December 31, 2016 | 330 |  |  | 7 |  |  | 8 |  |  | 420 |
Revisions of quantity estimate | 109 |  |  | 2 |  |  | 3 |  |  | 139 |
Extensions and discoveries | — |  |  | — |  |  | — |  |  | — |
Production | (47 | ) |  | (2 | ) |  | — |  |  | (59 | )
Balance at December 31, 2017 (2) | 392 |  |  | 7 |  |  | 11 |  |  | 500 |
Revisions of quantity estimate | (269 | ) |  | (2 | ) |  | (10 | ) |  | (341 | )
Extensions and discoveries | — |  |  | — |  |  | — |  |  | — |
Production | (34 | ) |  | (1 | ) |  | — |  |  | (40 | )
Balance at December 31, 2018 (3) | 89 |  |  | 4 |  |  | 1 |  |  | 119 |
Company’s share of Laramie Energy |  |  |  |  |  |  |
Balance at January 1, 2016, as revised | 127,274 |  |  | 480 |  |  | 3,850 |  |  | 153,254 |
Revisions of quantity estimate | 28,195 |  |  | 53 |  |  | 526 |  |  | 31,672 |
Extensions and discoveries | 638 |  |  | 1 |  |  | 19 |  |  | 758 |
Acquisitions and divestitures | 168,887 |  |  | 492 |  |  | 4,701 |  |  | 200,045 |
Production | (15,192 | ) |  | (59 | ) |  | (552 | ) |  | (18,858 | )
Balance at December 31, 2016, as revised | 309,802 |  |  | 967 |  |  | 8,544 |  |  | 366,871 |
Revisions of quantity estimate | 1,344 |  |  | 211 |  |  | (434 | ) |  | 3 |
Extensions and discoveries (2) | — |  |  | — |  |  | — |  |  | — |
Acquisitions and divestitures | — |  |  | — |  |  | — |  |  | — |
Production | (18,104 | ) |  | (71 | ) |  | (608 | ) |  | (22,178 | )
Balance at December 31, 2017 (2) | 293,042 |  |  | 1,107 |  |  | 7,502 |  |  | 344,696 |
Revisions of quantity estimate | 47,871 |  |  | 732 |  |  | 5,602 |  |  | 85,875 |
Extensions and discoveries | — |  |  | — |  |  | — |  |  | — |
Acquisitions and divestitures | 22,391 |  |  | 12 |  |  | 191 |  |  | 23,609 |
Production | (25,513 | ) |  | (106 | ) |  | (712 | ) |  | (30,421 | )
Balance at December 31, 2018 (3) | 337,791 |  |  | 1,745 |  |  | 12,583 |  |  | 423,759 |
Total at December 31, 2018 | 337,880 |  |  | 1,749 |  |  | 12,584 |  |  | 423,878 |
__________________________________________________
(1) | MMcfe is based on a ratio of 6 Mcf to 1 barrel.
(2) | During 2017, the Company’s estimated proved reserves, inclusive of the Company’s share of Laramie Energy’s estimated proved reserves, decreased by 22,095 MMcfe or approximately 6%. Production volumes related to our share of Laramie Energy’s estimated proved reserves resulted in a decrease of 22,178 MMcfe. Beginning in 2017, Par has decided to base its determination of Laramie Energy proved undeveloped reserves on only a two year drilling and three year completion time horizon, which has resulted in negative revisions to our proved reserves of 17,216 MMcfe during 2017. The Company’s share of Laramie Energy’s revisions of quantity estimate also includes 30,362 MMcfe of positive revisions associated with 44 probable locations that were converted to proved developed reserves during 2017. These 44 locations converted to proved reserves during 2017 were not considered extensions because they were drilled in proved areas that are slightly offset to other proved locations. The remaining decrease in estimated proved reserves was due to performance and other changes to the Company’s share of Laramie Energy’s proved developed producing and developed non-producing reserves.
(3) | During 2018, the Company’s estimated proved reserves, inclusive of the Company’s share of Laramie Energy’s estimated proved reserves, increased by 78,682 MMcfe or approximately 23%. The Company’s share of Laramie Energy’s revisions of quantity estimate increased primarily due to: 1) additions of 60,679 MMcfe of proved undeveloped reserves primarily located within Laramie Energy's northern acreage, 2) 11,614 MMcfe of positive revisions associated with 13 probable locations that were converted to proved developed reserves during 2018, and 3) 13,582 MMcfe of positive revisions due to performance improvements and other changes to the Company’s share of Laramie Energy’s proved developed and undeveloped reserves. Production volumes related to our share of Laramie Energy’s estimated proved reserves resulted in a decrease of 30,421 MMcfe. During 2018, Laramie Energy closed on a purchase and contribution agreement with an unaffiliated third party that contributed 23,609 MMcfe of proved developed reserves in the Piceance Basin.
A summary of proved developed and undeveloped reserves for the years ended December 31, 2018, 2017, and 2016 is presented below:
| Gas |  | Oil |  | NGLS |  | Total
| (MMcf) |  | (Mbbl) |  | (Mbbl) |  | (MMcfe) (1)
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 | 150,302 |  |  | 451 |  |  | 4,195 |  |  | 178,181 |
Total | 150,302 |  |  | 451 |  |  | 4,195 |  |  | 178,181 |
December 31, 2017 |  |  |  |  |  |  |
Proved developed reserves |  |  |  |  |  |  |
Company | 392 |  |  | 7 |  |  | 11 |  |  | 500 |
Company’s share of Laramie Energy | 174,464 |  |  | 658 |  |  | 4,589 |  |  | 205,946 |
Total | 174,856 |  |  | 665 |  |  | 4,600 |  |  | 206,446 |
Proved undeveloped reserves |  |  |  |  |  |  |
Company | — |  |  | — |  |  | — |  |  | — |
Company’s share of Laramie Energy | 118,578 |  |  | 449 |  |  | 2,913 |  |  | 138,750 |
Total | 118,578 |  |  | 449 |  |  | 2,913 |  |  | 138,750 |
December 31, 2018 |  |  |  |  |  |  |
Proved developed reserves |  |  |  |  |  |  |
Company | 89 |  |  | 4 |  |  | 1 |  |  | 119 |
Company’s share of Laramie Energy | 256,363 |  |  | 1,420 |  |  | 8,868 |  |  | 318,091 |
Total | 256,452 |  |  | 1,424 |  |  | 8,869 |  |  | 318,210 |
Proved undeveloped reserves |  |  |  |  |  |  |
Company | — |  |  | — |  |  | — |  |  | — |
Company’s share of Laramie Energy | 81,428 |  |  | 325 |  |  | 3,715 |  |  | 105,668 |
Total | 81,428 |  |  | 325 |  |  | 3,715 |  |  | 105,668 |
__________________________________________________
(1) | MMcfe is based on a ratio of 6 Mcf to 1 barrel.
| Price per MMbtu |  | WTI per Bbl
Base pricing, before adjustments for contractual differentials (Company and Laramie Energy): (1) |  |  |
December 31, 2016 | $ | 2.29 |  |  | $ | 42.75 |
December 31, 2017 | 2.68 |  |  | 51.34 |
December 31, 2018 | 2.47 |  |  | 65.56 |
______________________________________________
(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.
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,
| 2018 |  | 2017 |  | 2016
| (in thousands)
Company |  |  |  |  |
Future net cash flows | $ | 398 |  |  | $ | 1,802 |  |  | $ | 1,154 |
Future costs |  |  |  |  |
Production | 123 |  |  | 902 |  |  | 713 |
Development and abandonment | 35 |  |  | — |  |  | 2 |
Income taxes (1) | — |  |  | — |  |  | — |
Future net cash flows | 240 |  |  | 900 |  |  | 439 |
10% discount factor | (110 | ) |  | (328 | ) |  | (154 | )
Discounted future net cash flows | $ | 130 |  |  | $ | 572 |  |  | $ | 285 |
Company’s share of Laramie Energy |  |  |  |  |
Future net cash flows | $ | 1,283,890 |  |  | $ | 1,026,005 |  |  | $ | 905,607 |
Future costs |  |  |  |  |
Production | 583,112 |  |  | 491,748 |  |  | 462,684 |
Development and abandonment | 93,546 |  |  | 109,248 |  |  | 136,224 |
Income taxes (1) | — |  |  | — |  |  | — |
Future net cash flows | 607,232 |  |  | 425,009 |  |  | 306,699 |
10% discount factor | (288,130 | ) |  | (209,188 | ) |  | (165,557 | )
Discounted future net cash flows | $ | 319,102 |  |  | $ | 215,821 |  |  | $ | 141,142 |
Total discounted future net cash flows | $ | 319,232 |  |  | $ | 216,393 |  |  | $ | 141,427 |
_______________________________________________
(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, 2018, 2017, and 2016 are as follows (in thousands):
| Company |  | Company's Share of Laramie Energy |  | Total
Balance at January 1, 2016 | $ | 192 |  |  | $ | 39,605 |  |  | $ | 39,797 |
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 |  |  | 16,995 |  |  | 17,137 |
Previously estimated development and abandonment costs incurred during the period | — |  |  | 12,805 |  |  | 12,805 |
Accretion of discount | 19 |  |  | 4,000 |  |  | 4,019 |
Balance at December 31, 2016 | 285 |  |  | 141,142 |  |  | 141,427 |
Sales of oil and gas production during the period, net of production costs | (28 | ) |  | (29,911 | ) |  | (29,939 | )
Net change in prices and production costs | (60 | ) |  | 35,597 |  |  | 35,537 |
Revisions of previous quantity estimates, estimated timing of development and other | 346 |  |  | 37,692 |  |  | 38,038 |
Previously estimated development and abandonment costs incurred during the period | — |  |  | 17,187 |  |  | 17,187 |
Accretion of discount | 29 |  |  | 14,114 |  |  | 14,143 |
Balance at December 31, 2017 | 572 |  |  | 215,821 |  |  | 216,393 |
Sales of oil and gas production during the period, net of production costs | (127 | ) |  | (47,165 | ) |  | (47,292 | )
Acquisitions and divestitures | — |  |  | 35,182 |  |  | 35,182 |
Net change in prices and production costs | 20 |  |  | (1,365 | ) |  | (1,345 | )
Revisions of previous quantity estimates, estimated timing of development and other | (392 | ) |  | 54,311 |  |  | 53,919 |
Previously estimated development and abandonment costs incurred during the period | — |  |  | 40,736 |  |  | 40,736 |
Accretion of discount | 57 |  |  | 21,582 |  |  | 21,639 |
Balance at December 31, 2018 | $ | 130 |  |  | $ | 319,102 |  |  | 319,232 |

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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 Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 932 -SubTopic 360 -URI http://asc.fasb.org/subtopic&trid=2145654 + Details
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