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Oil and Natural Gas Properties | 12 Months Ended
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Dec. 31, 2022
Extractive Industries [Abstract] |
Oil and Natural Gas Properties | Oil and Natural Gas Properties Oil and natural gas properties are summarized below:
| December 31, 2022 |  | December 31, 2021
| (In thousands)
Proved | $ | 516,011 |  |  | $ | 421,779 |
Unproved | 12,770 |  |  | 18,839 |
Work-in-progress | 45,169 |  |  | 13,534 |
| 573,950 |  |  | 454,152 |
Accumulated depletion, amortization and impairment | (133,848) |  |  | (95,021) |
Total oil and natural gas properties, net | $ | 440,102 |  |  | $ | 359,131 |
At December 31, 2022 and 2021, the Company had one exploratory well drilled but uncompleted that was included in work-in-progress with associated well costs of $3.8 million and $3.7 million, respectively. At December 31, 2022, the Company had one exploratory well with costs of $3.8 million that has been capitalized for greater than two years. The Company is in the process of evaluating completion methods for this exploratory well. Depletion and amortization expense for proved oil and natural gas properties was $31.5 million for the year ended December 31, 2022, $6.7 million for the three months ended December 31, 2021, and $25.2 million for the year ended September 30, 2021. Exploration expense was $2.0 million for the year ended December 31, 2022, $0.6 million for the three months ended December 31, 2021, and $9.6 million for the year ended September 30, 2021. Exploration expense was primarily attributable to the expiration of oil and natural gas leases for the year ended December 31, 2022, the three months ended December 31, 2021 and year ended September 30, 2021. Impairment of Proved Properties Certain proved oil and natural gas properties were impaired during year ended December 31, 2022. Our impairment test involved a Step 1 assessment to determine if the net book value of our proved oil and natural gas properties is expected to be recovered from the estimated undiscounted future net cash flows. We calculated the expected undiscounted future net cash flows of our long-lived assets using management’s assumptions and expectations. See further discussion in Note 7 - Fair Value Measurements. Certain oil and natural gas properties in our New Mexico operating area failed the Step 1 assessment. For these assets, we used a discounted cash flow analysis to estimate fair value. The expected future net cash flows were discounted using a rate of 10.25%, which we believe represents the estimated weighted average cost of capital of a market participant. Based on Step 2 of our long-lived assets impairment test, we recognized a $7.3 million impairment because the carrying value exceeded the estimated fair market value as of the year ended December 31, 2022. See further discussion of our fair value assumptions in Note 7 - Fair Value Measurements.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 932 -SubTopic 360 -URI https://asc.fasb.org/subtopic&trid=2145654 + Details
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