Property, Plant and Equipment

12 Months Ended

Dec. 31, 2018

Property, Plant and Equipment [Abstract]

Property, plant and equipment consists of the following (in thousands):


	December 31,
	2018		2017
Oil and natural gas properties
Proved	$	1,269,091	$	1,056,806
Unproved	60,152		100,884
Total oil and natural gas properties	1,329,243		1,157,690
Less accumulated depreciation, depletion and impairment	(580,132)		(460,431)
Net oil and natural gas properties capitalized costs	749,111		697,259

Land	4,400		4,500
Electrical infrastructure	131,176		131,010
Non-oil and natural gas equipment	13,458		26,809
Buildings and structures	77,148		79,548
Total	226,182		241,867
Less accumulated depreciation and amortization	(25,344)		(15,886)
Other property, plant and equipment, net	200,838		225,981
Total property, plant and equipment, net	$	949,949	$	923,240

The average rates used for depreciation and depletion of oil and natural gas properties were $10.32 per Boe in 2018, $7.92 per Boe in 2017, $8.31 per Boe in the Successor 2016 Period and $6.05 per Boe in the Predecessor 2016 Period.

See Note 8 for discussion of impairment of other property, plant and equipment.

The Company had approximately $10.6 million in assets classified as held for sale in the other current assets line of the accompanying consolidated balance sheet at December 31, 2017. Approximately $9.3 million of this total was related to one of the Company’s properties located in downtown Oklahoma City, OK, which was classified as held for sale in the fourth quarter of 2017 and sold during the second quarter of 2018 for a net amount of approximately $10.4 million, including transaction fees. The resulting gain of $1.1 million was recorded in other operating expense on the accompanying condensed consolidated statements of operations for the year ended December 31, 2018.

Additionally, during the first quarter of 2018, the Company classified its remaining midstream generator assets as held for sale. These assets had a carrying value of $5.7 million which exceeded the estimated net realizable value of $1.6 million

based on expected sales prices obtained from third parties. As a result, the Company recorded an impairment of $4.1 million for the year ended December 31, 2018. The midstream generator assets were sold during the second quarter of 2018 with no gain or loss recognized on the sale. No significant assets were classified as held for sale at December 31, 2018.

Costs Excluded from Amortization

The following table summarizes the costs, by year incurred, related to unproved properties, which were excluded from oil and natural gas properties subject to amortization at December 31, 2018 (in thousands):


			Year Cost Incurred
	Total		2018		2017		2016		2015 and Prior
Property acquisition	$	59,522	$	3,859	$	20,647	$	13,735	$	21,281
Exploration	630		13		323		243		51
Total costs incurred	$	60,152	$	3,872	$	20,970	$	13,978	$	21,332

For leases that do not have existing production that would otherwise extend the lease term, the Company estimates that any associated unproved costs will be evaluated and transferred to the amortization base of the full cost pool within a three to five year period from the original lease date. For leases that are held by production, the Company estimates that any associated unproved costs will be evaluated and transferred to the amortization base of the full cost pool within a 10-year period from the original lease date. In addition, the Company’s internal engineers evaluate all properties on a quarterly basis.