XML 19 R9.htm IDEA: XBRL DOCUMENT v3.23.1
Summary of Significant Accounting Policies
 3 Months Ended
Mar. 31, 2023
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies Summary of Significant Accounting Policies
Significant Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. These estimates and assumptions may also affect disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
The Company evaluates these estimates on an ongoing basis, using historical experience, consultation with experts and other methods the Company considers reasonable in the particular circumstances. Actual results may differ significantly from the Company’s estimates. Any effects on the Company’s business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the facts that give rise to the revision become known. Significant items subject to such estimates and assumptions include, but are not limited to, estimates of proved oil and natural gas reserves and related present value estimates of future net cash flows therefrom, the carrying value of oil and natural gas properties, accounts receivable, accrued capital expenditures and operating expenses, ARO, the fair value determination of acquired assets and assumed liabilities, certain tax accruals and the fair value of derivatives.
Accounts Receivable
Accounts receivable is summarized below:
March 31, 2023December 31, 2022
(In thousands)
Oil, natural gas and NGL sales$23,804 $24,136 
Joint interest accounts receivable728 793 
Other accounts receivable108 622 
Total accounts receivable$24,640 $25,551 
The Company had no allowance for credit losses at March 31, 2023 and December 31, 2022.
Other Non-Current Assets, Net
Other non-current assets consisted of the following:
March 31, 2023December 31, 2022
(In thousands)
Deferred financing costs, net$2,413 $2,556 
Prepayments to outside operators2,193 186 
Right of use assets1,232 1,370 
Equity method investment3,880 — 
Other deposits66 63 
Total other non-current assets, net$9,784 $4,175 
Equity method investment. In January 2023, the Company entered into an agreement to form a joint venture created for the purpose of constructing a new power infrastructure for onsite power generation in Yoakum County, Texas using produced natural gas. RPC Power Holdco LLC, a wholly owned subsidiary of REPX, has a 30% investment in the joint venture, RPC Power LLC ("RPC Power"). The Company will contribute its portion of capital expenditures for construction of the onsite power generation. As of March 31, 2023, the Company invested $4.1 million, comprised of $1.8 million in cash and $2.3 million of contributed assets, which was reduced by a $0.2 million loss during the three months ended March 31, 2023.
The Company accounts for its corporate joint ventures under the equity method of accounting in accordance with FASB Accounting Standards Codification Topic 323 “Investments — Equity Method and Joint Ventures.” The Company applies the equity method of accounting to investments of less than 50% in an investee over which the Company exercises significant influence but does not have control. Under the equity method of accounting, the Company’s share of the investee’s earnings or loss is recognized in the condensed consolidated statement of operations.
Judgment regarding the level of influence over each equity method investment includes considering key factors such as ownership interest, representation on the board of directors, participation in policy-making decisions, material intercompany transactions and extent of ownership by an investor in relation to the concentration of other shareholdings.
Accrued Liabilities
Accrued liabilities consisted of the following:
March 31, 2023December 31, 2022
(In thousands)
Accrued capital expenditures$13,768 $16,744 
Accrued lease operating expenses2,267 4,607 
Accrued general and administrative costs3,591 2,286 
Accrued inventory210 6,235 
Accrued ad valorem tax916 3,789 
Other accrued expenditures766 1,921 
Total accrued liabilities$21,518 $35,582 

Other Current Liabilities
Other current liabilities consisted of the following:
March 31, 2023December 31, 2022
(In thousands)
Advances from joint interest owners$170 $192 
Income taxes payable4,601 1,194 
Current ARO liabilities71 314 
Lease liabilities540 538 
Total other current liabilities$5,382 $2,238 
Asset Retirement Obligations
Components of the changes in ARO consisted of the following and is shown below:
March 31, 2023December 31, 2022
(In thousands)
ARO, beginning balance$3,038 $2,453 
Liabilities incurred21 358 
Revision of estimated obligations— 326 
Liability settlements and disposals(153)(178)
Accretion25 79 
ARO, ending balance2,931 3,038 
Less: current ARO(1)
(71)(314)
ARO, long-term$2,860 $2,724 
_____________________
(1)Current ARO is included within other current liabilities on the accompanying condensed consolidated balance sheets.
Revenue Recognition
The following table presents oil and natural gas sales disaggregated by product:
Three Months Ended March 31,
20232022
(In thousands)
Oil and natural gas sales:
Oil$64,974 $62,376 
Natural gas523 1,789 
Natural gas liquids915 2,480 
Total oil and natural gas sales, net$66,412 $66,645 
Recent Accounting Pronouncements
No new accounting pronouncements have been adopted or issued that would impact the financial statements of the Company.