Property and Equipment

12 Months Ended

Dec. 31, 2015

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

The following table presents a summary of the Company’s property and equipment balances as of December 31, 2015 and 2014 (in thousands).

	December 31,
	2015			2014
Oil and natural gas properties
Evaluated (subject to amortization)	$	2,122,174		$	1,617,913
Unproved and unevaluated (not subject to amortization)	387,504			264,419
Total oil and natural gas properties	2,509,678			1,882,332
Accumulated depletion	(1,574,040		)	(596,218		)
Net oil and natural gas properties	935,638			1,286,114
Other property and equipment
Midstream support equipment and facilities	78,564			38,135
Furniture, fixtures and other equipment	2,918			2,633
Software	2,193			1,733
Land	1,539			—
Leasehold improvements	1,173			971
Total other property and equipment	86,387			43,472
Accumulated depreciation	(9,619		)	(7,514		)
Net other property and equipment	76,768			35,958
Net property and equipment	$	1,012,406		$	1,322,072

The following table provides a breakdown of the Company’s unproved and unevaluated property costs not subject to amortization as of December 31, 2015 and the year in which these costs were incurred (in thousands).

Description	2015		2014		2013		2012 and prior		Total
Costs incurred for
Property acquisition	$	238,436	$	68,207	$	41,800	$	672	$	349,115
Exploration wells	14,650		30		—		—		14,680
Development wells	22,558		1,151		—		—		23,709
Total	$	275,644	$	69,388	$	41,800	$	672	$	387,504

Property acquisition costs primarily include leasehold costs paid to secure oil and natural gas mineral leases, but may also include broker and legal expenses, geological and geophysical expenses and capitalized internal costs associated with developing oil and natural gas prospects on these properties. Property acquisition costs are transferred into the amortization base on an ongoing basis as these properties are evaluated and proved reserves are established or impairment is determined. Unproved and unevaluated properties are assessed for possible impairment on a periodic basis based upon changes in operating or economic conditions.

Property acquisition costs incurred which remain in unproved and unevaluated property at December 31, 2015 are related primarily to the Company’s leasehold acquisitions in the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas during the past three years. These costs include, in particular, the cost of the acreage acquired as part of the HEYCO Merger (as described and defined in Note 5) in 2015. These costs are associated with acreage for which proved reserves have yet to be assigned. A significant portion of these costs are associated with properties which are held by production or have automatic lease renewal options. As the Company drills wells and assigns proved reserves to these properties or determines that certain portions of this acreage, if any, cannot be assigned proved reserves, portions of these costs are transferred to the amortization base.

Costs excluded from amortization also include those costs associated with exploration and development wells in progress or awaiting completion at year-end. These costs are transferred into the amortization base on an ongoing basis as these wells are completed and proved reserves are established or confirmed. These costs totaled $38.4 million at December 31, 2015. Of this total, $14.7 million was associated with exploration wells and $23.7 million was associated with development wells. The Company anticipates that most of the $38.4 million associated with these wells in progress at December 31, 2015 will be transferred to the amortization base during 2016.