Property and Equipment

12 Months Ended

Dec. 31, 2020

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, 2020 and 2019 (in thousands).

	December 31,
	2020		2019
Oil and natural gas properties
Evaluated (subject to amortization)	$	5,295,931	$	4,557,265
Unproved and unevaluated (not subject to amortization)	902,133		1,126,992
Total oil and natural gas properties	6,198,064		5,684,257
Accumulated depletion	(3,623,265)		(2,603,681)
Net oil and natural gas properties	2,574,799		3,080,576
Midstream properties
Midstream equipment and facilities	841,695		643,903
Accumulated depreciation	(61,113)		(38,473)
Net midstream properties	780,582		605,430
Other property and equipment
Furniture, fixtures and other equipment	10,591		9,170
Software	8,116		8,099
Leasehold improvements	10,854		9,752
Total other property and equipment	29,561		27,021
Accumulated depreciation	(17,173)		(13,432)
Net other property and equipment	12,388		13,589
Net property and equipment	$	3,367,769	$	3,699,595

 The following table provides a breakdown of the Company’s unproved and unevaluated property costs not subject to amortization as of December 31, 2020 and the year in which these costs were incurred (in thousands).

Description	2020		2019		2018		2017 and prior		Total
Costs incurred for
Property acquisition	$	40,355	$	40,140	$	472,577	$	315,736	$	868,808
Exploration wells	576		1,855		169		397		2,997
Development wells	25,324		4,889		66		49		30,328
Total	$	66,255	$	46,884	$	472,812	$	316,182	$	902,133

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 that remain in unproved and unevaluated property at December 31, 2020 are related to the Company’s leasehold and mineral acquisitions in the Delaware Basin in Southeast New Mexico and West Texas. 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 that 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.

On September 12, 2018, the Company announced the successful acquisition of 8,400 gross and net leasehold acres in Lea and Eddy Counties, New Mexico for approximately $387 million in the Bureau of Land Management New Mexico Oil and Gas Lease Sale on September 5 and 6, 2018 (the “BLM Acquisition”). The BLM Acquisition was responsible for a significant portion of the Company’s property acquisition costs in 2018.

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 $33.3 million at December 31, 2020. Of this total, $3.0 million was associated with exploration wells and $30.3 million was associated with development wells. The Company anticipates that most of the $33.3 million associated with these wells in progress at December 31, 2020 will be transferred to the amortization base during 2021. Unproved and unevaluated property costs for exploration and development wells incurred from 2016 through 2019 are costs related to the advanced preparation for wells that we intend to drill in the future.