Property and Equipment

12 Months Ended

Dec. 31, 2021

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, 2021 and 2020 (in thousands).

	December 31,
	2021		2020
Oil and natural gas properties
Evaluated (subject to amortization)	$	6,007,325	$	5,295,931
Unproved and unevaluated (not subject to amortization)	964,714		902,133
Total oil and natural gas properties	6,972,039		6,198,064
Accumulated depletion	(3,933,355)		(3,623,265)
Net oil and natural gas properties	3,038,684		2,574,799
Midstream properties
Midstream equipment and facilities	900,979		841,695
Accumulated depreciation	(92,574)		(61,113)
Net midstream properties	808,405		780,582
Other property and equipment
Furniture, fixtures and other equipment	10,923		10,591
Software	8,225		8,116
Leasehold improvements	10,975		10,854
Total other property and equipment	30,123		29,561
Accumulated depreciation	(20,527)		(17,173)
Net other property and equipment	9,596		12,388
Net property and equipment	$	3,856,685	$	3,367,769

 The following table provides a breakdown of the Company’s unproved and unevaluated property costs not subject to amortization as of December 31, 2021 and the year in which these costs were incurred (in thousands).

Description	2021		2020		2019		2018		2017 and prior		Total
Costs incurred for
Property acquisition	$	111,120	$	40,355	$	40,140	$	417,114	$	287,666	$	896,395
Exploration wells	14,738		411		1,199		123		274		16,745
Development wells	46,232		2,027		3,245		60		10		51,574
Total	$	172,090	$	42,793	$	44,584	$	417,297	$	287,950	$	964,714

Property acquisition costs are costs incurred to purchase, lease or otherwise acquire oil and natural gas properties, 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, 2021 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.

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 $68.3 million at December 31, 2021. Of this total, $16.7 million was associated with exploration wells and $51.6 million was associated with development wells. The

Company anticipates that most of the $68.3 million associated with these wells in progress at December 31, 2021 will be transferred to the amortization base during 2022. Unproved and unevaluated property costs for exploration and development wells incurred in years prior to 2021 are costs related to the advanced preparation for wells that the Company intends to drill in the future.