Property and Equipment

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment [Abstract]

The following table presents a summary of the Company’s property and equipment balances as of December 31, 2022 and 2021 (in thousands).


	December 31,
	2022		2021
Oil and natural gas properties
Evaluated (subject to amortization)	$	6,862,455	$	6,007,325
Unproved and unevaluated (not subject to amortization)	977,502		964,714
Total oil and natural gas properties	7,839,957		6,972,039
Accumulated depletion	(4,362,292)		(3,933,355)
Net oil and natural gas properties	3,477,665		3,038,684
Midstream properties
Midstream equipment and facilities	1,057,668		900,979
Accumulated depreciation	(126,706)		(92,574)
Net midstream properties	930,962		808,405
Other property and equipment
Furniture, fixtures and other equipment	13,257		10,923
Software	8,225		8,225
Leasehold improvements	11,365		10,975
Total other property and equipment	32,847		30,123
Accumulated depreciation	(23,277)		(20,527)
Net other property and equipment	9,570		9,596
Net property and equipment	$	4,418,197	$	3,856,685

The following table provides a breakdown of the Company’s unproved and unevaluated property costs not subject to amortization as of December 31, 2022 and the year in which these costs were incurred (in thousands).


Description	2022		2021		2020		2019		2018 and prior		Total
Costs incurred for
Property acquisition	$	97,748	$	110,077	$	40,355	$	40,140	$	606,740	$	895,060
Exploration wells	32,364		942		354		802		36		34,498
Development wells	42,543		1,641		1,245		2,506		9		47,944

Total	$	172,655	$	112,660	$	41,954	$	43,448	$	606,785	$	977,502

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, 2022 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 $82.4 million at December 31, 2022. Of this total, $34.5 million was associated with exploration wells and $47.9 million was associated with development wells. The

Company anticipates that most of the $82.4 million associated with these wells in progress at December 31, 2022 will be transferred to the amortization base during 2023. Unproved and unevaluated property costs for exploration and development wells incurred in years prior to 2022 are costs related to the advanced preparation for wells that the Company intends to drill in the future.