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Property and equipment
3 Months Ended
Mar. 31, 2021
Property, Plant and Equipment [Abstract]  
Property and equipment Property and equipment
The following table presents the Company's property and equipment as of the dates presented:
(in thousands)March 31, 2021December 31, 2020
Evaluated oil and natural gas properties$7,953,141 $7,874,932 
Less accumulated depletion and impairment(6,852,688)(6,817,949)
Evaluated oil and natural gas properties, net1,100,453 1,056,983 
Unevaluated oil and natural gas properties not being depleted60,260 70,020 
Midstream service assets182,405 181,718 
Less accumulated depreciation and impairment(71,322)(69,021)
Midstream service assets, net111,083 112,697 
Depreciable other fixed assets37,612 37,454 
Less accumulated depreciation and amortization(24,937)(24,344)
Depreciable other fixed assets, net12,675 13,110 
Land18,901 18,901 
Total property and equipment, net$1,303,372 $1,271,711 
See Note 10.b for discussion of impairments of long-lived assets during the three months ended March 31, 2020. See Note 6 in the 2020 Annual Report for additional discussion of the Company's property and equipment.
The Company uses the full cost method of accounting for its oil and natural gas properties. Under this method, all acquisition, exploration and development costs, including certain employee-related costs, incurred for the purpose of acquiring, exploring for or developing oil and natural gas properties, are capitalized and, once evaluated, depleted on a composite unit-of-production method based on estimates of proved oil, NGL and natural gas reserves. The depletion base includes estimated future development costs and dismantlement, restoration and abandonment costs, net of estimated salvage values. Capitalized costs include the cost of drilling and equipping productive wells, dry hole costs, lease acquisition costs, delay rentals and other costs related to such activities. Costs, including employee-related costs, associated with production and general corporate activities are expensed in the period incurred.
The Company excludes unevaluated property acquisition costs and exploration costs from the depletion calculation until it is determined whether or not proved reserves can be assigned to the properties. The Company capitalizes a portion of its interest costs to its unevaluated properties and such costs become subject to depletion when proved reserves can be assigned to the associated properties. All items classified as unevaluated properties are assessed on a quarterly basis for possible impairment. The assessment includes consideration of the following factors, among others: intent to drill, remaining lease term, geological and geophysical evaluations, drilling results and activity, the assignment of proved reserves and the economic viability of development if proved reserves are assigned. During any period in which these factors indicate an impairment, the cumulative drilling costs incurred to date for such property and all or a portion of the associated leasehold costs are transferred to the full cost pool and are then subject to depletion.
Sales of oil and natural gas properties, whether or not being depleted currently, are accounted for as adjustments of capitalized costs, with no gain or loss recognized, unless such adjustments would significantly alter the relationship between capitalized costs and proved reserves of oil, NGL and natural gas.
The following table presents costs incurred in the acquisition, exploration and development of oil and natural gas properties, with asset retirement obligations included in evaluated property acquisition costs and development costs, for the periods presented:
 Three months ended March 31,
(in thousands)20212020
Property acquisition costs:   
Evaluated$—  $7,586 
Unevaluated— 15,556 
Exploration costs3,957 6,710 
Development costs64,492 146,158 
Total oil and natural gas properties costs incurred$68,449 $176,010 
The aforementioned total oil and natural gas properties costs incurred included certain employee-related costs as shown in the table below.
The following table presents capitalized employee-related costs incurred in the acquisition, exploration and development of oil and natural gas properties for the periods presented:
Three months ended March 31,
(in thousands)20212020
Capitalized employee-related costs$4,241 $4,505 
The following table presents depletion expense, which is included in "Depletion, depreciation and amortization" on the unaudited consolidated statements of operations, and depletion expense per BOE sold of evaluated oil and natural gas properties for the periods presented:
Three months ended March 31,
(in thousands except per BOE data)20212020
Depletion expense of evaluated oil and natural gas properties$34,725 $57,752 
Depletion expense per BOE sold$4.88 $7.33 
The full cost ceiling is based principally on the estimated future net cash flows from proved oil, NGL and natural gas reserves, which exclude the effect of the Company's commodity derivative transactions, discounted at 10%. SEC guidelines require companies to use the unweighted arithmetic average first-day-of-the-month price for each month within the 12-month period prior to the end of the reporting period before differentials ("Benchmark Prices"). The Benchmark Prices are then adjusted for quality, certain transportation fees, geographical differentials, marketing bonuses or deductions and other factors affecting the price received at the delivery point ("Realized Prices") without giving effect to the Company's commodity derivative transactions. The Realized Prices are utilized to calculate the estimated future net cash flows in the full cost ceiling calculation. Significant inputs included in the calculation of discounted cash flows used in the impairment analysis include the Company's estimate of operating and development costs, anticipated production of proved reserves and other relevant data. In the event the unamortized cost of evaluated oil and natural gas properties being depleted exceeds the full cost ceiling, as defined by the SEC, the excess is expensed in the period such excess occurs. Once incurred, a write-down of oil and natural gas properties is not reversible. The unamortized cost of evaluated oil and natural gas properties being depleted did not exceed the full cost ceiling as of March 31, 2021, and as such, the Company did not record a first-quarter full cost ceiling impairment.
The following table presents the Benchmark Prices and the Realized Prices as of the dates presented:
March 31, 2021December 31, 2020September 30, 2020June 30, 2020
Benchmark Prices:
   Oil ($/Bbl)$36.49 $36.04 $39.88 $43.60 
   NGL ($/Bbl)(1)
$19.24 $16.63 $16.95 $16.87 
   Natural gas ($/MMBtu)$1.69 $1.21 $1.06 $0.87 
Realized Prices:
   Oil ($/Bbl)$38.28 $37.69 $41.08 $44.97 
   NGL ($/Bbl)$9.92 $7.43 $7.71 $7.66 
   Natural gas ($/Mcf)$1.20 $0.79 $0.68 $0.53 
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(1)    Based on the Company's average composite NGL barrel.
The following table presents full cost ceiling impairment expense, which is included in "Impairment expense" on the unaudited consolidated statements of operations for the periods presented:
Three months ended March 31,
(in thousands)20212020
Full cost ceiling impairment expense$— $177,182