PROPERTY, PLANT AND EQUIPMENT

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

In connection with the application of fresh start accounting, as discussed in Note 3 Fresh Start Accounting, we recorded our PP&E at fair value as of our emergence date. Predecessor accumulated depreciation, depletion and amortization was therefore eliminated as of that date.

We capitalize the costs incurred to acquire or develop our oil and natural gas assets, including ARO and capitalized interest. For asset acquisitions, purchase price, including liabilities assumed, is allocated to acquired assets based on relative fair values at the acquisition date.

We evaluate long-lived assets on a quarterly basis for possible impairment. We recorded a $1.7 billion impairment charge in the first quarter of 2020 for our proved and unproved oil and natural gas properties.

Property, plant and equipment, net consisted of the following:


	Successor		Predecessor
(in millions)	December 31, 2020		December 31, 2019
Proved oil and natural gas properties	$	2,416	$	21,285
Unproved oil and natural gas properties(a)	1		1,055
Facilities and other	272		549
Total property, plant and equipment	2,689		22,889
Accumulated depreciation, depletion and amortization	(34)		(16,537)
Total property, plant and equipment, net	$	2,655	$	6,352

(a)Includes a valuation allowance for unproved properties of zero and $823 million at December 31, 2020 and 2019, respectively.

The following table summarizes the activity of capitalized exploratory well costs:


	Successor		Predecessor
	November 1, 2020 - December 31, 2020		January 1, 2020 - October 31, 2020		Years ended December 31,
(in millions)					2019		2018
Beginning balance	$	3	$	7	$	5	$	4
Additions to capitalized exploratory well costs	—		—		12		19
Reclassification to property, plant and equipment	—		—		(3)		(2)
Charged to expense	—		(2)		(7)		(16)
Impact of fresh start accounting	—		(2)		—		—
Ending balance	$	3	$	3	$	7	$	5

There are not significant exploratory well costs in the periods presented that have been capitalized for a period greater than one year after the completion of drilling. In response to the commodity price environment, in the first quarter of 2020, we suspended our drilling program which continued throughout the remainder of 2020. Our capitalized exploratory well costs at December 31, 2020 are for permitted wells that we intend to drill.

See Note 13 Asset Impairment for more information on our first quarter impairment charge and Note 3 Fresh Start Accounting for more information on fair value adjustments.