(4)

Goodwill

Our goodwill relates to the excess of purchase price over amounts assigned to assets and liabilities from the MRD Merger which is equal to $1.6 billion at December 31, 2017. We performed a quantitative impairment test during third quarter 2017 due to a sustained decline in our market capitalization. Management utilized the assistance of a third-party valuation expert to determine the fair value of our business (our reporting unit). The fair value was determined based on a combination of a market and an income approach. As a result of this measurement, the fair value of our business exceeded the carrying value of net assets and no impairment was recorded. As of this date, our fair value exceeded book value by $1.4 billion or 24%. After considering the impact of the new tax law, our fair value exceeded our book value by $2.4 billion or 42%. For additional information regarding the new tax law, see Note 5.

During fourth quarter 2017, we conducted a qualitative impairment assessment, by examining relevant events and circumstances which could have a negative impact on our business such as: macroeconomic conditions, industry and market conditions, including the downturn in the oil and gas industry, cost factors that could have a negative effect on earnings and cash flows, overall financial performance, dispositions and acquisitions, and other relevant entity-specific events. We identified various factors to consider including commodity prices, our year-end proved reserves evaluation and the market value of our common stock. Our analysis indicated that the fair value of our business was not below book value. Although we based the fair value estimate on assumptions we believe to be reasonable, those assumptions are inherently unpredictable and uncertain.