Property and Equipment

9 Months Ended

Sep. 30, 2016

Property, Plant and Equipment [Abstract]

The following table summarizes our property and equipment as of the dates presented:



	Successor			Predecessor
	September 30,			December 31,
	2016			2015
Oil and gas properties:
Proved	$	241,308		$	2,678,415
Unproved	8,338			6,881
Total oil and gas properties	249,646			2,685,296
Other property and equipment	3,574			31,365
Total properties and equipment	253,220			2,716,661
Accumulated depreciation, depletion and amortization	(2,020		)	(2,372,266		)
	$	251,200		$	344,395

We account for our oil and gas properties by applying the full cost method in the Successor period whereas we utilized the successful efforts method during the Predecessor periods.

The following describes our accounting policies with respect to our oil and gas properties and equipment:

Under the full cost method of accounting for oil and gas properties, all costs incurred in the exploration, development and acquisition of oil and gas reserves are capitalized. Such costs may be incurred both prior to and after the acquisition of a property and include lease acquisitions, geological and geophysical, or seismic, drilling, completion and equipment costs. Internal costs incurred that are directly attributable to exploration, development and acquisition activities undertaken by us for our own account, and which are not attributable to production, general corporate overhead or similar activities are also capitalized.

Depreciation, depletion and amortization (“DD&A”) of our oil and gas properties is computed using the units-of-production method. We apply this method by multiplying the unamortized cost of our proved oil and gas properties, net of estimated salvage plus future development costs, by a rate determined by dividing the physical units of oil and gas produced during the period by the total estimated units of proved oil and gas reserves at the beginning of the period.

At the end of each quarterly reporting period, the unamortized cost of our oil and gas properties, net of deferred income taxes, is limited to the sum of the estimated discounted future net revenues from proved properties adjusted for costs excluded from amortization and related income taxes (“Ceiling Test”). The estimated discounted future net revenues are determined using the prior 12-month’s average price based on closing prices on the first day of each month, adjusted for differentials, discounted at 10%. The calculation of the Ceiling Test and provision for DD&A are based on estimates of proved reserves. There are significant uncertainties inherent in estimating quantities of proved reserves and projecting future rates of production, timing and plan of development.