Properties and Equipment

3 Months Ended

Mar. 31, 2020

Property, Plant and Equipment [Line Items]

Property, Plant and Equipment Disclosure

PROPERTIES AND EQUIPMENT

The following table presents the components of properties and equipment, net of accumulated depreciation, depletion and amortization ("DD&A"):

	March 31, 2020			December 31, 2019
	(in thousands)
Properties and equipment, net:
Crude oil and natural gas properties
Proved	$	7,131,659		$	6,241,780
Unproved	385,138			403,379
Total crude oil and natural gas properties	7,516,797			6,645,159
Equipment and other	64,498			41,888
Land and buildings	26,664			12,312
Construction in progress	615,073			408,428
Properties and equipment, at cost	8,223,032			7,107,787
Accumulated DD&A	(3,188,538		)	(3,012,585		)
Properties and equipment, net	$	5,034,494		$	4,095,202

Impairment Charges. During the three months ended March 31, 2020, due to a significant decline in crude oil prices, we experienced a triggering event that required us to assess our crude oil and natural gas properties for possible impairment. As a result of our assessment, we recorded impairment charges of $881.1 million to write-down our proved and unproved properties. Of these impairment charges, approximately $753.0 million was related to our Delaware Basin proved properties. These impairment charges represented the amount by which the carrying value of the crude oil and natural gas properties exceeded the estimated fair value. The estimated fair value was determined based on estimated future discounted net cash flows, a Level 3 input, using estimated production and realized prices at which we reasonably expect the crude oil and natural gas will be sold. In addition to our proved property impairment, we also recognized approximately $127.3 million of impairment charges for our unproved properties in the Delaware Basin. These impairment charges were recognized based on a review of our current drilling plans, estimated future cash flows for probable well locations and expected future lease expirations, primarily in areas where we have no development plans.

Impairment charges of $7.9 million recorded for the three months ended March 31, 2019 were primarily related to leaseholds and leasehold expirations within our non-focus areas of the Delaware Basin where we were no longer pursuing plans to develop the properties. We determined the fair value of the properties based upon estimated future discounted cash flow, a Level 3 input, using estimated production and prices at which we reasonably expect the crude oil and natural gas will be sold.

Suspended Well Costs. The following table presents the capitalized exploratory well cost pending determination of proved reserves and included in properties and equipment, net on the condensed consolidated balance sheets:

    

	Three Months Ended March 31,			Year Ended December 31, 2019
	(in thousands, except for number of wells)
Beginning balance	$	16,078		$	12,188
Additions to capitalized exploratory well costs pending the determination of proved reserves	11,408			31,901
Reclassifications to proved properties	(20,311		)	(28,011		)
Ending balance	$	7,175		$	16,078
Number of wells pending determination at period-end	2			4

During three months ended March 31, 2020, two wells classified as exploratory at December 31, 2019 were reclassified as productive and no new wells drilled were classified as exploratory.