Properties and Equipment, Net

Properties and equipment, net are comprised of the following:



	December 31,
(In thousands)	2017			2016
Proved oil and gas properties	$	4,932,512		$	7,437,604
Unproved oil and gas properties	190,474			260,543
Gathering and pipeline systems	1,569			187,846
Land, building and other equipment	82,670			84,462
	5,207,225			7,970,455
Accumulated depreciation, depletion and amortization	(2,135,021		)	(3,720,330		)
	$	3,072,204		$	4,250,125

Assets Held for Sale

On December 11, 2017, the Company entered into an agreement to sell its operated and non-operated Haynesville Shale assets to an undisclosed buyer for $30.0 million, subject to customary purchase price adjustments, and classified these assets as held for sale. The Company expects to close this transaction in the first half of 2018.

On December 19, 2017, the Company entered into an agreement to sell its operated and non-operated Eagle Ford Shale assets to an affiliate of Venado Oil & Gas LLC for $765.0 million, subject to customary closing conditions and purchase price adjustments, and classified these assets as held for sale. The Company expects to close this transaction in the first quarter of 2018.

Balance sheet data related to the assets held for sale is as follows:



(In thousands)	December 31, 2017
ASSETS
Inventories	$	1,440
Properties and equipment, net	778,855
	780,295
LIABILITIES
Accounts payable	2,352
Asset retirement obligations	15,748
	18,100
Net assets held for sale	$	762,195

The assets held for sale as of December 31, 2017 do not qualify for discontinued operations as they do not represent a strategic shift that will have a major effect of the Company's operations or financial results.

Impairment of Oil and Gas Properties and Other Assets

In December 2017, the Company recorded an impairment of $414.3 million associated with its Eagle Ford Shale oil and gas properties located in south Texas. The impairment of these properties was due to the anticipated sale of these assets, as demonstrated by the execution of a purchase and sale agreement with a third party on December 19, 2017. These assets were designated as held for sale and were reduced to fair value of approximately $765.6 million.

In June 2017, the Company recorded an impairment of $68.6 million associated with its proposed sale of oil and gas properties and related pipeline assets located in West Virginia, Virginia and Ohio. These assets were designated as held for sale as of June 30, 2017 and were reduced to fair value of approximately $37.9 million.

In December 2016, the Company recorded an impairment of $435.6 million associated with oil and gas properties and related pipeline assets located in West Virginia and Virginia. In the fourth quarter of 2016, although oil and natural gas prices had improved since late 2015, the Company performed an impairment test of its West Virginia and Virginia fields because it had then determined that it was more likely than not that we would dispose of these assets significantly earlier than their remaining expected useful life. As a result of its step one assessment, which was based on a probability weighted assessment that considered the anticipated disposition of these assets earlier than their remaining expected useful life, the Company determined that these assets were impaired which resulted in an impairment charge of $435.6 million. These assets were reduced to fair value of approximately $89.2 million. The fair value of these assets was based on a market approach that considered the preliminary price contained in a draft purchase and sale agreement that was under negotiation with a potential buyer as of December 31, 2016.

In December 2015, the Company recorded an impairment of $114.9 million associated with oil and gas properties in certain fields in south Texas, east Texas and Louisiana. The impairment of these fields was due to a significant decline in commodity prices in late 2015. These fields were reduced to fair value of approximately $89.9 million using discounted future cash flows.

The fair value of the impaired assets in 2017 was determined using a market approach that took into consideration the expected sales price included in the respective purchase and sale agreements the Company executed in June and December 2017. Accordingly, the inputs associated with the fair value of these assets were considered Level 3 in the fair value hierarchy. Refer to Note 1 for a description of fair value hierarchy.

The fair value of the impaired assets in 2016 was determined using a market approach that took into consideration the preliminary purchase price included in a draft purchase and sale agreement that was under negotiation with a potential buyer as of December 31, 2016. Accordingly, the inputs associated with the fair value of these assets were considered Level 3 in the fair value hierarchy. Refer to Note 1 for a description of fair value hierarchy.

The fair value of the impaired properties in 2015 was determined using an income approach that was based on significant inputs that were not observable in the market and are considered to be Level 3 inputs as defined by ASC 820. Refer to Note 1 for a description of fair value hierarchy. Key assumptions included (i) reserves, including risk adjustments for probable and possible reserves; (ii) production rates based on the Company's experience with similar properties in which it operates; (iii) estimated future operating and development costs; (iv) future commodity prices; (v) future cash flows; and (vi) a market-based weighted average cost of capital rate of 10%.

Capitalized Exploratory Well Costs

The following table reflects the net changes in capitalized exploratory well costs:



	Year Ended December 31,
(In thousands)	2017		2016		2015
Balance at beginning of period	$	—	$	—	$	10,557
Additions to capitalized exploratory well costs pending the determination of proved reserves	19,511		—		—
Reclassifications to wells, facilities, and equipment based on the determination of proved reserves	—		—		(10,557		)
Capitalized exploratory well costs charged to expense	—		—		—
Balance at end of period	$	19,511	$	—	$	—

The following table provides an aging of capitalized exploratory well costs based on the date the drilling was completed:



	December 31,
(In thousands)	2017		2016		2015
Capitalized exploratory well costs that have been capitalized for a period of one year or less	$	19,511	$	—	$	—
Capitalized exploratory well costs that have been capitalized for a period greater than one year	—		—		—
	$	19,511	$	—	$	—