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Commitments and Contingencies
 12 Months Ended
Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
The Company is involved in various claims and lawsuits incidental to its business. In the opinion of management, the ultimate liability hereunder, if any, will not have a material adverse effect on the financial position or results of operations of the Company.
The Company’s activities are subject to federal, state and local laws and regulations governing environmental quality and pollution control. Although no assurances can be made, the Company believes that, absent the occurrence of an extraordinary event, compliance with existing federal, state and local laws, rules and regulations governing the release of materials into the environment or otherwise relating to the protection of the environment are not expected to have a material effect upon the capital expenditures, earnings or the competitive position of the Company with respect to its existing assets and operations. The Company cannot predict what effect additional regulation or legislation, enforcement policies hereunder, and claims for damages to property, employees, other persons and the environment resulting from the Company’s operations could have on its activities.
The table below presents total minimum commitments associated with long-term, non-cancelable leases, drilling rig contracts and gathering, processing and transportation service agreements, which require minimum volumes of oil, natural gas, or produced water to be delivered, as of December 31, 2020.
202120222023202420252026 and ThereafterTotal
(In thousands)
Operating leases (1)
$10,601$5,443$5,011$4,936$3,958$14,139$44,088
Drilling rig contracts (2)
4,317 — — — — — 4,317 
Delivery commitments (3)
12,401 10,980 11,553 12,451 12,417 39,291 99,093 
Produced water disposal commitments (4)
21,355 18,320 10,775 7,975 4,267 741 63,433 
Total$48,674$34,743$27,339$25,362$20,642$54,171$210,931

(1)Operating leases primarily consist of contracts for office space. See “Note 13 – Leases” for additional information.
(2)Drilling rig contracts represent gross contractual obligations and accordingly, other joint owners in the properties operated by the Company will generally be billed for their working interest share of such costs. In January 2021, the Company extended one of its drilling rig contracts for a term of one year. The gross contractual obligation for this extended drilling rig contract is approximately $5.5 million and is not included in the table above as it was entered into subsequent to December 31, 2020.
(3)Delivery commitments represent contractual obligations the Company has entered into for certain gathering, processing and transportation service agreements which require minimum volumes of oil or natural gas to be delivered. The amounts in the table above reflect the aggregate undiscounted deficiency fees assuming no delivery of any oil or natural gas.
(4)Produced water disposal commitments represent contractual obligations the Company has entered into for certain service agreements which require minimum volumes of produced water to be delivered. The amounts in the table above reflect the aggregate undiscounted deficiency fees assuming no delivery of any produced water.
Operating leases
As of December 31, 2020, the Company had contracts for two horizontal drilling rigs. The contract terms will end on various dates between March 2021 and May 2021.
Other commitments
The following table includes the Company’s current oil sales contracts and firm transportation agreements as of December 31, 2020: 
Type of Commitment (1)
RegionExecution DateStart DateEnd DateCommitted
Volumes (Bbls/d)
Oil sales contractEagle FordNovember 2020January 2021December 202110,000
Oil sales contractPermianAugust 2020August 2020December 20217,500
Oil sales contractPermianJuly 2019August 2021July 20265,000
Oil sales contractPermianJune 2019January 2020December 202410,000
Oil sales contractPermianAugust 2018April 2020March 202215,000
Firm transportation agreement (2)(3)
PermianJune 2019August 2020July 203010,000
Firm transportation agreement (2)
PermianAugust 2018April 2020March 202715,000

(1)For each of the commitments shown in the table above, the committed barrels may include volumes produced by the Company and other third-party working, royalty, and overriding royalty interest owners whose volumes the Company markets on their behalf.
(2)Each of the firm transportation agreements shown in the table above grant the Company access to delivery points in several locations along the Gulf Coast.
(3)The committed volumes shown in the table above for this particular firm transportation agreement are average volumes. For the terms of August 2020-July 2023, August 2023-July 2027 and August 2027-July 2030, the committed volumes are 7,500 Bbls/d, 10,000 Bbls/d and 12,500 Bbls/d, respectively.