Supplemental Oil and Gas Information (Unaudited) | N ote 18. Supplemental Oil and Gas Information (Unaudited) Capitalized Costs Relating to Oil and Natural Gas Producing Activities The total amount of capitalized costs relating to oil and natural gas producing activities and the total amount of related accumulated depreciation, depletion and amortization is as follows at the dates indicated. Successor Predecessor December 31, December 31, December 31, 2017 2016 2015 (In thousands) (In thousands) Evaluated oil and natural gas properties $ 603,053 $ 3,115,012 $ 3,616,325 Support equipment and facilities 100,225 199,093 205,876 Accumulated depletion, depreciation, and amortization (34,429 ) (1,743,274 ) (1,878,549 ) Total $ 668,849 $ 1,570,831 $ 1,943,652 Costs Incurred in Oil and Natural Gas Property Acquisition, Exploration and Development Activities Costs incurred in property acquisition, exploration and development activities were as follows for the periods indicated: Successor Predecessor Period from May 5, 2017 Period from through January 1, For the Year Ended December 31, 2017 through December 31, 2017 May 4, 2017 2016 2015 (In thousands) (In thousands) Property acquisition costs, proved $ — $ — $ — $ 77,834 Property acquisition costs, unproved — — — 1,887 Exploration — — 792 2,078 Development 51,925 9,573 54,310 233,241 Total $ 51,925 $ 9,573 $ 55,102 $ 315,040 Standardized Measure of Discounted Future Net Cash Flows from Proved Reserves As required by the FASB and SEC, the standardized measure of discounted future net cash flows presented below is computed by applying first-day-of-the-month average prices, year-end costs and legislated tax rates and a discount factor of 10 percent to proved reserves. We do not believe the standardized measure provides a reliable estimate of the Company’s expected future cash flows to be obtained from the development and production of its oil and gas properties or of the value of its proved oil and gas reserves. The standardized measure is prepared on the basis of certain prescribed assumptions including first-day-of-the-month average prices, which represent discrete points in time and therefore may cause significant variability in cash flows from year to year as prices change. Oil and Natural Gas Reserves Users of this information should be aware that the process of estimating quantities of “proved” and “proved developed” oil and natural gas reserves is very complex, requiring significant subjective decisions in the evaluation of all available geological, engineering and economic data for each reservoir. The data for a given reservoir may also change substantially over time as a result of numerous factors including, but not limited to, additional development activity, evolving production history and continual reassessment of the viability of production under varying economic conditions. As a result, revisions to existing reserve estimates may occur from time to time. Although every reasonable effort is made to ensure reserve estimates reported represent the most accurate assessments possible, the subjective decisions and variances in available data for various reservoirs make these estimates generally less precise than other estimates included in the financial statement disclosures. Proved reserves are those quantities of oil and natural gas that by analysis of geoscience and engineering data can be estimated with reasonable certainty to be economically producible — from a given date forward, from known reservoirs, and under existing economic conditions, operating methods and government regulations — prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time. We engaged Ryder Scott to audit our reserves estimates for all of our estimated proved reserves (by volume) at December 31, 2017. All proved reserves are located in the United States and all prices are held constant in accordance with SEC rules. The weighted-average benchmark product prices used for valuing the reserves are based upon the average of the first-day-of-the-month price for each month within the period January through December of each year presented: 2017 2016 2015 Oil ($/Bbl): WTI (1) $ 51.34 $ 42.75 $ 46.79 NGL ($/Bbl): WTI (1) $ 51.34 $ 42.75 $ 46.79 Natural Gas ($/MMbtu): Henry Hub (2) $ 2.98 $ 2.48 $ 2.58 (1) The weighted average WTI price was adjusted by lease for quality, transportation fees, and a regional price differential. (2) The weighted average Henry Hub price was adjusted by lease for energy content, compression charges, transportation fees, and regional price differentials. The following tables set forth estimates of the net reserves for the periods indicated: For the period from May 5, 2017 through December 31, 2017 (Successor) Oil Gas NGLs Equivalent (MBbls) (MMcf) (MBbls) (MMcfe) Proved developed and undeveloped reserves: Beginning of period 80,960 419,472 30,572 1,088,660 Extensions and discoveries 121 4,900 261 7,195 Production (2,380 ) (21,885 ) (1,114 ) (42,850 ) Revision of previous estimates (6,697 ) 4,071 (4,530 ) (63,284 ) End of year 72,004 406,558 25,189 989,721 Proved developed reserves: Beginning of period 57,803 297,101 21,963 775,693 End of year 50,014 299,481 17,982 707,459 Proved undeveloped reserves: Beginning of period 23,157 122,371 8,609 312,967 End of year 21,990 107,077 7,207 282,262 For the period from January 1, 2017 through May 4, 2017 (Predecessor) Oil Gas NGLs Equivalent (MBbls) (MMcf) (MBbls) (MMcfe) Proved developed and undeveloped reserves: Beginning of year 65,741 371,016 25,184 916,565 Extensions and discoveries 53 45 8 410 Production (1,204 ) (12,411 ) (616 ) (23,336 ) Revision of previous estimates 16,370 60,822 5,996 195,021 End of period 80,960 419,472 30,572 1,088,660 Proved developed reserves: Beginning of year 45,536 280,035 18,923 666,786 End of period 57,803 297,101 21,963 775,693 Proved undeveloped reserves: Beginning of year 20,205 90,981 6,261 249,779 End of period 23,157 122,371 8,609 312,967 Year Ended December 31, 2016 (Predecessor) Oil Gas NGLs Equivalent (MBbls) (MMcf) (MBbls) (MMcfe) Proved developed and undeveloped reserves: Beginning of year 90,945 461,526 43,395 1,267,571 Extensions and discoveries 297 288 42 2,320 Production (3,883 ) (44,776 ) (2,283 ) (81,773 ) Sale of minerals in place (3,228 ) (15,227 ) (123 ) (35,328 ) Revision of previous estimates (18,390 ) (30,795 ) (15,847 ) (236,225 ) End of year 65,741 371,016 25,184 916,565 Proved developed reserves: Beginning of year 50,817 311,147 30,315 797,936 End of year 45,536 280,035 18,923 666,786 Proved undeveloped reserves: Beginning of year 40,128 150,379 13,080 469,635 End of year 20,205 90,981 6,261 249,779 Year Ended December 31, 2015 (Predecessor) Oil Gas NGLs Equivalent (MBbls) (MMcf) (MBbls) (MMcfe) Proved developed and undeveloped reserves: Beginning of year 100,258 727,216 59,034 1,682,960 Extensions and discoveries 2,319 8,686 558 25,950 Purchase of minerals in place 10,132 34,128 367 97,122 Production (4,087 ) (50,875 ) (2,820 ) (92,315 ) Sale of minerals in place (380 ) (13,731 ) (758 ) (20,559 ) Revision of previous estimates (17,297 ) (243,898 ) (12,986 ) (425,587 ) End of year 90,945 461,526 43,395 1,267,571 Proved developed reserves: Beginning of year 54,723 417,247 37,260 969,141 End of year 50,817 311,147 30,315 797,936 Proved undeveloped reserves: Beginning of year 45,535 309,969 21,774 713,819 End of year 40,128 150,379 13,080 469,635 Noteworthy amounts included in the categories of proved reserve changes in the above tables include: • The 98.9 Bcfe reduction in reserves for the period from May 5, 2017 through December 31, 2017 is primarily due to a 13.4 Bcfe upward pricing revision and a 76.7 Bcfe downward revision due to updated well performance data and future anticipated development and maintenance cost increases. We added 7.2 Bcfe during the period from May 5, 2017 through December 31, 2017 due to extensions and discoveries. • The 172.1 Bcfe increase in reserves for the January 1, 2017 through May 4, 2017 is primarily due to a 204.6 Bcfe upward pricing revision and a 9.6 Bcfe downward revision due to updated well performance data. Proved undeveloped reserves increased primarily due to upward pricing during the period from January 1, 2017 through May 4, 2017. • The 351.0 Bcfe reduction in reserves for the year ended December 31, 2016 is primarily due to a 148.3 Bcfe downward pricing revision and an 87.9 Bcfe downward revision due to updated well performance data. We divested 35.3 Bcfe during the year ended December 31, 2016. Proved undeveloped reserves decreased primarily due to downward pricing during the year ended December 31, 2016. • The 415.4 Bcfe reduction in reserves for the year ended December 31, 2015 is primarily due to a 413 Bcfe downward pricing revision and a 13 Bcfe downward revision due to updated well performance data. We acquired 97.1 Bcfe during the year ended December 31, 2015, the largest being the 2015 Beta Acquisition of 58.5 Bcfe. Proved undeveloped reserves decreased primarily due to downward pricing during the year ended December 31, 2015. See Note 5 for additional information on acquisitions and divestitures. A variety of methodologies are used to determine our proved reserve estimates. The principal methodologies employed are reservoir simulation, decline curve analysis, volumetric, material balance, advance production type curve matching, petro-physics/log analysis and analogy. Some combination of these methods is used to determine reserve estimates in substantially all of our fields. The standardized measure of discounted future net cash flows is as follows: Successor Predecessor Period from May 5, 2017 Period from through January 1, For the Year Ended December 31, 2017 through December 31, 2017 May 4, 2017 2016 2015 (In thousands) (In thousands) Future cash inflows $ 5,149,623 $ 5,246,487 $ 3,666,731 $ 5,952,935 Future production costs (2,982,035 ) (3,275,952 ) (2,384,195 ) (3,194,577 ) Future development costs (530,133 ) (492,610 ) (440,496 ) (808,512 ) Future income tax expense — — — — Future net cash flows for estimated timing of cash flows 1,637,455 1,477,925 842,040 1,949,846 10% annual discount for estimated timing of cash flows (869,784 ) (786,836 ) (446,199 ) (1,360,292 ) Standardized measure of discounted future net cash flows $ 767,671 $ 691,089 $ 395,841 $ 589,554 Changes in Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Reserves The following is a summary of the changes in the standardized measure of discounted future net cash flows for the proved oil and natural gas reserves during each of the years in the three year period ended December 31, 2017: Successor Predecessor Period from May 5, 2017 Period from through January 1, For the Year Ended December 31, 2017 through December 31, 2017 May 4, 2017 2016 2015 (In thousands) (In thousands) Beginning of year $ 691,089 $ 395,841 $ 589,554 $ 2,911,987 Sale of oil and natural gas produced, net of production costs (100,946 ) (57,420 ) (107,357 ) (128,382 ) Purchase of minerals in place — — — 75,998 Sale of minerals in place — — (28,277 ) (45,100 ) Extensions and discoveries 7,187 1,320 2,016 18,582 Changes in income taxes, net — — — 63,180 Changes in prices and costs 161,106 306,375 (404,870 ) (2,764,481 ) Previously estimated development costs incurred 61,851 9,227 89,748 322,446 Net changes in future development costs (31,438 ) (55,333 ) 254,043 448,089 Revisions of previous quantities (27,060 ) 99,591 14,414 (344,775 ) Accretion of discount 46,072 13,195 58,956 297,517 Change in production rates and other (40,190 ) (21,707 ) (72,386 ) (265,507 ) End of year $ 767,671 $ 691,089 $ 395,841 $ 589,554 |