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. December 31, December 31, 2019 2018 (In thousands) Evaluated oil and natural gas properties $ 797,005 $ 598,331 Support equipment and facilities 140,023 108,760 Accumulated depletion, depreciation, and amortization (136,747 ) (82,389 ) Total $ 800,281 $ 624,702 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 For the For the May 5, 2017 Period from Year Ended Year Ended through January 1, December 31, December 31, December 31, 2017 through 2019 2018 2017 May 4, 2017 (In thousands) (In thousands) Property acquisition costs, proved $ 150,871 $ — $ — $ — Property acquisition costs, unproved 7,674 — — — Exploration — — — — Development 71,460 42,878 51,925 9,573 Total $ 230,005 $ 42,878 $ 51,925 $ 9,573 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 Cawley, Gillespie and Associates (“CG&A”) to prepare our reserves estimates for all of our estimated proved reserves (by volume) at December 31, 2019. 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: 2019 2018 2017 Oil ($/Bbl): WTI (1) $ 55.69 $ 65.56 $ 51.34 NGL ($/Bbl): WTI (1) $ 55.69 $ 65.56 $ 51.34 Natural Gas ($/MMbtu): Henry Hub (2) $ 2.58 $ 3.10 $ 2.98 (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 Year Ended December 31, 2019 Oil Gas NGLs Total (MBbls) (MMcf) (MBbls) (MBoe) Proved developed and undeveloped reserves: Beginning of year 69,624 293,959 21,572 140,189 Extensions and discoveries 301 576 44 441 Purchase of minerals in place 17,429 202,409 18,533 69,697 Production (3,498 ) (26,489 ) (1,343 ) (9,256 ) Revision of previous estimates (13,084 ) (92,586 ) (9,554 ) (38,069 ) End of year 70,772 377,869 29,252 163,002 Proved developed reserves: Beginning of year 54,147 232,110 17,324 110,156 End of year 53,476 320,731 23,646 130,577 Proved undeveloped reserves: Beginning of year 15,477 61,849 4,248 30,033 End of year 17,296 57,138 5,606 32,425 For the Year Ended December 31, 2018 (Successor) Oil Gas NGLs Total (MBbls) (MMcf) (MBbls) (MBoe) Proved developed and undeveloped reserves: Beginning of period 72,004 406,558 25,189 164,953 Extensions and discoveries 1,207 2,910 231 1,923 Production (3,335 ) (29,176 ) (1,496 ) (9,694 ) Sale of minerals in place (159 ) (56,328 ) (1,469 ) (11,016 ) Revision of previous estimates (93 ) (30,005 ) (883 ) (5,977 ) End of period 69,624 293,959 21,572 140,189 Proved developed reserves: Beginning of period 50,014 299,481 17,982 117,910 End of period 54,147 232,110 17,324 110,156 Proved undeveloped reserves: Beginning of period 21,990 107,077 7,207 47,043 End of period 15,477 61,849 4,248 30,033 For the period from May 5, 2017 through December 31, 2017 (Successor) Oil Gas NGLs Total (MBbls) (MMcf) (MBbls) (MBoe) Proved developed and undeveloped reserves: Beginning of period 80,960 419,472 30,572 181,444 Extensions and discoveries 121 4,900 261 1,199 Production (2,380 ) (21,885 ) (1,114 ) (7,142 ) Revision of previous estimates (6,697 ) 4,071 (4,530 ) (10,548 ) End of period 72,004 406,558 25,189 164,953 Proved developed reserves: Beginning of period 57,803 297,101 21,963 129,283 End of period 50,014 299,481 17,982 117,910 Proved undeveloped reserves: Beginning of period 23,157 122,371 8,609 52,161 End of period 21,990 107,077 7,207 47,043 For the period from January 1, 2017 through May 4, 2017 (Predecessor) Oil Gas NGLs Total (MBbls) (MMcf) (MBbls) (MBoe) Proved developed and undeveloped reserves: Beginning of year 65,741 371,016 25,184 152,761 Extensions and discoveries 53 45 8 69 Production (1,204 ) (12,411 ) (616 ) (3,890 ) Revision of previous estimates 16,370 60,822 5,996 32,504 End of year 80,960 419,472 30,572 181,444 Proved developed reserves: Beginning of year 45,536 280,035 18,923 111,132 End of year 57,803 297,101 21,963 129,283 Proved undeveloped reserves: Beginning of year 20,205 90,981 6,261 41,630 End of year 23,157 122,371 8,609 52,161 Noteworthy amounts included in the categories of proved reserve changes in the above tables include: • The 22.8 MMBoe increase in reserves for the year ended December 31, 2019 is primarily due to the Merger in which we acquired 69.7 MMBoe partially offset by downward pricing revision of a 25.9 MMBoe and a downward revision of 12.1 MMBoe due to updated well performance data and future anticipated maintenance cost increases. • The 24.7 MMBoe reduction in reserves for the year ended December 31, 2018 is primarily due to a 4.6 MMBoe upward pricing revision and a 10.6 MMBoe downward revision due to updated well performance data and future anticipated development and maintenance cost increases. We divested 11.0 MMBoe during the year ended December 31, 2018. We added 1.9 MMBoe during the year ended December 31, 2018 due to extensions and discoveries. • The 16.5 MMBoe reduction in reserves for the period from May 5, 2017 through December 31, 2017 is primarily due to a 2.2 MMBoe upward pricing revision and a 12.8 MMBoe downward revision due to updated well performance data and future anticipated development and maintenance cost increases. We added 1.2 MMBoe during the period from May 5, 2017 through December 31, 2017 due to extensions and discoveries. • The 28.7 MMBoe increase in reserves for the January 1, 2017 through May 4, 2017 is primarily due to a 34.1 MMBoe upward pricing revision and a 1.5 MMBoe 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. See Note 6 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 For the For the May 5, 2017 Period from Year Ended Year Ended through January 1, December 31, December 31, December 31, 2017 through 2019 2018 2017 May 4, 2017 (In thousands) (In thousands) Future cash inflows $ 5,146,288 $ 6,000,268 $ 5,149,623 $ 5,246,487 Future production costs (2,917,262 ) (3,280,778 ) (2,982,035 ) (3,275,952 ) Future development costs (567,423 ) (474,413 ) (530,133 ) (492,610 ) Future income tax expense — — — — Future net cash flows for estimated timing of cash flows 1,661,603 2,245,077 1,637,455 1,477,925 10% annual discount for estimated timing of cash flows (745,042 ) (1,132,048 ) (869,784 ) (786,836 ) Standardized measure of discounted future net cash flows $ 916,561 $ 1,113,029 $ 767,671 $ 691,089 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, 2019: Successor Predecessor Period from For the For the May 5, 2017 Period from Year Ended Year Ended through January 1, December 31, December 31, December 31, 2017 through 2019 2018 2017 May 4, 2017 (In thousands) (In thousands) Beginning of year $ 1,113,029 $ 767,671 $ 691,089 $ 395,841 Sale of oil and natural gas produced, net of production costs (113,545 ) (181,841 ) (100,946 ) (57,420 ) Purchase of minerals in place 408,370 — — — Sale of minerals in place — (29,036 ) — — Extensions and discoveries 5,334 27,157 7,187 1,320 Changes in prices and costs (623,592 ) 507,888 161,106 306,375 Previously estimated development costs incurred 84,341 73,761 61,851 9,227 Net changes in future development costs 110,892 24,396 (31,438 ) (55,333 ) Revisions of previous quantities (183,300 ) (86,812 ) (27,060 ) 99,591 Accretion of discount 92,998 51,769 46,072 13,195 Change in production rates and other 22,034 (41,924 ) (40,190 ) (21,707 ) End of year $ 916,561 $ 1,113,029 $ 767,671 $ 691,089 |