Supplemental Oil and Natural Gas Disclosure - Unaudited | Geographic Area of Operation All the Partnership’s proved reserves are located within the continental U.S., with the majority concentrated in Texas, Louisiana, and North Dakota. However, the Partnership also owns mineral and royalty interests and non-operated working interests in various producing and non-producing oil and natural gas properties in several other areas throughout the U.S. Therefore, the following disclosures about the Partnership’s costs incurred and proved reserves are presented on a consolidated basis. Costs Incurred in Oil and Natural Gas Property Acquisitions, Exploration, and Development Activities Costs incurred in oil and natural gas property acquisition, exploration and development, whether capitalized or expensed, are presented below: Year Ended December 31, 2019 2018 2017 (in thousands) Acquisition Costs of Properties 1 : Proved $ 2,288 $ 13,438 $ 96,596 Unproved 41,643 136,079 383,535 Exploration Costs 3 13,544 618 Development Costs 1 34,617 165,198 81,056 Total $ 78,551 $ 328,259 $ 561,805 1 See Note 4 – Oil and Natural Gas Properties for further discussion. Unproved properties include purchases of leasehold prospects. Development costs include costs incurred on farmout wells subject to reimbursement under the Partnership's farmout agreements. Property acquisition costs include costs incurred to purchase, lease, or otherwise acquire a property. Development costs include costs incurred to gain access to and prepare development well locations for drilling, to drill and equip development wells, and to provide facilities to extract, treat, and gather natural gas. Refer below for total capitalized costs and associated accumulated DD&A and impairment. Oil and Natural Gas Capitalized Costs Aggregate capitalized costs related to oil and natural gas production activities with applicable accumulated depreciation, depletion, and amortization, including impairments, are presented below: As of December 31, 2019 2018 (in thousands) Proved properties 1 $ 2,228,893 $ 2,377,305 Unproved properties 1,073,447 1,063,883 Total 3,302,340 3,441,188 Accumulated depreciation, depletion, amortization, and impairment (1,870,412) (1,865,692) Oil and natural gas properties, net $ 1,431,928 $ 1,575,496 1 Proved properties include capitalized costs related to farmout wells not yet assigned. Oil and Natural Gas Reserve Information The following table sets forth estimated net quantities of the Partnership’s proved, proved developed, and proved undeveloped oil and natural gas reserves. These reserve estimates exclude insignificant natural gas liquid quantities owned by the Partnership. Estimated reserves for the periods presented are based on the unweighted average of first-day-of-the-month commodity prices over the period January through December for the year in accordance with definitions and guidelines set forth by the SEC and the FASB. Crude Oil (MBbl) Natural Gas (MMcf) Total (MBoe) Net proved reserves at December 31, 2016 18,368 270,339 63,425 Revisions of previous estimates 1 (2,298) 14,505 120 Purchases of minerals in place 2 2,335 31,323 7,555 Extensions, discoveries and other additions 3 3,046 43,886 10,360 Production (3,552) (59,779) (13,515) Net proved reserves at December 31, 2017 17,899 300,274 67,945 Revisions of previous estimates 1 (35) (11,027) (1,873) Purchases of minerals in place 4 227 419 297 Extensions, discoveries and other additions 3 4,438 95,976 20,434 Production (4,962) (71,622) (16,899) Net proved reserves at December 31, 2018 17,567 314,020 69,904 Revisions of previous estimates 1 951 19,136 4,140 Purchases of minerals in place 4 46 279 92 Extensions, discoveries and other additions 3 3,263 53,158 12,123 Production (4,777) (77,635) (17,716) Net proved reserves at December 31, 2019 17,050 308,958 68,543 Net Proved Developed Reserves 5 December 31, 2017 17,891 233,017 56,727 December 31, 2018 17,567 278,233 63,939 December 31, 2019 17,050 263,371 60,945 Net Proved Undeveloped Reserves 6 December 31, 2017 8 67,257 11,218 December 31, 2018 — 35,787 5,965 December 31, 2019 — 45,587 7,598 1 Revisions of previous estimates include technical revisions due to changes in commodity prices, historical and projected performance and other factors. The most notable technical revisions are related to well performance in certain Haynesville/ Bossier wells. 2 Includes the acquisition of mineral and royalty reserves primarily in East Texas, the Permian Basin, and the Williston Basin. 3 Includes extensions and additions related to drilling activities within multiple basins. 4 Includes the acquisition of mineral and royalty reserves primarily in East Texas and the Permian Basin. 5 As of December 31, 2018 and 2019, no proved developed reserves were attributable to noncontrolling interests in the Partnership's consolidated subsidiaries. As of December 31, 2017, proved developed reserves of 61 MBoe were attributable to noncontrolling interests. 6 As of December 31, 2018, 2017, and 2016, no proved undeveloped reserves were attributable to noncontrolling interests. Standardized Measure of Discounted Future Net Cash Flows Future cash inflows represent expected revenues from production of period-end quantities of proved reserves based on the 12-month unweighted average of first-day-of-the-month commodity prices for the periods presented. All prices are adjusted by field for quality, transportation fees, energy content and regional price differentials. Future cash inflows are computed by applying applicable prices relating to the Partnership’s proved reserves to the year-end quantities of those reserves. Future production, development, site restoration and abandonment costs are derived based on current costs assuming continuation of existing economic conditions. There are no future income tax expenses deducted from future production revenues in the calculation of the standardized measure because the Partnership is not subject to federal income taxes. The Partnership is subject to certain state based taxes; however, these amounts are not material. See Note 2 – Summary of Significant Accounting Policies for further discussion. Year Ended December 31, 2019 2018 2017 (in thousands) Future cash inflows $ 1,619,147 $ 2,038,508 $ 1,643,582 Future production costs (177,550) (222,342) (211,064) Future development costs (54,132) (58,403) (70,111) Future income tax expense (5,244) (6,333) (2,655) Future net cash flows (undiscounted) 1,382,221 1,751,430 1,359,752 Annual discount 10% for estimated timing (534,327) (663,814) (497,103) Total 1 $ 847,894 $ 1,087,616 $ 862,649 1 Includes standardized measure of discounted future net cash flows of approximately $0.5 million for December 31, 2017 attributable to noncontrolling interests in the Partnership’s consolidated subsidiaries. The following summarizes the principal sources of change in the standardized measure of discounted future net cash flows: Year Ended December 31, 2019 2018 2017 (in thousands) Standardized measure, beginning of year $ 1,087,616 $ 862,649 $ 603,015 Sales, net of production costs (384,745) (475,742) (295,941) Net changes in prices and production costs related to future production (229,651) 275,091 161,221 Extensions, discoveries and improved recovery, net of future production and development costs 186,424 370,695 166,616 Previously estimated development costs incurred during the period — 14,509 11,118 Revisions of estimated future development costs 1,198 (558) 2,653 Revisions of previous quantity estimates, net of related costs 51,405 (5,401) 60,476 Accretion of discount 109,158 86,441 60,512 Purchases of reserves in place, less related costs 1,730 8,975 113,342 Changes in timing and other 24,759 (49,043) (20,363) Net increase (decrease) in standardized measures (239,722) 224,967 259,634 Standardized measure, end of year $ 847,894 $ 1,087,616 $ 862,649 The data presented should not be viewed as representing the expected cash flow from, or current value of, existing proved reserves since the computations are based on a significant amount of estimates and assumptions. The required projection of production and related expenditures over time requires further estimates with respect to pipeline availability, rates of demand and governmental control. Actual future prices and costs are likely to be substantially different from historical prices and costs utilized in the computation of reported amounts. Any analysis or evaluation of the reported amounts should give specific recognition to the computational methods utilized and the limitations inherent therein. |