Supplementary Information of Oil and Gas Operations—Unaudited | Supplementary Information on Oil and Gas Operations—Unaudited The following tables disclose certain financial data relative to the Company’s oil and gas producing activities, which are located onshore and offshore in the continental United States: Costs Incurred in Oil and Gas Property Acquisition, Exploration and Development Activities ( amounts in thousands ) For the Year-Ended December 31, 2018 2017 2016 Acquisition costs: Proved $ 241 $ 1,330 $ 3,346 Unproved (1) 6,190 12,762 2,197 Divestiture of proved leasehold (2,604 ) (4,795 ) (7,000 ) Exploration costs: Proved (51 ) 9,466 715 Unproved 233 (287 ) 603 Development costs (2) (18,928 ) 32,622 1,522 Capitalized general and administrative and interest costs 8,070 8,269 7,558 Total costs incurred $ (6,849 ) $ 59,367 $ 8,941 For the Year-Ended December 31, 2018 2017 2016 Accumulated depreciation, depletion and amortization (DD&A) Balance, beginning of year $ (1,285,660 ) $ (1,243,286 ) $ (1,157,455 ) Provision for DD&A (22,410 ) (31,667 ) (27,962 ) Ceiling test writedown — — (40,304 ) Sale of proved properties and other (3) 6,478 (10,707 ) (17,565 ) Balance, end of year $ (1,301,592 ) $ (1,285,660 ) $ (1,243,286 ) DD&A per Mcfe $ 1.05 $ 1.15 $ 1.19 (1) During 2017 , the Company acquired approximately 24,600 gross acres for approximately $9.3 million in cash and 2.0 million shares of common stock. In total for 2017 and 2018, the Company has invested approximately $15.0 million in leasing costs and geological and engineering data. (2) During 2018 , the Company sold its Gulf of Mexico properties and removed approximately $28.2 million of future discounted asset retirement obligations, which was recorded as a reduction in the capitalized costs of oil and gas properties. (3) During 2018 , the Company sold its Gulf of Mexico properties, receiving no cash consideration and funding amounts related to the future abandonment costs for the properties and purchase price adjustments. During 2017 , the Company sold its East Lake Verret assets for net proceeds of approximately $2.2 million and its East Texas saltwater disposal assets for net proceeds of $8.5 million . During 2016 , the Company sold its remaining Oklahoma producing assets for net proceeds of $17.6 million . At December 31, 2018 and 2017 , unevaluated oil and gas properties totaled $23.5 million and $21.9 million , respectively, and were not subject to depletion. Unevaluated costs at December 31, 2018 included $0.9 million of costs related to wells in progress at year-end. At December 31, 2017 , unevaluated costs included $0.7 million related to two facilities in progress at year-end, which were transferred to evaluated oil and gas properties during 2018 . The Company capitalized $1.8 million , $1.6 million and $0.9 million of interest during 2018 , 2017 and 2016 , respectively. Of the total unevaluated oil and gas property costs of $23.5 million at December 31, 2018 , $7.4 million , or 32% , was incurred in 2018 , $13.9 million , or 59% , was incurred in 2017 and $2.2 million , or 9% , was incurred in prior years. In connection with the sale of the Company's Gulf of Mexico assets, approximately $5.5 million , or 25% of the total unevaluated balance at December 31, 2017 , was transferred to evaluated oil and gas properties in 2018. Of the remaining unevaluated balance at December 31, 2018 , the Company expects the majority of the costs will be evaluated within the next three years, including $2.7 million expected to be evaluated during 2019 . Oil and Gas Reserve Information The Company’s net proved oil and gas reserves at December 31, 2018 have been estimated by independent petroleum engineers in accordance with guidelines established by the SEC using a historical 12-month, first of month, average pricing assumption. The estimates of proved oil and gas reserves constitute those quantities of oil, gas,and natural gas liquids, which, 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. However, there are numerous uncertainties inherent in estimating quantities of proved reserves and in providing the future rates of production and timing of development expenditures. The following reserve data represents estimates only and should not be construed as being exact. In addition, the present values should not be construed as the current market value of the Company’s oil and gas properties or the cost that would be incurred to obtain equivalent reserves. The following table sets forth an analysis of the Company’s estimated quantities of net proved and proved developed oil (including condensate), gas and natural gas liquid reserves, all located onshore and offshore in the continental United States: Oil NGL Natural Gas Total Proved reserves as of December 31, 2015 1,806 34,826 132,344 178,004 Revisions of previous estimates 247 (4,380 ) (11,854 ) (14,748 ) Extensions, discoveries and other additions — — 1,485 1,485 Sale of reserves in place (154 ) — (24,834 ) (25,759 ) Production (502 ) (3,871 ) (16,617 ) (23,501 ) Proved reserves as of December 31, 2016 1,397 26,575 80,524 115,481 Revisions of previous estimates 308 (7,269 ) 381 (5,040 ) Extensions, discoveries and other additions 777 4,565 64,704 73,931 Purchase of producing properties 48 — 473 761 Sale of reserves in place (90 ) — (1,033 ) (1,573 ) Production (592 ) (4,450 ) (19,611 ) (27,613 ) Proved reserves as of December 31, 2017 1,848 19,421 125,438 155,947 Revisions of previous estimates 130 (1,469 ) 2,737 2,044 Extensions, discoveries and other additions 41 2,929 7,947 11,121 Sale of reserves in place (507 ) (486 ) (13,945 ) (17,472 ) Production (326 ) (3,373 ) (16,013 ) (21,335 ) Proved reserves as of December 31, 2018 1,186 17,022 106,164 130,305 Proved developed reserves As of December 31, 2016 1,212 13,073 47,349 67,694 As of December 31, 2017 1,078 12,564 57,409 76,441 As of December 31, 2018 567 10,220 47,516 61,143 Proved undeveloped reserves As of December 31, 2016 185 13,502 33,175 47,787 As of December 31, 2017 770 6,857 68,029 79,506 As of December 31, 2018 619 6,802 58,648 69,162 Year Ended December 31, 2018 During 2018 , the Company’s estimated proved reserves decrease d by 16% . The decrease in reserves was the result of 10.1 Bcfe removed as a result of the sale of our Gulf of Mexico assets in January 2018 and 7.3 Bcfe removed due to the selldown of certain of our PUDs in East Texas. Partially offsetting these decreases was an increase of 11.1 Bcfe of PUD reserves from third party drilling as well as the Company's leasing efforts in East Texas. Overall, the Company had a 100% drilling success rate on two wells completed during 2018 . Year Ended December 31, 2017 During 2017 , the Company’s estimated proved reserves increase d by 35% . The increase in reserves was the result of 73.9 Bcfe added due to the Company's drilling program in East Texas where it drilled eight gross wells during 2017 . In response to low ethane prices, during 2017 the Company elected to bypass ethane processing on a portion of its East Texas production. As a result, the Company reduced its estimated proved ngl reserves to reflect the assumption that ethane would continue to not be recovered as natural gas liquids. Overall, the Company had a 100% drilling success rate during 2017 . Year Ended December 31, 2016 During 2016 , the Company's estimated proved reserves decrease d by 35% primarily due to the divestiture of the Company's remaining Oklahoma assets and significant reductions in capital spending during 2016 . Extensions, discoveries and other additions of 1.5 Bcfe were primarily due to the successful completion of the Company's final Oklahoma wells. Revisions of previous estimates included the reclassification of certain PUD reserves to probable reserves as a result of the Company's assessment of the timing of development. Overall, the Company had a 100% drilling success rate during 2016 on 5 gross wells drilled. The following tables (amounts in thousands) present the standardized measure of future net cash flows related to proved oil and gas reserves together with changes therein, as defined by ASC Topic 932. Future production and development costs are based on current costs with no escalations. Estimated future cash flows have been discounted to their present values based on a 10% annual discount rate. Standardized Measure December 31, 2018 2017 2016 Future cash flows $ 482,766 $ 539,244 $ 299,035 Future production costs (171,999 ) (184,171 ) (117,283 ) Future development costs (73,258 ) (128,447 ) (83,720 ) Future income taxes — — — Future net cash flows 237,509 226,626 98,032 10% annual discount (113,484 ) (99,329 ) (30,763 ) Standardized measure of discounted future net cash flows $ 124,025 $ 127,297 $ 67,269 Changes in Standardized Measure Year Ended December 31, 2018 2017 2016 Standardized measure at beginning of year $ 127,297 $ 67,269 $ 127,685 Sales and transfers of oil and gas produced, net of production costs (64,148 ) (70,362 ) (35,993 ) Changes in price, net of future production costs 18,542 53,516 (30,427 ) Extensions and discoveries, net of future production and development costs 2,983 50,977 864 Changes in estimated future development costs, net of development costs incurred during this period 16,241 17,144 26,356 Revisions of quantity estimates 2,755 (7,482 ) (14,889 ) Accretion of discount 12,730 6,727 12,769 Purchase of reserves in place — 549 — Sale of reserves in place 1,614 (1,305 ) (16,701 ) Changes in production rates (timing) and other 6,011 10,264 (2,395 ) Net increase (decrease) in standardized measure (3,272 ) 60,028 (60,416 ) Standardized measure at end of year $ 124,025 $ 127,297 $ 67,269 The historical twelve-month, first day of the month, average prices of oil, gas and natural gas liquids used in determining standardized measure were: 2018 2017 2016 Oil, $/Bbl $68.71 $52.49 $40.85 Ngls, $/Mcfe 4.08 3.23 2.40 Natural Gas, $/Mcf 3.13 3.03 1.82 |