4. Property and Equipment, Net

As of March 31, 2017 and December 31, 2016, total property and equipment, net consisted of the following:



	March 31, 2017			December 31, 2016
	(In thousands)
Oil and gas properties, full cost method
Proved properties		$4,817,044			$4,687,416
Accumulated depreciation, depletion and amortization and impairments	(3,445,709		)	(3,392,749		)
Proved properties, net	1,371,335			1,294,667
Unproved properties, not being amortized
Unevaluated leasehold and seismic costs	221,039			211,067
Capitalized interest	32,231			29,894
Total unproved properties, not being amortized	253,270			240,961
Other property and equipment	23,240			23,127
Accumulated depreciation	(13,641		)	(12,995		)
Other property and equipment, net	9,599			10,132
Total property and equipment, net		$1,634,204			$1,545,760

Average depreciation, depletion and amortization (“DD&A”) per Boe of proved properties was $12.69 and $15.22 for the three months ended March 31, 2017 and 2016, respectively.

The Company capitalized internal costs of employee compensation and benefits, including stock-based compensation, directly associated with acquisition, exploration and development activities totaling $5.4 million and $4.4 million for the three months ended March 31, 2017 and 2016, respectively.

Unproved properties, not being amortized, include unevaluated leasehold and seismic costs associated with specific unevaluated properties and related capitalized interest. The Company capitalized interest costs associated with its unproved properties totaling $3.8 million and $5.6 million for the three months ended March 31, 2017 and 2016, respectively.

Divestiture

During the first quarter of 2017, the Company sold a small acreage position in the Delaware Basin for net proceeds of $15.3 million. The proceeds from this sale were recognized as a reduction of proved oil and gas properties.

Impairment of Proved Oil and Gas Properties

At the end of each quarter, the net book value of oil and gas properties, less related deferred income taxes, are limited to the “cost center ceiling” equal to (i) the sum of (a) the present value of estimated future net revenues from proved oil and gas reserves, less estimated future expenditures to be incurred in developing and producing the proved reserves computed using a discount factor of 10%, (b) the costs of unproved properties not being amortized, and (c) the lower of cost or estimated fair value of unproved properties included in the costs being amortized; less (ii) related income tax effects. Any excess of the net book value of oil and gas properties, less related deferred income taxes, over the cost center ceiling is recognized as an impairment of proved oil and gas properties. An impairment recognized in one period may not be reversed in a subsequent period even if higher commodity prices in the future result in a cost center ceiling in excess of the net book value of oil and gas properties, less related deferred income taxes.

The estimated future net revenues used in the cost center ceiling are calculated using the average realized prices for sales of crude oil, NGLs, and natural gas on the first calendar day of each month during the 12-month period prior to the end of the current period (“12-Month Average Realized Price”), held flat for the life of the production, except where different prices are fixed and determinable from applicable contracts for the remaining term of those contracts. Prices do not include the impact of derivative instruments as the Company elected not to meet the criteria to qualify derivative instruments for hedge accounting treatment.

The Company did not recognize an impairment of proved oil and gas properties for the three months ended March 31, 2017. Primarily due to declines in the 12-Month Average Realized Price of crude oil from December 31, 2015 to March 31, 2016, the Company recognized an impairment of proved oil and gas properties for the three months ended March 31, 2016. Details of the 12-Month Average Realized Price of crude oil for the three months ended March 31, 2017 and 2016 and the impairment of proved oil and gas properties for the three months ended March 31, 2016 are summarized in the table below:



	Three Months Ended March 31,
	2017			2016
Impairment of proved oil and gas properties (in thousands)		$—		$274,413
Crude Oil 12-Month Average Realized Price ($/Bbl) - Beginning of period	$39.60			$47.24
Crude Oil 12-Month Average Realized Price ($/Bbl) - End of period	$44.98			$43.13
Percentage increase (decrease)	14		%	(9	%)