NOTE 23. STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS RELATING TO PROVED OIL, NATURAL GAS AND NATURAL GAS LIQUIDS RESERVES (UNAUDITED)

The following tables present a standardized measure of discounted future net cash flows and changes therein relating to estimated proved oil, natural gas and natural gas liquids reserves. In computing this data, assumptions other than those required by the SEC could produce different results. Accordingly, the data should not be construed as representative of the fair market value of the Company’s estimated proved oil, natural gas and natural gas liquids reserves. The following assumptions have been made:

Future cash inflows were based on prices used in estimating the Company’s proved oil, natural gas and natural gas liquids reserves. Future price changes were included only to the extent provided by existing contractual agreements.

Future development and production costs were computed using year end costs assuming no change in present economic conditions.

Future net cash flows were discounted at an annual rate of 10%.

The standardized measure of discounted future net cash flows relating to estimated proved oil, natural gas and natural gas liquids reserves is presented below for the years ended December 31 (in thousands):


	2019		2018		2017
Future cash inflows	$	613,120	$	2,710,234	$	2,778,662
Future production and development costs		(387,175)		(1,622,040)		(1,603,373)
Future income tax expenses		(9,266)		(167,692)		(6,022)
Future net cash flows		216,679		920,502		1,169,267
10% annual discount for estimated timing of cash flows		(109,743)		(484,069)		(589,862)
Standardized measure of discounted future net cash flows	$	106,936	$	436,433	$	579,405

As specified by the SEC, the prices for oil, natural gas and natural gas liquids used in this calculation were the average prices during the year determined using the price on the first day of each month, except for volumes subject to fixed price contracts. The prices utilized in calculating the Company’s total estimated proved reserves at December 31, 2019, 2018 and 2017 were $55.69 per Bbl of oil and $2.578 per MMBtu of natural gas, $65.56 per Bbl of oil and $3.10 per MMBtu of natural gas, and $51.34 per Bbl of oil and $2.976 per MMBtu of natural gas, respectively. The Company does not include its commodity derivatives in the determination of its oil, natural gas and natural gas liquids reserves.

The principal sources of changes in the standardized measure of future net cash flows are as follows for the years ended December 31 (in thousands):


	2019		2018		2017
Standardized measure at beginning of period	$	436,433	$	579,405	$	371,117
Sales and transfers of oil, natural gas and natural gas liquids
produced, net of production costs		(28,428)		(126,181)		(111,118)
Net changes in prices and production costs		(125,166)		48,322		202,810
Extensions, discoveries and improved recovery, less related costs		46		3,148		5,451
Development costs incurred during the period		—		16		2,261
Revisions and other		(54,980)		88,587		13,516
Accretion of 10% timing discount		50,963		58,222		37,356
Changes in income taxes		69,678		(70,390)		(371)
Changes in estimated future development costs		(5,502)		3,174		20,177
Changes in timing and other		(6,185)		21,551		8,302
Purchase of minerals in place		—		—		32,949
Sales of minerals in place		(229,923)		(169,421)		(3,045)
Standardized measure of discounted future net cash flows	$	106,936	$	436,433	$	579,405