The Company’s oil and natural gas reserves are attributable solely to properties within the United States, which constitutes one cost center.

Costs Incurred for Oil and Natural Gas Producing Activities

The following table sets forth the costs incurred in the Company’s oil and natural gas acquisition, exploration and development activities and includes costs whether capitalized or expensed as well as revisions and additions to the estimated future asset retirement obligations:



	December 31,
	2019		2018
	(In thousands)
Acquisition costs:
Unproved properties	$	1,644	$	93,926
Proved properties	—		22,356
Exploration costs	40,284		89,351
Development costs	51,198		78,103
Total	$	93,126	$	283,736

Results of Operations for Oil and Natural Gas Producing Activities

The following table sets forth the results of operations for oil and natural gas producing activities:



	December 31,
	2019			2018
	(In thousands)
Revenues	$	66,063		$	70,216
Production costs	(16,127		)	(13,843		)
Production taxes	(3,302		)	(3,709		)
Accretion of asset retirement obligation	(433		)	(85		)
Depletion, depreciation and amortization	(33,071		)	(25,159		)
Full cost ceiling impairment	(228,324		)	—
Total	$	(215,194	)	$	27,420

Reserves Quantity Information

The following table provides a roll forward of the total proved reserves for the years ended December 31, 2019 and 2018, as well as proved developed and proved undeveloped reserves at the beginning and end of each respective year:



	Crude Oil (Bbls)		Natural Gas (Mcf)		NGLs (Bbls)
January 1, 2018	7,171,339		16,059,926		1,604,570
Extensions and discoveries	15,881,727		38,957,588		4,565,994
Purchase of reserves	1,883,047		8,897,115		682,964
Revisions of previous estimates	(2,641,353	)	17,690,723		1,769,448
Production	(1,089,724	)	(2,855,739	)	(246,425	)
December 31, 2018	21,205,036		78,749,613		8,376,551
Extensions and discoveries	856,838		2,477,061		190,203
Revisions of previous estimates	(15,596,115	)	(48,718,235	)	(6,067,700	)
Production	(1,130,855	)	(3,063,927	)	(220,832	)
December 31, 2019	5,334,904		29,444,512		2,278,222

Proved Developed Reserves, included above:
Balance, January 1, 2018	2,531,397		6,594,446		644,102
Balance, December 31, 2018	6,278,036		27,046,195		2,653,908
Balance, December 31, 2019	5,334,904		29,444,512		2,278,222
Proved Undeveloped Reserves, included above:
Balance, January 1, 2018	4,639,942		9,465,480		960,468
Balance, December 31, 2018	14,927,000		51,703,418		5,722,643
Balance, December 31, 2019	—		—		—

Extensions and discoveries of 1.5 MBOE during the year ended December 31, 2019, resulted from the drilling of exploratory wells during the year that are included in proved reserves and productive wells as of December 31, 2019.

Revisions of previous reserves estimates decreased 2019 proved reserves by 29.8 MBOE. Reserves decreased by approximately 8.3 MBOE as a result of lower SEC pricing and costs for 2019 compared to 2018, as well as operational factors. The remaining revisions of 21.5 MBOE were the result of reclassification of all PUD reserves to unproved because of the uncertainty regarding the availability of capital to us for development these reserves as of December 31, 2019.

Standardized Measure of Discounted Future Net Cash Flows

The standardized measure of discounted future net cash flows does not purport to be, nor should it be interpreted to present, the fair value of the oil and natural gas reserves of the properties. An estimate of fair value would take into account, among other things, the recovery of reserves not presently classified as proved, the value of unproved properties and consideration of expected future economic and operating conditions.

The estimates of future cash flows and future production and development costs as of December 31, 2019 and 2018 are based on the unweighted arithmetic average first-day-of-the-month price for the preceding 12-month period. Estimated future production of proved reserves and estimated future production and development costs of proved reserves are based on current costs and economic conditions which are held constant throughout the life of the properties. All wellhead prices are held flat over the forecast period for all reserves categories. The estimated future net cash flows are then discounted at a rate of 10%.

The standardized measure of discounted future net cash flows relating to proved oil, natural gas and NGL reserves is as follows:



	December 31,
	2019			2018
	(In thousands)
Future cash inflows	$	358,127		$	1,500,263
Future production costs	(176,498		)	(414,117		)
Future development costs	(7,284		)	(346,225		)
Future income tax expense	—			(62,842		)
Future net cash flows	174,345			677,079
10% discount to reflect timing of cash flows	(54,171		)	(384,345		)
Total	$	120,174		$	292,734

In the foregoing determination of future cash inflows, sales prices used for oil, natural gas and NGLs for December 31, 2019 and 2018, were estimated using the average price during the 12-month period, determined as the unweighted arithmetic average of the first-day-of-the-month price for each month. Prices were adjusted by lease for quality, transportation fees and regional price differentials. Future costs of developing and producing the proved natural gas and oil reserves reported at the end of each year shown were based on costs determined at each such year-end, assuming the continuation of existing economic conditions.

At December 31, 2019, the tax basis of our oil and gas properties exceeded the pre-tax cash inflows; therefore, in the preparation of the Standardized Measure no future taxable income is expected to be generated from our oil and natural gas properties, primarily due to the reclassification of all PUD reserves to unproved because of the uncertainty regarding the availability of capital for developing those reserves.

The Company cautions that the disclosures shown are based on estimates of proved reserves quantities and future production schedules which are inherently imprecise and subject to revision and the 10% discount rate is arbitrary. In addition, costs and prices as of the measurement date are used in the determinations and no value may be assigned to probable or possible reserves.

Changes in the standardized measure of discounted future net cash flows relating to proved oil, natural gas and NGL reserves are as follows:



	Year Ended December 31,
	2019			2018
	(In thousands)
Balance at beginning of period	$	292,734		$	68,812
Net changes in prices and production costs (1)	(275,539		)	24,261
Sales of oil and natural gas produced during the year, net	(42,442		)	(49,271		)
Changes in estimated future development costs (2)	272,579			(39,938		)
Net change due to extensions and discoveries	18,044			161,785
Net change due to purchases of minerals in place	—			55,278
Previously estimated development costs incurred during the year	36,298			68,349
Net changes due to revision of previous quantity estimates (3)	(255,125		)	28,350
Accretion of discount	29,273			6,881
Other - unspecified (4)	9,327			3,252
Net change in income taxes	35,025			(35,025		)
Balance at end of period	$	120,174		$	292,734

(1) Net changes from prices and production costs were primarily the result of a 19% decrease in oil and natural gas prices and 45% increase in production costs from December 31, 2018 to December 31, 2019.

(2) Future development costs decreased $272.6 million from December 31, 2018 to December 31, 2019. Our December 31, 2019 proved reserves report reflects the reclassification of all PUD reserves to unproved because of the uncertainty regarding the availability of capital for developing those reserves. Our December 31, 2018 proved reserves report included future development costs of $329.5 million associated with PUD reserves not included in our December 31, 2019 proved reserves report.

(3) Negative revisions for 2019 are primarily the result of the reclassification of proved undeveloped reserves to unproved as reflected in our December 31, 2019 reserves report.

(4) Other changes are the result of significant changes to our proved reserves from December 31, 2018 to December 31, 2019 and include significant estimates of the effects of changes in the economic lives of producing wells and reclassification of proved undeveloped reserves to unproved as reflected in our December 31, 2019 reserves report.