Oil and Natural Gas Properties and Other Property and Equipment

9 Months Ended

Mar. 31, 2015

Oil and Gas Property [Abstract]

Oil and Natural Gas Properties and Other Property and Equipment

3. Oil and Natural Gas Properties and Other Property and Equipment

Oil and Natural Gas Properties

The following table sets forth the capitalized costs under the successful efforts method for oil and natural gas properties:

(in thousands)	March 31, 2015			June 30, 2014
Oil and natural gas properties:
Proved	$	49,621		$	82,362
Unproved		10,398			19,109
Total oil and natural gas properties		60,019			101,471
Less accumulated depletion and impairment		(29,854	)		(19,138	)
Net oil and natural gas properties capitalized costs	$	30,165		$	82,333

During the three and nine months ended March 31, 2015 and March 31, 2014, the Company did not incur any significant exploratory drilling costs. The Company had no transfers of exploratory well costs to proved properties during the three and nine months ended March 31, 2015 and March 31, 2014.

Capitalized costs related to proved oil and natural gas properties, including wells and related equipment and facilities, are evaluated for impairment based on the Company’s analysis of undiscounted future net cash flows. If undiscounted future net cash flows are insufficient to recover the net capitalized costs related to proved properties, then the Company recognizes an impairment charge in income equal to the difference between the carrying value and the estimated fair value of the properties. Estimated fair values are determined using discounted cash flow models. The discounted cash flow models include management’s estimates of future oil and natural gas production, operating and development costs and discount rates. The Company recorded an impairment of approximately $29.1 million during the nine months ended March 31, 2015.

Assets are classified as held for sale when the Company commits to a plan to sell the assets and there is reasonable certainty that the sale will take place within one year. Upon classification as held for sale, long-lived assets are no longer depreciated or depleted, and a measurement for impairment is performed to identify and expense any excess of carrying value over fair value less estimated costs to sell.

The accompanying balance sheets present $25 million of assets held for sale, net of accumulated depreciation, depletion, and amortization expense, which consists of our oil and gas properties sold on April 21, 2015.