Commitments and Contingencies

12 Months Ended

Dec. 31, 2016

16. Commitments and Contingencies

Contractual Obligations

At December 31, 2016, contractual obligations for drilling contracts, long-term operating leases and other contracts are as follows (in thousands):

	Total		2017		2018		2019		2020		2021 and beyond
Drilling contracts	$	—	$	—	$	—	$	—	$	—	$	—
Non-cancellable office lease commitments		6,631		642		654		666		677		3,992

Net minimum commitments	$	6,631	$	642	$	654	$	666	$	677	$	3,992

For the Successor Period, the Predecessor Period and years ended December 31, 2015 and 2014, the Company expensed $0.1 million, $4.3 million, $2.3 million and $2.3 million, respectively, for office rent.

In addition to the commitments noted in the above table, the Company is party to a gas purchase, gathering and processing contract in the Mississippian Lime region, which includes certain minimum NGL volume commitments. To the extent we do not deliver natural gas volumes in sufficient quantities to generate, when processed, the minimum levels of recovered NGLs, we would be required to reimburse the counterparty an amount equal to the sum of the monthly shortfall, if any, multiplied by a fee. We are currently delivering at least the minimum volumes required under these contractual provisions. However, decreased drilling activity could result in the inability to meet these commitments in the future.

Commitments related to ARO's are not included in the table above. For additional information, please see "—Note 9. Asset Retirement Obligations" for further discussion.

Litigation

The Company is involved in various matters incidental to its operations and business that might give rise to a loss contingency. These matters may include legal and regulatory proceedings, commercial disputes, claims from royalty, working interest and surface owners, property damage and personal injury claims and environmental authorities or other matters. In addition, the Company may be subject to customary audits by governmental authorities regarding the payment and reporting of various taxes, governmental royalties and fees as well as compliance with unclaimed property (escheatment) requirements and other laws. Further, other parties with an interest in wells operated by the Company have the ability under various contractual agreements to perform audits of its joint interest billing practices.

The Company vigorously defends itself in these matters. If the Company determines that an unfavorable outcome or loss of a particular matter is probable and the amount of loss can be reasonably estimated, it accrues a liability for the contingent obligation. As new information becomes available or as a result of legal or administrative rulings in similar matters or a change in applicable law, the Company's conclusions regarding the probability of outcomes and the amount of estimated loss, if any, may change. The impact of subsequent changes to the Company's accruals could have a material effect on its results of operations. As of December 31, 2016 and 2015, the Company's total accrual for all loss contingencies was $1.1 million.