Supplemental Oil and Gas Disclosures (Unaudited)

12 Months Ended

Dec. 31, 2016

Supplemental Oil and Gas Disclosures (Unaudited)

Supplemental Oil and Gas Disclosures (Unaudited)

Note 19. Supplemental Oil and Gas Disclosures (Unaudited)

        The supplemental data presented herein reflects information for all of the Company's oil and natural gas producing activities.

Costs Incurred in Oil and Natural Gas Property Acquisition, Exploration and Development Activities

        The following table sets forth costs incurred related to the Company's oil and natural gas activities for the Successor Period, Predecessor Period and years ended December 31, 2015 and 2014 (in thousands):

	Successor		Predecessor
	For the Period October 21, 2016 through December 31, 2016		For the Period January 1, 2016 through October 20, 2016		For the Year Ended December 31,
					2015		2014
Acquisition costs:
Proved properties	$	—	$	—	$	—	$	—
Unproved properties		1,430		6,869		8,448		25,576
Exploration costs		—		—		—		672
Development costs		17,708		121,668		274,978		525,941
Total costs incurred	$	19,138	$	128,537	$	283,426	$	552,189

Capitalized Costs

        The following table sets forth the capitalized costs related to the Company's oil and natural gas producing activities as of December 31, 2016 and 2015 (in thousands):

	Successor			Predecessor
	December 31, 2016			December 31, 2015
Proved properties	$	573,150		$	3,666,403
Unproved properties not being amortized		65,080			—
Gross capitalized costs		638,230			3,666,403
Less: Accumulated depreciation, depletion, amortization and impairment		(12,587	)		(3,148,240	)
Net capitalized costs	$	625,643		$	518,163

        At December 31, 2016, the Company had $65.1 million of oil and gas property costs that are not being amortized, inclusive of $0.7 million of capitalized interest. The value of the Company's oil and gas properties not being amortized were determined as part of its application of fresh start accounting and are entirely associated with the Company's Mississippian Lime area. We expect the majority of these costs associated with the Company's Mississippian Lime area will be evaluated and either impaired or become subject to depletion within ten years.

Estimated Quantities of Proved Oil and Natural Gas Reserves

        The reserve estimates at December 31, 2016 and 2015 for the Mississippian Lime and Anadarko Basin areas and at December 31, 2014 for the Anadarko Basin area were based on reports prepared by Cawley, Gillespie & Associates, Inc., independent reserve engineers. The reserve estimates at December 31, 2014 for the Gulf Coast area and for the Mississippian Lime area were based on a report prepared by Netherland, Sewell and Associates, Inc., independent reserve engineers.

        The Company emphasizes that reserve estimates are inherently imprecise and that estimates of new discoveries and undeveloped locations are more imprecise than estimates of established proved producing oil and gas properties. Accordingly, these estimates are expected to change as future information becomes available. Proved oil and natural gas reserves are the estimated quantities of oil and natural gas which geological and engineering data demonstrate, with reasonable certainty, to be recoverable in future years from known reservoirs under economic and operating conditions (i.e., prices and costs) existing at the time the estimate is made. Proved developed oil and natural gas reserves are proved reserves that can be expected to be recovered through existing wells and equipment in place and under operating methods being utilized at the time the estimates were made.

        The following table sets forth the Company's net proved, proved developed and proved undeveloped reserves at December 31, 2016, 2015 and 2014:

	Oil (MBbl)			NGL (MBbl)			Gas (MMcf)			Total (MBoe)
2014 (Predecessor)
Proved Reserves
Beginning Balance		54,899			26,156			280,198			127,755
Revision of previous estimates		(11,563	)		(4,444	)		(41,510	)		(22,925	)
Extensions, discoveries and other additions		30,232			15,414			188,336			77,035
Sales of reserves in place		(10,182	)		(2,181	)		(24,166	)		(16,391	)
Purchases of reserves in place		—			—			—			—
Production		(5,144	)		(2,417	)		(25,013	)		(11,730	)
Net proved reserves at December 31, 2014		58,242			32,528			377,845			153,744
Proved developed reserves, December 31, 2014		27,181			16,443			179,972			73,620
Proved undeveloped reserves, December 31, 2014		31,061			16,085			197,873			80,124
2015 (Predecessor)
Proved Reserves
Beginning Balance		58,242			32,528			377,845			153,744
Revision of previous estimates		(30,490	)		(15,495	)		(178,287	)		(75,700	)
Extensions, discoveries and other additions		2,189			1,371			17,026			6,398
Sales of reserves in place		(2,871	)		(843	)		(7,834	)		(5,019	)
Purchases of reserves in place		2,437			1,157			15,145			6,118
Production		(4,794	)		(2,473	)		(28,403	)		(12,001	)
Net proved reserves at December 31, 2015		24,713			16,245			195,492			73,540
Proved developed reserves, December 31, 2015		23,006			15,376			184,365			69,110
Proved undeveloped reserves, December 31, 2015		1,707			869			11,127			4,430
2016 (Predecessor)
Proved Reserves
Beginning Balance		24,713			16,245			195,492			73,540
Revision of previous estimates		(3,089	)		(459	)		(946	)		(3,706	)
Extensions, discoveries and other additions		1,566			840			11,052			4,249
Sales of reserves in place		—			—			—			—
Purchases of reserves in place		—			—			—			—
Production		(2,964	)		(1,932	)		(23,215	)		(8,765	)
Net proved reserves at October 20, 2016		20,226			14,694			182,383			65,318
Proved developed reserves, October 20, 2016		20,226			14,694			182,383			65,318
Proved undeveloped reserves, October 20, 2016		—			—			—			—
2016 (Successor)
Proved Reserves
Beginning Balance		20,226			14,694			182,383			65,318
Revision of previous estimates		19,137			11,421			147,688			55,172
Extensions, discoveries and other additions		22,571			11,186			147,236			58,296
Sales of reserves in place		—			—			—			—
Purchases of reserves in place		—			—			—			—
Production		(544	)		(429	)		(4,948	)		(1,798	)
Net proved reserves at December 31, 2016		61,390			36,872			472,359			176,988
Proved developed reserves, December 31, 2016		19,698			16,349			201,454			69,622
Proved undeveloped reserves, December 31, 2016		41,692			20,523			270,905			107,366

Revision of Previous Estimates

        For the Successor Period, the Company had positive revisions of 55,172 MBoe associated with its proved undeveloped reserves. Upon the Company's emergence on the Effective Date, it undertook a process to review its five-year development schedule in light of improved commodity pricing and the significant improvement in the Company's liquidity and outstanding long-term debt. In developing the Company's updated five-year development schedule, the Company considered the forward pricing curve, the returns expected of its drilling program and cash available during this time period, which would include cash on hand, cash generated by operations and cash from borrowings. Based upon these factors, the Company developed an updated five-year development plan and booked proved undeveloped reserves based upon this expected development plan. Proved undeveloped reserves that were removed from proved category in prior years but subsequently reinstated after this review were classified as a revision in the above tables.

        For the year ended December 31, 2015, the Company had net negative revisions of 75,700 MBoe related to proved undeveloped reserves, of which approximately 98% related to reductions in the Mississippian Lime area due to the transfer of 77,362 MBoe of proved undeveloped reserves comprising $179.0 million of PV-10 value (at SEC pricing) to the probable reserves category due to uncertainty around financing the development of our proved undeveloped reserves within a five year period.

        For the year ended December 31, 2014, the Company had net negative revisions of 22,925 MBoe related to proved undeveloped reserves, of which 3,084 MBoe related to reductions in our Gulf Coast area, and 22,138 MBoe related to reductions in our Anadarko Basin area, partially offset by 2,297 MBoe in positive revisions in the Mississippian Lime area. These net negative revisions in the Gulf Coast were primarily due to our lack of future development plans in this area. The net negative revisions in the Anadarko Basin were primarily due to our current drilling plans, which did not allow for development of these proved undeveloped reserves within five years of their initial booking.

Extensions, Discoveries and Other Additions

        For the Successor Period, the Company had 58,296 MBoe of extensions and discoveries associated with its proved undeveloped reserves in the Mississippian Lime area. Upon the Company's emergence on the Effective Date, it undertook a process to review its five-year development schedule in light of improved commodity pricing and the significant improvement in the Company's liquidity and outstanding long-term debt. In developing the Company's updated five-year development schedule, the Company considered the forward pricing curve, the returns expected of its drilling program and cash available during this time period, which would include cash on hand, cash generated by operations and cash from borrowings. Based upon these factors, the Company developed an updated five-year development plan and booked proved undeveloped reserves based upon this expected development plan. Proved undeveloped reserves that were not included in any proved category in prior years but included in the Company's updated five-year development schedule were classified as an extension in the above tables.

        For the Predecessor Period and the years ended December 31, 2015 and 2014, the Company had 4,249 MBoe, 6,398 MBoe and 77,035 MBoe, respectively, of additions from extensions and discoveries, all of which related to the Mississippian Lime area.

Sales of Reserves in Place

        For the year ended December 31, 2015, the Company had 5,019 MBoe in sales of reserves in place, of which 2,307 MBoe of the sale related to the Dequincy Divestiture, which closed on April 21, 2015, and 2,712 MBoe resulted from the swap of leasehold interests in the Mississippian Lime area in the second quarter of 2015.

        For the year ended December 31, 2014, the Company had 16,391 MBoe in sales of reserves in place related to the Pine Prairie Disposition, which closed on May 1, 2014.

Purchases of Reserves in Place

        For the year ended December 31, 2015, the Company had 6,118 MBoe of additions from purchases of reserves in place resulting from a swap of leasehold interests in the Mississippian Lime area.

Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Natural Gas Reserves

        The standardized measure represents the present value of estimated future cash inflows from proved oil and natural gas reserves, less future development, production, plugging and abandonment costs and income tax expenses, discounted at 10% per annum to reflect timing of future cash flows. Production costs do not include depreciation, depletion and amortization of capitalized acquisition, exploration and development costs.

        Our estimated proved reserves and related future net revenues and standardized measure were determined using the unweighted arithmetic average first-of-the-month price for the preceding 12-month period, without giving effect to derivative transactions, and were held constant throughout the life of the properties. Estimated future production of proved reserves and estimated future production and development costs of proved reserves are based on current costs and economic conditions. The following table sets forth the benchmark prices used to determine our estimated proved reserves for the periods indicated:

	Successor		Predecessor
			At December 31,
	At December 31, 2016
			2015		2014
Oil and Natural Gas Prices:
Oil (per barrel)	$	42.75	$	50.28	$	94.99
NGL (per barrel)	$	15.29	$	17.44	$	39.17
Natural gas (per million British thermal units)	$	2.48	$	2.59	$	4.35

        The following table sets forth the standardized measure of discounted future net cash flows from projected production of the Company's oil and natural gas reserves at December 31, 2016, 2015, and 2014 (in thousands):

	Successor			Predecessor
				Year Ended December 31,
	At December 31, 2016
				2015			2014
Future cash inflows	$	4,186,389		$	1,902,184		$	8,405,916
Future production costs		(2,078,640	)		(1,024,314	)		(2,669,000	)
Future development costs		(692,533	)		(47,532	)		(751,353	)
Future income tax expense		(106,563	)		—			(1,113,908	)
Future net cash flows		1,308,653			830,338			3,871,655
10% annual discount for estimated timing of cash flows		(778,703	)		(317,519	)		(1,998,294	)
Standardized measure of discounted future net cash flows	$	529,950		$	512,819		$	1,873,361

        The following table sets forth the changes in the standardized measure of discounted future net cash flows applicable to proved oil and natural gas reserves for the Successor Period, Predecessor Period and the years ended December 31, 2015 and 2014 (in thousands):

	Successor			Predecessor
	For the Period October 21, 2016 through December 31, 2016			For the Period January 1, 2016 through October 20, 2016			Year Ended December 31,
							2015			2014
Standardized measure, beginning of period	$	349,905		$	512,819		$	1,873,361		$	1,790,446
Net changes in prices and production costs		78,103			(113,313	)		(960,245	)		(190,256	)
Net changes in future development costs		2,022			175			57,357			66,828
Sales of oil and natural gas, net		(27,292	)		(116,043	)		(232,630	)		(536,362	)
Extensions		102,087			29,871			38,550			1,094,606
Discoveries		—			—			—			—
Purchases of reserves in place		—			—			34,369			—
Divestiture of reserves		—			—			(77,445	)		(390,264	)
Revisions of previous quantity estimates		102,623			(22,194	)		(1,174,997	)		(205,233	)
Previously estimated development costs incurred		—			29,975			198,564			160,663
Accretion of discount		5,832			42,735			238,639			206,783
Net change in income taxes		(48,206	)		—			513,024			(230,401	)
Changes in timing, other		(35,124	)		(14,120	)		4,272			106,551
Standardized measure, end of period	$	529,950		$	349,905		$	512,819		$	1,873,361