Properties, Plant and Equipment

9 Months Ended

Sep. 30, 2017

5. Properties, Plant and Equipment

Oil and Gas Properties

The Company accounts for its oil and natural gas exploration and production activities under the successful efforts method of accounting. Oil and gas properties consisted of the following at September 30, 2017 and December 31, 2016:


	September 30,		December 31,
(in thousands of dollars)	2017		2016
Mineral interests in properties
Unproved	$	190,722	$	213,153
Proved		882,386		1,054,683
Wells and equipment and related facilities		1,375,932		1,395,291
		2,449,040		2,663,127
Less: Accumulated depletion and impairment		(870,301)		(919,539)
Net oil and gas properties	$	1,578,739	$	1,743,588

There were no exploratory wells drilled during the nine months ended September 30, 2017 or 2016. As such, no associated costs were capitalized and no exploratory wells resulted in exploration expense during either period.

The Company capitalizes interest on expenditures for significant exploration and development projects that last more than six months while activities are in progress to bring the assets to their intended use. During the three and nine months ended September 30, 2017, the Company capitalized $0.1 million and $0.3 million, respectively, associated with such in progress projects. The Company did not capitalize any interest during the three and nine months ended September 30, 2016 as no projects lasted more than six months. Costs incurred to maintain wells and related equipment are charged to expense as incurred.

Depletion of oil and gas properties amounted to $46.1 million and $126.6 million for the three and nine months ended September 30, 2017, respectively, and $36.3 million and $115.6 million for the three and nine months ended September 30, 2016, respectively.

The Company continues to monitor its proved and unproved properties for impairment. No impairments of proved or unproved properties were recorded as a result of our standard impairment assessment during the nine months ended September 30, 2017 or 2016. However, as noted in Note 4, “Acquisitions and Divestitures - Arkoma Divestiture,” the Company recognized an impairment charge of $148.0 million during the nine months ended September 30, 2017 resulting from the sale of the Arkoma Assets.

Other Property, Plant and Equipment

Other property, plant and equipment consisted of the following at September 30, 2017 and December 31, 2016:


	September 30,		December 31,
(in thousands of dollars)	2017		2016
Leasehold improvements	$	1,186	$	1,213
Furniture, fixtures, computers and software		4,391		4,170
Vehicles		1,768		1,677
Aircraft		910		910
Other		211		284
		8,466		8,254
Less: Accumulated depreciation and amortization		(5,901)		(5,258)
Net other property, plant and equipment	$	2,565	$	2,996

Depreciation and amortization of other property, plant and equipment amounted to $0.3 million and $0.8 million for the three and nine months ended September 30, 2017, respectively, and $0.3 million and $0.9 million for the three and nine months ended September 30, 2016, respectively.