Acquisitions of Oil and Natural Gas Properties

9 Months Ended

Sep. 30, 2016

Business Combinations [Abstract]

Acquisitions of Oil and Natural Gas Properties

ACQUISITIONS OF OIL AND NATURAL GAS PROPERTIES

During the three months ended September 30, 2016, the Company incurred costs of $23.8 million related to the acquisition of leasehold acreage. The Company reflected the acquisition costs as part of costs not subject to depletion within its oil and natural gas properties for the three months ended September 30, 2016.

In addition, during the three months ended September 30, 2016, the Company acquired certain oil and natural gas properties as described below. These acquisitions were accounted for using the acquisition method under Accounting Standards Codification ("ASC") Topic 805, "Business Combinations," which requires the acquired assets and liabilities to be recorded at fair values as of the respective acquisition dates.

During the three months ended September 30, 2016, the Company acquired, from unaffiliated individuals and entities, interests in certain oil and natural gas properties through a number of separate, individually negotiated transactions for total cash consideration of $292.3 million. The Company reflected $28.8 million of the total consideration paid as part of its cost subject to depletion within its oil and natural gas properties and $263.6 million as unproved leasehold costs within its oil and natural gas properties for the three months ended September 30, 2016. The revenues and operating expenses attributable to these acquisitions during the three months ended September 30, 2016 were not material.

As discussed in Note 15—Subsequent Events, on October 4, 2016, the Company acquired, from unaffiliated third-party sellers, 11,672 gross (9,140 net) leasehold acres, including certain producing oil and gas properties, near existing leasehold in Glasscock County, Texas.