Acquisitions of Oil and Natural Gas Properties

12 Months Ended

Dec. 31, 2019

Business Combinations [Abstract]

Acquisitions of Oil and Natural Gas Properties

ACQUISITIONS OF OIL AND NATURAL GAS PROPERTIES

The Company incurred costs of $52.0 million, $137.0 million and $194.5 million related to the purchase of leasehold acreage during the years ended December 31, 2019, 2018 and 2017, respectively. During the years ended December 31, 2019, 2018 and 2017, the Company reflected $27.1 million, $119.7 million and $176.5 million as part of costs not subject to depletion, respectively. During the years ended December 31, 2019, 2018 and 2017, the Company reflected $24.9 million, $17.3 million and $18.0 million as part of costs subject to depletion within its oil and natural gas properties, respectively.

In addition to the above described acquisition of leasehold acreage, during 2017, the Company acquired, from unaffiliated individuals and entities, interests in certain oil and natural gas properties through a number of separate, individually negotiated transactions, including the Double Eagle Acquisition (as defined in Note 1—Organization and Nature of Operations), for total consideration of $3,181.1 million. These acquisitions were accounted for using the acquisition method under ASC Topic 805, Business Combinations, which requires the acquired assets and liabilities to be recorded at fair values as of the respective acquisition dates. The Company reflected $464.2 million of the total consideration paid as part of its costs subject to depletion within its oil and natural gas properties and $2,716.9 million as unproved leasehold costs within its oil and natural gas properties for year ended December 31, 2017. Excluding the Double Eagle Acquisition, the revenues and operating expenses attributable to these acquisitions during the years ended December 31, 2019, 2018 and 2017 were not material.

As described in Note 1—Organization and Nature of Operations, on April 20, 2017, the Company and Parsley LLC completed the Double Eagle Acquisition, as well as certain related transactions with an affiliate of Double Eagle. The aggregate consideration for the Double Eagle Acquisition, following post-closing adjustments, was $2,579.1 million, which consisted of (i) approximately $1,395.6 million in cash and (ii) 39,848,518 PE Units and a corresponding 39,848,518 shares of Class B common stock.

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed as a result of the Double Eagle Acquisition (in thousands):

Cash	$	2,469
Receivables	20,756
Derivatives	3,970
Proved oil and natural gas properties	353,000
Unproved oil and natural gas properties	2,257,266
Total assets acquired	2,637,461
Accounts payable	(48,179		)
Deferred tax liability	(10,167		)
Total liabilities assumed	(58,346		)
Estimated fair value of net assets acquired	$	2,579,115

During 2019, 2018 and 2017, the Company also exchanged certain unproved acreage and oil and natural gas properties with certain third parties, with no gain or loss recognized.