Property, Plant and Equipment

12 Months Ended

Dec. 31, 2022

Oil and Gas Property [Abstract]

Property, Plant and Equipment

Note 4 — Property, Plant and Equipment

Proved Properties

The Company’s interests in oil and natural gas proved properties are located in the United States, primarily in the Gulf of Mexico deep and shallow waters. During 2022, 2021 and 2020, the Company’s ceiling test computations resulted in a write-down of its U.S. oil and natural gas properties of nil, nil and $267.9 million, respectively. At December 31, 2022, its ceiling test computation was based on SEC pricing of $96.03 per Bbl of oil, $6.80 per Mcf of natural gas and $33.89 per Bbl of NGLs.

Unproved Properties

Unproved capitalized costs of oil and natural gas properties excluded from amortization relate to unevaluated properties associated with acquisitions, leases awarded in the U.S. Gulf of Mexico federal lease sales, certain geological and geophysical costs, expenditures associated with certain exploratory wells in progress and capitalized interest. Unproved properties also include expenditures associated with exploration and appraisal activities in Block 7 located in the shallow waters off the coast of Mexico’s Tabasco state.

The following table sets forth a summary of the Company’s oil and natural gas property costs not being amortized at December 31, 2022, by the year in which such costs were incurred (in thousands):

			Year Ended December 31,
	Total		2022		2021		2020		2019 and Prior
Acquisition United States	$	29,646	$	2,221	$	—	$	27,322	$	103
Exploration United States		13,707		2,696		4,727		1,753		4,531
Exploration Mexico		111,430		1,170		3,460		13,853		92,947
Total unproved properties, not subject to amortization	$	154,783	$	6,087	$	8,187	$	42,928	$	97,581

The excluded costs will be included in the amortization base as properties are evaluated and proved reserves are established or impairment is determined. The $111.4 million of capitalized exploration cost in Mexico relates to the Zama Field Development Plan for submission to the Mexican regulator for final approval. The Company expects to transfer the cost into the amortization base by 2024.

The Company’s evaluation of unproved property located offshore Mexico resulted in a non-cash impairment of nil, $18.1 million and $0.1 million for the years ended December 31, 2022, 2021 and 2020, respectively, presented as “Write-down of oil and natural gas properties” on the Consolidated Statements of Operations. The non-cash impairment is primarily attributable to the Company’s operations in offshore Mexico in Block 31 associated with the Company’s non-consent of the proposed appraisal plan during the fourth quarter of 2021.

Asset Retirement Obligations

The asset retirement obligations included in the Consolidated Balance Sheets in current and non-current liabilities, and the changes in that liability were as follows (in thousands):

	Year Ended December 31,
	2022			2021
Balance, beginning of period	$	434,006		$	442,269
Obligations acquired		—			433
Obligations incurred		1,140			52
Obligations settled		(69,596	)		(67,988	)
Obligations divested		(1,572	)		(340	)
Accretion expense		55,995			58,129
Changes in estimate(1)		121,688			1,451
Balance, end of period	$	541,661		$	434,006
Less: Current portion		39,888			60,311
Long-term portion	$	501,773		$	373,695

(1)Changes in estimate for the year ended December 31, 2022 were primarily due to an increase in estimated service costs.