Exit and Termination Costs

9 Months Ended

Sep. 30, 2021

Restructuring And Related Activities [Abstract]

Exit and Termination Costs

(14) EXIT AND TERMINATION COSTS

Exit Costs

In August 2020, we sold our North Louisiana assets and retained certain gathering, transportation and processing obligations which extend into 2030. These are contracts where we will not realize any future benefit. The estimated obligations are included in current and long-term divestiture contract obligation in our consolidated balance sheets. In first nine months 2021, we recorded accretion expense of $36.6 million. In second quarter 2021, we recorded a net favorable adjustment of $28.2 million to reduce this obligation due to a reduction of certain contractual payments compared to those originally estimated and a change to our estimated drilling plans of the buyer. The estimated discounted divestiture contract obligation was $426.6 million at September 30, 2021.

In second quarter 2020, we negotiated capacity releases on certain transportation pipelines in Pennsylvania effective May 31, 2020 and extending through the remainder of the contract. We recorded termination costs of $10.4 million which represented the discounted present value of our remaining obligation to the third-party. The estimated remaining discounted obligation for these transportation capacity releases as of September 30, 2021 was $7.9 million.

Termination Costs

In third quarter 2020, we completed the sale of our North Louisiana assets. We recorded $2.5 million of severance costs and stock-based compensation expense associated with this sale. In third quarter 2020, we also announced an additional reduction in our work force and recorded $3.7 million of severance costs and stock-based compensation expense related to this reduction in force. In first quarter 2020, we completed the sale of our shallow legacy assets in northwestern Pennsylvania and we recorded $1.6 million of severance costs which is primarily related to the sale of these assets. The following summarizes our exit and termination costs for the three and nine months ended September 30, 2021 and 2020 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Severance costs	$	—	$	4,191	$	509	$	5,638
Transportation contract capacity releases (including    accretion of discount)		186		233		580		10,678
Divestiture contract obligation (including accretion of    discount)		11,603		486,689		8,468		486,689
One-time minimum volume commitment contract    payment		—		28,500		—		28,500
Stock-based compensation		—		2,020		—		2,020
	$	11,789	$	521,633	$	9,557	$	533,525

The following details the accrued exit and termination cost liability activity for the nine months ended September 30, 2021 (in thousands):

	Exit Costs (1)			Termination Costs
Balance at December 31, 2020	$	493,543		$	1,454
Accrued severance costs		—			509
Accretion of discount		37,213			—
Divestiture contract obligation - changes in estimate		(28,165	)		—
Payments		(68,152	)		(1,695	)
Balance at September 30, 2021	$	434,439		$	268

(1) Includes the divestiture contract obligation and the transportation contract capacity release obligation.