Exit and Termination Costs

12 Months Ended

Dec. 31, 2021

Restructuring and Related Activities [Abstract]

Exit and Termination Costs

(15)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 sheet. In the twelve months ended December 31, 2021, we recorded accretion expense of $47.9 million compared to $20.2 million in the prior year. In second quarter 2021, we also 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 assessment of drilling plans of the buyer. In third quarter 2020, the present value of our estimated obligations related to these assets was initially recorded as an exit cost at a total of $479.8 million. Also associated with this sale, we agreed to pay a midstream company $28.5 million to reduce our financial obligation related to the minimum volume commitments associated with this asset which was also recorded as an exit cost in third quarter 2020. The estimated discounted value for this divestiture contract obligation was $416.4 million at December 31, 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. As a result of these releases, we recorded exit costs of $10.4 million which represented the discounted present value of our remaining obligations to the third party. The remaining carrying value for these transportation capacity releases as of December 31, 2021 was $7.3 million.

Termination Costs

In third quarter 2020, we completed the sale of our North Louisiana assets and we recorded $2.5 million of severance costs and stock-based compensation expense. Also in third quarter 2020, we announced an additional reduction in our work force as we continued to focus on lowering administrative expenses 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 Northwest Pennsylvania and we recorded $1.4 million of severance costs which is primarily related to the sale of these assets. In 2019, we sold various non-core assets in Pennsylvania and accrued $819,000 of severance costs related to this sale. In second quarter 2019, we also announced another reduction in our work force and recorded $2.2 million of severance costs related to this work force reduction. The following summarizes our exit and termination costs for the three years ended December 31, 2021, 2020 and 2019 (in thousands):

	Year Ended December 31,
	2021		2020		2019
Severance costs	$	567	$	5,909	$	7,535
Transportation contract capacity releases (including    accretion of discount)		754		10,900		—
Divestiture contract obligation (including accretion    of discount)		20,340		499,935		—
One-time minimum volume commitment contract    payment		—		28,500		—
Stock-based compensation and other		—		2,165		1,971
	$	21,661	$	547,409	$	9,506

The following details the accrued exit and termination cost liability activity for the years ended December 31, 2021 and 2020 (in thousands):

	Exit Costs			Termination Costs
Balance at December 31, 2019	$	—		$	4,692
Accrued severance costs		—			5,909
Accrued contract obligations		490,114			—
Accretion of discount		20,720			—
Payments		(17,291	)		(9,147	)
Balance at December 31, 2020		493,543			1,454
Accrued severance costs		—			567
Accrued contract obligations-changes in estimate		(27,575	)		—
Accretion of discount		48,669			—
Payments		(90,895	)		(2,011	)
Balance at December 31, 2021	$	423,742		$	10