Exit and Termination Costs

6 Months Ended

Jun. 30, 2022

Restructuring and Related Activities [Abstract]

Exit and Termination Costs

(13) 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 six months 2022, we recorded accretion expense of $22.1 million compared to $25.0 million in the same period of the prior year. In second quarter 2022, we recorded a net adjustment of $24.8 million to increase this obligation for a change in our forecasted drilling plans of the buyer along with adjusting the difference between estimated and actual payments. 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 along with a change in our forecasted drilling plans of the buyer. The estimated discounted divestiture contract obligation was $414.2 million at June 30, 2022.

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. The estimated remaining discounted obligation for these transportation capacity releases as of June 30, 2022 was $6.2 million.

Termination Costs

The following summarizes our exit and termination costs for the three and six months ended June 30, 2022 and 2021 (in thousands):

	Three Months Ended June 30,					Six Months Ended June 30,
	2022		2021			2022		2021
Severance costs	$	—	$	—		$	—	$	509
Transportation contract capacity releases   (including accretion of discount)		162		184			323		394
Divestiture contract obligation (including accretion    of discount)		35,907		(16,130	)		46,861		(3,135	)
	$	36,069	$	(15,946	)	$	47,184	$	(2,232	)

The following details the accrued exit and termination cost liability activity for the six months ended June 30, 2022 (in thousands):

	Exit Costs (1)			Termination Costs
Balance at December 31, 2021	$	423,742		$	10
Accretion of discount		22,408			—
Changes in estimate		24,776			—
Payments		(50,525	)		(10	)
Balance at June 30, 2022	$	420,401		$	—

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