Exit and Termination Costs

9 Months Ended

Sep. 30, 2022

Restructuring and Related Activities [Abstract]

Exit and Termination Costs

(13) EXIT AND TERMINATION COSTS

Exit Costs

In third quarter 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 2022, we recorded accretion expense of $33.0 million compared to $36.6 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 $401.2 million at September 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 September 30, 2022 was $5.7 million.

Termination Costs

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Severance costs	$	—	$	—	$	—	$	509
Transportation contract capacity releases   (including accretion of discount)		135		186		458		580
Divestiture contract obligation (including accretion    of discount)		10,930		11,603		57,791		8,468
	$	11,065	$	11,789	$	58,249	$	9,557

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

	Exit Costs (1)			Termination Costs
Balance at December 31, 2021	$	423,742		$	10
Accretion of discount		33,472			—
Changes in estimate		24,776			—
Payments		(75,103	)		(10	)
Balance at September 30, 2022	$	406,887		$	—

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