Exit Costs

12 Months Ended

Dec. 31, 2022

Restructuring and Related Activities [Abstract]

Exit Costs

(15)Exit 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 the twelve months ended December 31, 2022, we recorded accretion expense of $43.6 million compared to $47.9 million in 2021 and $20.2 million in 2020. In second quarter 2022, we recorded a net unfavorable 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 and a change to our assessment of drilling plans of the buyer. The present value of our estimated obligations related to these assets was initially recorded in 2020 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 $390.6 million at December 31, 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. 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, 2022 was $5.1 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. The following summarizes our exit and termination costs for the three years ended December 31, 2022, 2021 and 2020 (in thousands):

	Year Ended December 31,
	2022		2021		2020
Severance costs	$	—	$	567	$	5,909
Transportation contract capacity releases (including    accretion of discount)		579		754		10,900
Divestiture contract obligation (including accretion    of discount)		69,758		20,340		499,935
One-time minimum volume commitment contract    payment		—		—		28,500
Stock-based compensation and other		—		—		2,165
	$	70,337	$	21,661	$	547,409

The following details the accrued exit and termination cost liability activity for the years ended December 31, 2022 and 2021 (in thousands):

	Exit Costs			Termination Costs
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
Accrued contract obligations-changes in estimate		26,183			—
Accretion of discount		44,154			—
Payments		(98,399	)		(10	)
Balance at December 31, 2022	$	395,680		$	—