Exit Costs

9 Months Ended

Sep. 30, 2023

Restructuring and Related Activities [Abstract]

Exit Costs

(13) EXIT 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 2023, we recorded accretion expense of $31.6 million compared to $33.0 million in the same period of the prior year. In second quarter 2023, we recorded a net adjustment of $37.8 million to increase this obligation primarily for higher rates due to inflation. In second quarter 2022, we recorded a net adjustment of $24.8 million to increase the obligation for a change in our forecasted drilling plans of the buyer. The estimated discounted divestiture contract obligation was $389.9 million at September 30, 2023.

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, 2023 was $3.2 million.

The following summarizes our exit costs for the three and nine months ended September 30, 2023 and 2022 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Transportation contract capacity releases   (including accretion of discount)	$	79	$	135	$	281	$	458
Divestiture contract obligation    (including accretion of discount)		10,605		10,930		71,380		57,791
	$	10,684	$	11,065	$	71,661	$	58,249

The following details the accrued exit cost liability activity for the nine months ended September 30, 2023 (in thousands):

	Exit Costs (a)
Balance at December 31, 2022	$	395,680
Accretion of discount		31,900
Changes in estimate		39,761
Payments		(74,224	)
Balance at September 30, 2023	$	393,117

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