Exit Costs

6 Months Ended

Jun. 30, 2024

Restructuring and Related Activities [Abstract]

Exit Costs

(14) 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 six months 2024, we recorded accretion expense of $20.3 million compared to $21.0 million in the same period of the prior year. In first six months 2023, we also recorded a net adjustment of $39.8 million to increase the obligation for an increase in forecasted rates due to inflation. We have recorded no adjustments to date in 2024. The estimated discounted divestiture contract obligation was $368.8 million at June 30, 2024.

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, 2024 was $1.2 million.

The following summarizes our exit costs (including accretion of discount and any adjustments) for the three and six months ended June 30, 2024 and 2023 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Transportation contract capacity releases	$	31	$	95	$	80	$	203
Divestiture contract obligation		10,063		48,559		20,329		60,774
	$	10,094	$	48,654	$	20,409	$	60,977

The following details the accrued exit cost liability activity for the six months ended June 30, 2024 (in thousands):

	Exit Costs (a)
Balance at December 31, 2023	$	399,989
Accretion of discount		20,409
Payments		(50,430	)
Balance at June 30, 2024	$	369,968

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