Exit Costs

9 Months Ended

Sep. 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 nine months 2024, we recorded accretion expense of $30.0 million compared to $31.6 million in the same period of the prior year. In first nine months 2024, we also recorded a net adjustment of $2.1 million to decrease the obligation mainly due to a decrease in forecasted electricity costs. In first nine 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. The estimated discounted divestiture contract obligation was $356.1 million at September 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 September 30, 2024 was $495,000.

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Transportation contract capacity releases		45	$	79		124	$	281
Divestiture contract obligation		7,604		10,605		27,934		71,380
	$	7,649	$	10,684	$	28,058	$	71,661

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

	Exit Costs (a)
Balance at December 31, 2023	$	399,989
Accretion of discount		30,155
Changes in estimate		(2,097	)
Payments		(71,506	)
Balance at September 30, 2024	$	356,541

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