Divestitures

6 Months Ended

Jun. 30, 2019

Discontinued Operations and Disposal Groups [Abstract]

Divestitures

Divestitures

In 2018, the Company sold its non-core Permian Basin assets located in Texas and its non-core assets in the Huron play (2018 Divestitures).

During the first quarter of 2018, the Company recorded an impairment of $2.3 billion associated with certain non-core production and related midstream assets in the Huron and Permian plays. The Company determined these properties and related pipeline assets were impaired as their carrying value exceeded the undiscounted cash flows which were expected to result from their continued use and potential disposition and because management no longer intended to develop the associated unproved properties. The first quarter of 2018 impairment reduced these assets to their estimated fair value of approximately $1.0 billion.

The fair value of the impaired assets, as determined at March 31, 2018, was based on significant inputs that were not observable in the market and as such are considered to be Level 3 fair value measurements. See Note 5 for a description of the fair value hierarchy and Note 1 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 for the policy on impairment of proved and unproved properties. Key assumptions included in the calculation of the fair value of the impaired assets as of March 31, 2018 included (i) reserves, including risk adjustments for probable and possible reserves; (ii) future commodity prices; (iii) to the extent available, market based indicators of fair value including estimated proceeds which could be realized upon a potential disposition; (iv) production rates based on the Company's experience with similar properties it operates; (v) estimated future operating and development costs; and (vi) a market-based weighted average cost of capital.

During the second quarter of 2018, the Company recorded an additional impairment/loss on sale of long-lived assets of $118.1 million to write down the carrying value of the properties and related pipeline assets to the estimated amounts to be received upon the closing of the 2018 Divestitures. The Company received an initial deposit of $57.5 million related to the sale of its non-core assets in the Huron play during the second quarter of 2018.