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Commitments
12 Months Ended
Dec. 31, 2016
Commitments [Abstract]  
Commitments

Note R – Commitments



The Company leases production and other facilities under operating leases.  The most significant operating leases are associated with floating, production, storage and offloading facilities at the Kikeh oil field and a  production facility at the West Patricia field.  During each of the next five years, expected future net rental payments under all operating leases are approximately $71,335,000 in 2017,  $67,586,000 in 2018,  $54,672,000 in 2019, $54,423,000 in 2020 and $54,622,000 in 2021.  Rental expense for noncancellable operating leases, including contingent payments when applicable, was $77,520,000 in 2016, $111,425,000 in 2015, and $144,981,000 in 2014.  A lease of production equipment at the Kakap field offshore Sabah, Malaysia has been accounted for as a capital lease and is included in long-term debt discussed in Note G.



The Company has entered into contracts to hire various drilling rigs and associated equipment for periods beyond December 31, 2016.  These rigs will primarily be utilized for drilling operations onshore U.S. and Canada and offshore Malaysia.  Future commitments under these contracts, all of which expire by 2019, total $45,042,000.  A portion of these costs are expected to be borne by other working interest owners as partners of the Company when the wells are drilled.  These drilling costs are generally expected to be accounted for as capital expenditures as incurred during the contract periods.



The Company has operating, production handling and transportation service agreements for oil and/or natural gas operations in the U.S. and Western Canada.  The U.S. transportation contracts require minimum monthly payments through 2024, while the Western Canada processing contracts call for minimum monthly payments through 2035.  Future required minimum monthly payments for the next five years are $53,893,000 in 2017,  $48,962,000 in 2018, $42,616,000 in 2019, $46,597,000 in 2020 and $47,793,000 in 2021.  Under certain circumstances, the Company is required to pay additional amounts depending on the actual hydrocarbon quantities processed under the agreement.  Total costs incurred under these service arrangements were $50,300,000 in 2016, 32,473,000 in 2015, and   $34,597,000 in 2014.



Commitments for capital expenditures were approximately $585,651,000 at December 31, 2016, including $224,485,000 for field development and future work commitments in Malaysia, $156,984,000 for development at Kaybob Duvernay in Canada, $107,002,000 for work in the Eagle Ford Shale, $25,202,000 for costs to develop deepwater Gulf of Mexico fields, and $27,178,000 and $12,828,000 for future work commitments in Vietnam and Brunei, respectively.