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Commitments and Contingencies
 12 Months Ended
Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Transportation and Gathering Agreements
The Company has entered into certain transportation and gathering agreements with various pipeline carriers. Under certain of these agreements, the Company is obligated to ship minimum daily quantities, or pay for any deficiencies at a specified rate. The Company's forecasted production to be shipped on these pipelines is expected to exceed minimum daily quantities provided in the agreements. The Company is also obligated under certain of these arrangements to pay a demand charge for firm capacity rights on pipeline systems regardless of the amount of pipeline capacity utilized by the Company. If the Company does not utilize the capacity, it can release it to others, thus reducing its potential liability.
As of December 31, 2020, the Company's future minimum obligations under transportation and gathering agreements are as follows:
(In thousands)
2021$105,304 
2022191,455 
2023185,913 
2024179,772 
2025169,050 
Thereafter1,184,624 
$2,016,118 
Lease Commitments
The Company has operating leases for office space, surface use agreements, compressor services and other leases. The leases have remaining terms ranging from six months to 25 years, including options to extend leases that the Company is reasonably certain to exercise. During the year ended December 31, 2020, the Company recognized operating lease cost and variable lease cost of $5.4 million and $1.1 million, respectively. During the year ended December 31, 2019, the Company recognized operating lease cost and variable lease cost of $11.5 million and $6.6 million, respectively.
Short-term leases. The Company leases drilling rigs, fracturing and other equipment under lease terms ranging from 30 days to one year. Lease cost of $26.3 million and $267.9 million was recognized on short-term leases during the year ended December 31, 2020 and 2019, respectively. Certain lease costs are capitalized and included in Properties and equipment, net in the Consolidated Balance Sheet because they relate to drilling and completion activities, while other costs are expensed because they relate to production and administrative activities.
As of December 31, 2020, the Company’s future undiscounted minimum cash payment obligations for its operating lease liabilities are as follows:
(In thousands)Year Ending December 31,
2021$5,556 
20224,894 
20234,613 
20244,653 
20254,675 
Thereafter20,495 
Total undiscounted future lease payments44,886 
Present value adjustment(11,267)
Net operating lease liabilities$33,619 
Supplemental cash flow information related to leases was as follows:
Year Ended December 31,
(In thousands)20202019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$5,338 $4,614 
Investing cash flows from operating leases$— $6,647 
Information regarding the weighted-average remaining lease term and the weighted-average discount rate for operating leases is summarized below:
December 31,
20202019
Weighted-average remaining lease term (in years)
Operating leases11.112.1
Weighted-average discount rate
Operating leases5.0 %5.0 %
Legal Matters
Pennsylvania Office of Attorney General Matter
In June 2020, the Office of Attorney General of the Commonwealth of Pennsylvania informed the Company that it will pursue certain misdemeanor and felony charges against the Company related to alleged violations of the Pennsylvania Clean Streams Law, which prohibits discharge of industrial wastes. The Company is vigorously defending itself against such charges; however, the proceedings could result in fines or penalties against the Company. At this time, it is not possible to estimate the amount of any fines or penalties, or the range of such fines or penalties, that are reasonably possible in this case.
Other
The Company is a defendant in various other legal proceedings arising in the normal course of business. All known liabilities are accrued when management determines they are probable based on its best estimate of the potential loss. While the outcome and impact of these legal proceedings on the Company cannot be predicted with certainty, management believes that the resolution of these proceedings will not have a material effect on the Company's financial position, results of operations or cash flows.
Contingency Reserves
When deemed necessary, the Company establishes reserves for certain legal proceedings. The establishment of a reserve is based on an estimation process that includes the advice of legal counsel and subjective judgment of management. While management believes these reserves to be adequate, it is reasonably possible that the Company could incur additional losses with respect to those matters for which reserves have been established. The Company believes that any such amount above the
amounts accrued would not be material to the Consolidated Financial Statements. Future changes in facts and circumstances not currently foreseeable could result in the actual liability exceeding the estimated ranges of loss and amounts accrued.