Commitments and Contingencies

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Leases

We lease office space from affiliates and nonaffiliates under noncancelable operating leases.  Rental expense pursuant to the office leases amounted to $1.8 million, $1.8 million and $1.6 million for the years ended December 31, 2014, 2013 and 2012, respectively.

Future minimum payments under noncancelable leases at December 31, 2014 are as follows:  

	Leases
	Capital(a)		Operating(b)		Total
	(In thousands)
2015	$	995	$	4,055	$	5,050
2016	575		3,719		4,294
2017	131		354		485
Thereafter	—		—		—
Total minimum lease payments	$	1,701	$	8,128	$	9,829

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(a) Relates to vehicle leases.

(b) Includes leases for two drilling rigs.

Legal Proceedings

SWR is a defendant in a suit filed in April 2011 in the Circuit Court of Union County, Arkansas where the plaintiffs initially sought in excess of $8 million for the costs of environmental remediation to a lease on which operations were commenced in the 1930s. In June 2013, the plaintiffs, SWR and the remaining defendants agreed to a settlement of $0.8 million, of which SWR would pay $0.7 million. To accomplish the settlement, the case was converted to a class action, and each member of the class was offered the right to either participate or opt out of the class and continue a separate action for damages. One plaintiff opted out and will be subject to all previous rulings of the court, including an order dismissing certain claims on the basis that such claims were time barred. A loss on settlement of $0.7 million was recorded for the year ended December 31, 2013 in connection with this proposed settlement. The settlement was entered by the Court on December 19, 2014, and all settlement funds were paid to plaintiffs’ counsel in January 2015. The case against the single plaintiff will continue in 2015.

In February 2012, BMT O&G TX, L.P. filed a suit in the 143rd Judicial District in Reeves County, Texas to terminate a lease under our farm-in agreement with Chesapeake Exploration, L.L.C. (“Chesapeake”). Plaintiffs are the lessors and claim a breach of the lease which they allege gives rise to termination of the lease. CWEI denies a breach and argues in the alternative that (i) any breach was cured in accordance with the lease and (ii) a breach will not give rise to lease termination. In October 2013, a judge ruled that CWEI and Chesapeake are jointly and severally liable for damages to plaintiffs in the amount of approximately $2.9 million and attorney fees of $0.8 million. A loss of $1.4 million was recorded for the year ended December  31, 2013 in connection with the judgment. CWEI is appealing the judgment. All appellate briefs have been filed with the El Paso Court of Appeals, and argument has been scheduled for June 4, 2015.

We are also a defendant in several other lawsuits that have arisen in the ordinary course of business. While the outcome of these lawsuits cannot be predicted with certainty, management does not expect any of these to have a material adverse effect on our consolidated financial condition or results of operations.