Commitments and Contingencies

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 6 – Commitments and Contingencies

Commitments

The Company has entered into various agreements, which include drilling rig contracts of $116.1 million, gathering, processing, and transportation through-put commitments of $939.4 million, office leases, including maintenance, of $69.3 million, and other miscellaneous contracts and leases of $11.7 million. The annual minimum payments for the next five years and total minimum payments thereafter are presented below:

Years Ending December 31,	(in thousands)
2015	$	224,897
2016	147,896
2017	118,320
2018	128,866
2019	132,920
Thereafter	383,619
Total	$	1,136,518

Drilling rig contracts

The Company has multiple long-term drilling rig contracts. Early termination of these rig contracts as of December 31, 2014, would result in termination penalties of $75.8 million, which would be in lieu of paying the remaining drilling commitments of $116.1 million included in the table above.

Transportation commitments

The Company has gathering, processing, and transportation through-put commitments with various third parties that require delivery of a minimum amount of 1,411 Bcf of natural gas and 48 MMBbl of crude oil. These contracts expire at various dates through 2028 and the total amount of the commitment is approximately $939.4 million. The Company will be required to make periodic deficiency payments for any shortfalls in delivering the minimum volume commitments. If a shortfall in the minimum volume commitment for natural gas is projected, the Company has rights under certain contracts to arrange for third party gas to be delivered, and such volumes would count toward its minimum volume commitment. As of the filing date of this report, the Company does not expect to incur any material shortfalls.

Office leases

The Company leases office space under various operating leases with terms extending as far as 2026. Rent expense for years ended December 31, 2014, 2013, and 2012, was $6.5 million, $5.7 million, and $5.4 million, respectively. The Company also leases office equipment under various operating leases.

Contingencies

The Company is subject to litigation and claims arising in the ordinary course of business. The Company accrues for such items when a liability is both probable and the amount can be reasonably estimated. In the opinion of management, the results of such pending litigation and claims will not have a material effect on the results of operations, the financial position, or the cash flows of the Company.