Supplemental Crude Oil and Natural Gas Information (Unaudited) | Supplemental Crude Oil and Natural Gas Information (Unaudited) The table below shows estimates of proved reserves prepared by the Company’s internal technical staff and independent external reserve engineers in accordance with SEC definitions. Ryder Scott Company, L.P. prepared reserve estimates for properties comprising approximately 98%, 95%, and 91% of the Company's total proved reserves as of December 31, 2021, 2020, and 2019, respectively. Remaining reserve estimates were prepared by the Company’s internal technical staff. All proved reserves stated herein are located in the United States. No proved reserves have been included for the Company’s Canadian operations for the periods presented. Proved reserves attributable to noncontrolling interests are not material relative to the Company's consolidated reserves and are not separately presented in the tables below. Proved reserves are estimated quantities of crude oil and natural gas which geological and engineering data demonstrate with reasonable certainty to be economically producible in future periods from known reservoirs under existing economic conditions, operating methods, and government regulations prior to the time at which contracts providing the right to operate expire, unless evidence indicates renewal is reasonably certain. There are numerous uncertainties inherent in estimating quantities of proved crude oil and natural gas reserves. Crude oil and natural gas reserve engineering is a subjective process of estimating underground accumulations of crude oil and natural gas that cannot be precisely measured, and estimates of engineers other than the Company’s might differ materially from the estimates set forth herein. The accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation and judgment. Periodic revisions or removals of estimated reserves and future cash flows may be necessary as a result of a number of factors, including reservoir performance, new drilling, crude oil and natural gas prices, changes in costs, technological advances, new geological or geophysical data, changes in business strategies, or other economic factors. Accordingly, reserve estimates may differ significantly from the quantities of crude oil and natural gas ultimately recovered. Reserves at December 31, 2021, 2020, and 2019 were computed using the 12-month unweighted average of the first-day-of-the-month commodity prices as required by SEC rules. Natural gas imbalance receivables and payables for each of the three years ended December 31, 2021, 2020, and 2019 were not material and have not been included in the reserve estimates. Proved crude oil and natural gas reserves Changes in proved reserves were as follows for the periods presented: Crude Oil Natural Gas Total Proved reserves as of December 31, 2018 757,096 4,591,614 1,522,365 Revisions of previous estimates (88,307) (363,239) (148,848) Extensions, discoveries and other additions 162,710 1,213,947 365,034 Production (72,267) (311,865) (124,244) Sales of minerals in place (803) (6,224) (1,840) Purchases of minerals in place 1,758 30,238 6,798 Proved reserves as of December 31, 2019 760,187 5,154,471 1,619,265 Revisions of previous estimates (249,845) (1,530,174) (504,874) Extensions, discoveries and other additions 42,106 295,686 91,387 Production (58,745) (306,528) (109,833) Sales of minerals in place — — — Purchases of minerals in place 3,272 27,269 7,817 Proved reserves as of December 31, 2020 496,975 3,640,724 1,103,762 Revisions of previous estimates 14,574 233,966 53,569 Extensions, discoveries and other additions 165,268 1,235,022 371,105 Production (58,636) (370,110) (120,321) Sales of minerals in place (70) (469) (148) Purchases of minerals in place 175,419 371,546 237,343 Proved reserves as of December 31, 2021 793,530 5,110,679 1,645,310 Revisions of previous estimates. Revisions for 2021 are comprised of (i) upward price revisions of 92 MMBo and 458 Bcf (totaling 168 MMBoe) due to the significant increase in average crude oil and natural gas prices in 2021 compared to 2020 resulting from the lifting of COVID-19 restrictions, the resumption of normal economic activity, and the resulting improvement in supply and demand fundamentals, (ii) the removal of 31 MMBo and 155 Bcf (totaling 57 MMBoe) of PUD reserves no longer scheduled to be drilled within five years of initial booking due continual refinement of our drilling and development programs and reallocation of capital to areas providing the best opportunities to improve efficiencies, recoveries, and rates of return, (iii) downward revisions of 12 MMBo and 263 Bcf (totaling 56 MMBoe) from the removal of PUD reserves due to changes in anticipated well densities, economics, performance, and other factors, and (iv) downward revisions for oil reserves of 35 MMBo and upward revisions for natural gas reserves of 195 Bcf (netting to 2 MMBoe of downward revisions) due to changes in ownership interests, operating costs, anticipated production, and other factors. Revisions for 2020 are comprised of (i) the removal of 50 MMBo and 345 Bcf (totaling 107 MMBoe) of PUD reserves no longer scheduled to be drilled within five years of initial booking due to a reduction in the scope of future drilling programs based on adverse market conditions, reduced demand, and lower prices caused by the COVID-19 pandemic and our resulting allocation of capital to areas providing the best opportunities to improve efficiencies, recoveries, and rates of return, (ii) downward revisions of 29 MMBo and 172 Bcf (totaling 58 MMBoe) from the removal of PUD reserves due to changes in economics, performance, and other factors, (iii) downward price revisions of 214 MMBo and 1,043 Bcf (totaling 388 MMBoe) due to a significant decrease in average crude oil and natural gas prices in 2020 compared to 2019 resulting from the economic turmoil caused by the COVID-19 pandemic and other factors, and (iv) net upward revisions for oil reserves of 43 MMBo and 31 Bcf (totaling 48 MMBoe) due to changes in ownership interests, operating costs, anticipated production, and other factors. Revisions for 2019 are comprised of (i) the removal of 17 MMBo and 108 Bcf (totaling 35 MMBoe) of PUD reserves no longer scheduled to be drilled within five years of initial booking due to continual refinement of the Company's drilling programs and reallocation of capital to areas providing the greatest opportunities to improve efficiencies, recoveries, and rates of return, (ii) downward revisions of 38 MMBo and 278 Bcf (totaling 85 MMBoe) from the removal of PUD reserves due to changes in economics, performance, and other factors, (iii) downward price revisions of 24 MMBo and 118 Bcf (totaling 43 MMBoe) due to a decrease in average crude oil and natural gas prices in 2019 compared to 2018, and (iv) net downward revisions for oil reserves of 9 MMBo and net upward revisions for natural gas reserves of 139 Bcf (netting to 14 MMBoe of upward revisions) due to changes in ownership interests, operating costs, anticipated production, and other factors. Extensions, discoveries and other additions . Extensions, discoveries and other additions for each of the three years reflected in the table above were due to successful drilling and completion activities and continual refinement of our drilling programs. For 2021, proved reserve additions in the Bakken totaled 140 MMBo and 375 Bcf (totaling 202 MMBoe) and proved reserve additions in Oklahoma totaled 25 MMBo and 860 Bcf (totaling 169 MMBoe). Sales of minerals in place. There were no individually significant dispositions of proved reserves in the three years reflected in the table above. Purchases of minerals in place. Purchases for 2021 primarily represent acquisitions of proved reserves in the Permian Basin and Powder River Basin as discussed in Note 2. Property Acquisitions and Dispositions . Proved reserves acquired in the Permian Basin in 2021 totaled 149 MMBo and 326 Bcf (totaling 203 MMBoe) and proved reserves acquired in the Powder River Basin totaled 26 MMBo and 46 Bcf (totaling 34 MMBoe). There were no individually significant acquisitions of proved reserves in 2019 or 2020. The following reserve information sets forth the estimated quantities of proved developed and proved undeveloped crude oil and natural gas reserves of the Company as of December 31, 2021, 2020 and 2019: December 31, 2021 2020 2019 Proved Developed Reserves Crude oil (MBbl) 424,153 281,906 336,405 Natural Gas (MMcf) 2,901,147 2,073,011 2,226,117 Total (MBoe) 907,678 627,407 707,424 Proved Undeveloped Reserves Crude oil (MBbl) 369,377 215,069 423,782 Natural Gas (MMcf) 2,209,532 1,567,713 2,928,354 Total (MBoe) 737,632 476,355 911,841 Total Proved Reserves Crude oil (MBbl) 793,530 496,975 760,187 Natural Gas (MMcf) 5,110,679 3,640,724 5,154,471 Total (MBoe) 1,645,310 1,103,762 1,619,265 Proved developed reserves are reserves expected to be recovered through existing wells with existing equipment and operating methods. Proved undeveloped reserves are reserves expected to be recovered from new wells on undrilled acreage or from existing wells that require relatively major capital expenditures to recover, including most wells where drilling has occurred but the wells have not been completed. Natural gas is converted to barrels of crude oil equivalent using a conversion factor of six thousand cubic feet per barrel of crude oil based on the average equivalent energy content of natural gas compared to crude oil. Standardized measure of discounted future net cash flows relating to proved crude oil and natural gas reserves The standardized measure of discounted future net cash flows presented in the following table was computed using the 12-month unweighted average of the first-day-of-the-month commodity prices, the costs in effect at December 31 of each year and a 10% discount factor. The Company cautions that actual future net cash flows may vary considerably from these estimates. Although the Company’s estimates of total proved reserves, development costs and production rates were based on the best available information, the development and production of the crude oil and natural gas reserves may not occur in the periods assumed. Actual prices realized, costs incurred and production quantities may vary significantly from those used. Therefore, the estimated future net cash flow computations should not be considered to represent the Company’s estimate of the expected revenues or the current value of existing proved reserves. The following table sets forth the standardized measure of discounted future net cash flows attributable to proved crude oil and natural gas reserves as of December 31, 2021, 2020, and 2019. Discounted future net cash flows attributable to noncontrolling interests are not material relative to the Company's consolidated amounts and are not separately presented below. December 31, In thousands 2021 2020 2019 Future cash inflows $ 67,034,046 $ 21,334,235 $ 49,893,470 Future production costs (18,837,000) (7,750,834) (15,309,672) Future development and abandonment costs (7,751,678) (3,950,752) (10,033,887) Future income taxes (1) (7,862,849) (724,569) (3,351,657) Future net cash flows 32,582,519 8,908,080 21,198,254 10% annual discount for estimated timing of cash flows (15,946,126) (4,254,515) (10,736,613) Standardized measure of discounted future net cash flows $ 16,636,393 $ 4,653,565 $ 10,461,641 (1) Estimated future income taxes were calculated by applying existing statutory tax rates, including any known future changes, to the estimated pre-tax net cash flows related to proved crude oil and natural gas reserves, giving effect to any permanent taxable differences and tax credits, less the tax basis of the properties involved. The U.S. federal statutory tax rate utilized in estimating future income taxes was 21% at December 31, 2021, 2020, and 2019. The weighted average crude oil price (adjusted for location and quality differentials) utilized in the computation of future cash inflows was $62.19, $34.34, and $51.95 per barrel at December 31, 2021, 2020, and 2019, respectively. The weighted average natural gas price (adjusted for location and quality differentials) utilized in the computation of future cash inflows was $3.46, $1.17, and $2.02 per Mcf at December 31, 2021, 2020, and 2019, respectively. Future cash flows are reduced by estimated future costs to develop and produce the proved reserves, as well as certain abandonment costs, based on year-end cost estimates assuming continuation of existing economic conditions. The expected tax benefits to be realized from the utilization of net operating loss carryforwards and tax credits are used in the computation of future income tax cash flows. The changes in the aggregate standardized measure of discounted future net cash flows attributable to proved crude oil and natural gas reserves are presented below for each of the past three years. December 31, In thousands 2021 2020 2019 Standardized measure of discounted future net cash flows at January 1 $ 4,653,565 $ 10,461,641 $ 15,684,817 Extensions, discoveries and improved recoveries, less related costs 2,985,056 187,981 1,649,322 Revisions of previous quantity estimates 816,674 (2,952,489) (1,564,503) Changes in estimated future development and abandonment costs 706,168 4,760,286 1,401,513 Purchases (sales) of minerals in place, net 3,408,365 53,742 49,330 Net change in prices and production costs 9,396,945 (6,912,031) (6,591,347) Accretion of discount 489,273 1,183,993 1,865,034 Sales of crude oil and natural gas produced, net of production costs (4,757,483) (1,806,758) (3,486,103) Development costs incurred during the period 683,212 863,101 1,557,121 Change in timing of estimated future production and other 1,871,903 (2,325,024) (1,690,779) Change in income taxes (3,617,285) 1,139,123 1,587,236 Net change 11,982,828 (5,808,076) (5,223,176) Standardized measure of discounted future net cash flows at December 31 $ 16,636,393 $ 4,653,565 $ 10,461,641 |