Note 16 - Commitments
|12 Months Ended|
Dec. 31, 2019
|Notes to Financial Statements|
|Commitments Disclosure [Text Block]||
7for information on leases.
Pursuant to the Purchase and Sale Agreement with Total E&P, we
mayfulfill security requirements related to ARO for certain properties through securing surety bonds, or through making payments to an escrow account under a formula pursuant to the agreement, or a combination thereof, until certain prescribed thresholds are met. Once the threshold is met for that year, excess funds in the escrow account are returned to us. As of
2019,we had surety bonds related to the agreement with Total E&P totaling
$90.7million and had
noamounts in escrow. The threshold escalates to
$3.0million per year increments.
Pursuant to the Purchase and Sale Agreement with Shell Offshore Inc. (“Shell”) related to ARO for certain properties, we have surety bonds that are subject to re-appraisal by either party. As of
December 31, 2019,neither party had requested a re-appraisal to be made. The current security requirement of
$64.0million, which we have met, could be increased up to
$94.0million depending on certain conditions and circumstances.
Pursuant to the Purchase and Sale Agreement with Exxon related to ARO for certain properties, we were required to obtain
$27.3million of surety bonds. This amount increases on
June 1of the following years to
2024,and future increases in increments ranging
$9.0million per year until the total amount reaches
mayrequest a redetermination with Exxon every
twoyears by providing certain documentation as provided in the purchase agreement. We are required to maintain this scheduled level of bonds until the properties are fully plugged, abandoned, and restored in accordance with applicable laws and regulations.
Pursuant to the Purchase and Sale Agreement with Conoco related to ARO for certain properties, we were required to obtain
$49.0million of surety bonds and are required to maintain this level of bonds until the properties are fully plugged, abandoned, and restored in accordance with applicable laws and regulations.
2017,we had surety bonds primarily related to our decommissioning obligations or ARO. Total expenses related to surety bonds, inclusive of the surety bonds in connection with the Total E&P and Shell agreements described above, were
2017,respectively. The amount of future commitments is dependent on rates charged in the market place and when asset retirements are completed. Estimated future expenses related to surety bonds were based on current market prices and estimates of the timing of asset retirements, of which some wells and structures are estimated to extend to
2065.Future payment estimates are:
thereafter–$52.0million. Future sure
maychange due to a number of factors, including changes and interpretations of regulations by the BOEM.
December 31, 2019,we had
$6.9million of collateral deposits for certain sureties related to certain surety bonds for appeals submitted to the Interior Board of Land Appeals (the “IBLA”).
In conjunction with the purchase of an interest in the Heidelberg field, we assumed contracts with certain pipeline companies that contain minimum quantities obligations that extend to
2018,expense recognized for the difference between the quantities shipped and the minimum obligations was
$2.3million, respectively. As of
December 31, 2019,the estimated future costs are:
nodrilling rig commitments as of
The entire disclosure for significant arrangements with third parties, which includes operating lease arrangements and arrangements in which the entity has agreed to expend funds to procure goods or services, or has agreed to commit resources to supply goods or services, and operating lease arrangements. Descriptions may include identification of the specific goods and services, period of time covered, minimum quantities and amounts, and cancellation rights.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
No definition available.