Quarterly report pursuant to Section 13 or 15(d)

Commitments and Contingencies

Commitments and Contingencies
9 Months Ended
Sep. 30, 2018
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
Commitments and Contingencies
Gathering and Intermediate Transportation Commitments
We have long-term agreements with Republic Midstream, LLC (“Republic Midstream”) and Republic Midstream Marketing, LLC (“Republic Marketing” and, together with Republic Midstream, collectively, “Republic”) to provide gathering and intermediate pipeline transportation services for a substantial portion of our crude oil and condensate production in the South Texas region as well as volume capacity support for certain downstream interstate pipeline transportation.
Republic is obligated to gather and transport our crude oil and condensate from within a dedicated area in the Eagle Ford via a gathering system and intermediate takeaway pipeline connecting to a downstream interstate pipeline operated by a third party through 2041. We have a minimum volume commitment (“MVC”) of 8,000 gross barrels of oil per day to Republic through 2031 under the gathering agreement.
Under the marketing agreement, we have a 10-year commitment to sell 8,000 barrels per day of crude oil (gross) to Republic, or to any third party, utilizing Republic Marketing’s capacity on a downstream interstate pipeline.
Excluding the potential impact of the effects of price escalation from commodity price changes, the minimum fee requirements attributable to the MVC under the gathering and transportation agreement are as follows: $2.7 million for the remainder of 2018, $11.7 million for 2019, $13.0 million per year for 2020 through 2025, $7.4 million for 2026, $3.8 million per year for 2027 through 2030 and $2.2 million for 2031.
Drilling, Completion and Other Commitments
As of September 30, 2018, we had contractual commitments with fixed terms for two drilling rigs expiring in November 2018 and February 2019, respectively. Upon the expiration of their original terms, the drilling rig expiring in November 2018 and a third drilling rig that expired in September 2018 were converted from fixed-term commitments to a pad-to-pad basis during November and October 2018, respectively. We also have one-year purchase commitments for the utilization of certain frac services and the purchase of certain materials for completion operations. Both the frac services and materials commitments were effective January 1, 2018. We have approximately $12.3 million of combined obligations associated with these commitments. In May 2018, we committed to a five-year lease for new corporate office facilities that began in August 2018. The minimum lease commitments are as follows: less than $0.1 million for 2018, $0.4 million for 2019, $0.7 million for 2020, $0.7 million for 2021, $0.7 million for 2022, $0.7 million for 2023 and $0.2 million for 2024.
Legal and Regulatory
We are involved, from time to time, in various legal proceedings arising in the ordinary course of business. While the ultimate results of these proceedings cannot be predicted with certainty, our management believes that these claims will not have a material effect on our financial position, results of operations or cash flows. During the nine months ended September 30, 2018, we eliminated a $0.1 million reserve for a litigation matter. As of September 30, 2018, we had AROs of approximately $3.8 million attributable to the plugging of abandoned wells.