Quarterly report pursuant to Section 13 or 15(d)


6 Months Ended
Jun. 30, 2020
Property, Plant and Equipment [Abstract]  
The major categories of property and equipment and related accumulated depletion, depreciation, amortization ("DD&A") and impairment as of June 30, 2020 and December 31, 2019 are as follows:
June 30, 2020 December 31, 2019
(In thousands)
Oil and natural gas properties $ 10,730,992    $ 10,595,735   
Accumulated DD&A and impairment (8,415,756)   (7,191,957)  
Oil and natural gas properties, net 2,315,236    3,403,778   
Other depreciable property and equipment 91,317    91,198   
Land 5,521    5,521   
Accumulated DD&A (41,708)   (36,703)  
Other property and equipment, net 55,130    60,016   
Property and equipment, net $ 2,370,366    $ 3,463,794   

Under the full cost method of accounting, the Company is required to perform a ceiling test each quarter. The test determines a limit, or ceiling, on the book value of the Company's oil and natural gas properties. At June 30, 2020, the net book value of the Company's oil and gas properties, less related deferred income taxes, was above the calculated ceiling primarily as a result of reduced commodity prices for the period leading up to June 30, 2020. As a result, the Company was required to record impairments of its oil and natural gas properties of $532.9 million and $1.1 billion for the three and six months ended June 30, 2020, respectively. No impairments were required for oil and natural gas properties for the three and six months ended June 30, 2019.
Based on prices for the last nine months and the short-term pricing outlook for the third quarter of 2020, the Company expects to recognize additional full cost impairments in the third quarter of 2020. The amount of any future impairments is difficult to predict as it depends on future commodity prices, production rates, proved reserves, evaluation of costs excluded from amortization, future development costs and production costs. Any future full cost impairments are not expected to have an impact to the Company's future cash flows or liquidity.
General and administrative costs capitalized to the full cost pool represent management’s estimate of costs incurred directly related to exploration and development activities such as geological and other costs associated with overseeing exploration and development activities. All general and administrative costs not directly associated with exploration and development activities are charged to expense as they are incurred. Capitalized general and administrative costs were approximately $8.2 million and $13.6 million for the three and six months ended June 30, 2020, respectively, and $8.8 million and $16.5 million for the three and six months ended June 30, 2019, respectively.
The average depletion rate per Mcfe, which is a function of capitalized costs, future development costs and the related underlying reserves in the periods presented, was $0.73 and $1.00 per Mcfe for the six months ended June 30, 2020 and 2019, respectively.
The following table summarizes the Company’s unevaluated properties excluded from amortization by area at June 30, 2020:
June 30, 2020
(In thousands)
Utica $ 874,886   
MidContinent 687,169   
Other 2,134   
$ 1,564,189   
At December 31, 2019, approximately $1.7 billion of unevaluated properties were not subject to amortization.
The Company evaluates the costs excluded from its amortization calculation at least annually. Individually insignificant unevaluated properties are grouped for evaluation and periodically transferred to evaluated properties over a timeframe consistent with their expected development schedule.
Asset Retirement Obligation
A reconciliation of the Company’s asset retirement obligation for the six months ended June 30, 2020 and 2019 is as follows:
June 30, 2020 June 30, 2019
(In thousands)
Asset retirement obligation, beginning of period $ 60,355    $ 79,952   
Liabilities incurred 1,553    5,153   
Liabilities settled —    (117)  
Liabilities removed due to divestitures (2,033)   —   
Accretion expense 1,496    2,426   
Revisions in estimated cash flows —    1,077   
Asset retirement obligation as of end of period 61,371    88,491