5.Property, Plant and Equipment

Property, plant and equipment (“PP&E”) is stated at cost, less accumulated depreciation. Depreciation is calculated on a straight-line basis over the estimated useful service life of the asset.

PP&E consists of the following:

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⁽¹⁾ See Abandoned Asset, below.

Depreciation expense was $27.9 million, $23.4 million and $13.4 million for the years ended December 31, 2021, 2020 and 2019, respectively. Property, Plant and Equipment cash expenditures were approximately $74.7 million, $139.6 million and $183.0 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Accrued PP&E additions totaled $5.5 million at December 31, 2021, $13.2 million at December 31, 2020, and $43.5 million at December 31, 2019.

Abandoned Asset

In late third quarter 2021, management completed its evaluation of the performance of a saltwater disposal asset (“SWD well”), located in Eddy County, New Mexico and concluded that the well should be shut-in and taken out of service. We drilled this well in the second quarter of 2017 and encountered technical difficulties requiring significant incremental capital expenditure. The asset was put into service in May of 2018. During July 2021, we re-entered the well bore to address anomalies. After technical testing, management concluded that it was probable that abandoning the asset was the most prudent course of action as the well is unable to remain in service in its current condition. Accordingly, we have removed the cost and the associated accumulated depreciation and recognized a charge of $28.5 million for the remaining net book value of the well. The charge has been reflected in Abandoned Well Costs in the Statements of Operations.

Asset Disposals

We recognized a gain on disposal of assets of $5.8 million for the year ended December 31, 2019. For the year ended December 31, 2019, the asset cost and accumulated depreciation related to these assets were $4.5 million and $0.3 million, respectively, at the time of disposal.

We recognized a loss on disposal of assets of $0.2 million, $0.1 million and $0.7 million for the years ended December 31, 2021, 2020 and 2019, respectively. For the year ended December 31, 2021, the asset cost and accumulated depreciation related to these assets was $0.8 million and $0.3 million, respectively, at the time of disposal, and the salvage value received was $0.3 million. For the year ended December 31, 2020, the asset cost and accumulated depreciation related to these assets was $0.4 million and $0.2 million, respectively, at the time of disposal, and the salvage value received was $0.1 million. For the year ended

December 31, 2019, the asset cost and accumulated depreciation related to these assets was $0.9 million and $0.1 million, respectively at the time of disposal, and the salvage value received was $0.1 million.

Asset Impairment

We recognized a loss on impairment of assets of $1.6 million, $1.0 million and $1.6 million for the years ended December 31, 2021, 2020 and 2019, respectively, which is included in Abandoned Projects. In 2021, the asset cost and accumulated depreciation related to these assets was $1.6 million and $0, respectively at the time of impairment. In 2020, the asset cost and accumulated depreciation related to these assets was $1.0 million and $0, respectively at the time of impairment. In 2019, the asset cost and accumulated depreciation related to these assets was $1.6 million and $0, respectively at the time of impairment.