COMMITMENTS AND CONTINGENCIES Processing, Transportation and Salt Water Disposal Commitments Firm Commitments From time to time, the Company enters into agreements with third parties whereby the Company commits to deliver anticipated natural gas and oil production and salt water from certain portions of its acreage for gathering, transportation, processing, fractionation, sales and, in the case of salt water, disposal. The Company paid approximately $11.4 million and $6.1 million for deliveries under these agreements during the three months ended June 30, 2020 and 2019, respectively, and $22.4 million and $12.9 million for deliveries under these agreements during the six months ended June 30, 2020 and 2019, respectively. Certain of these agreements contain minimum volume commitments. If the Company does not meet the minimum volume commitments under these agreements, it will be required to pay certain deficiency fees. If the Company ceased operations in the areas subject to these agreements at June 30, 2020, the total deficiencies required to be paid by the Company under these agreements would be approximately $387.9 million, in addition to the commitments described below. Future Commitments In late 2017, the Company entered into a fixed-fee NGL sales agreement whereby the Company committed to deliver its NGL production at the tailgate of the Black River cryogenic natural gas processing plant in Eddy County, New Mexico (the Black River Processing Plant) to a certain counterparty. The Company is committed to deliver a minimum amount of NGLs to the counterparty for seven years following the completion of the counterpartys pipeline extension and fractionation facility, which was completed on July 1, 2020. If the Company does not meet its NGL volume commitment in any quarter during the seven -year commitment period, it would be required to pay a deficiency fee per gallon of NGL below the Companys commitment. The minimum contractual obligation during the seven -year period is approximately $130.6 million. In October 2019, the Company entered into a 15-year, fixed-fee natural gas transportation agreement whereby the Company committed to deliver a portion of the residue gas production at the tailgate of the Black River Processing Plant to transport through the counterpartys pipeline. The agreement begins when the counterpartys pipeline is placed in service, which is anticipated to be in the second half of 2020. Should the pipeline be placed in service, the Company would owe the fees to transport the committed volume whether or not the committed volume is transported through the counterpartys pipeline, and the minimum contractual obligation would be approximately $106.9 million. Delaware Basin  San Mateo In February 2017, the Company dedicated its current and future leasehold interests in the Rustler Breaks and Wolf asset areas pursuant to 15-year, fixed-fee natural gas, oil and salt water gathering agreements and salt water disposal agreements with subsidiaries of San Mateo I. In addition, the Company dedicated its current and future leasehold interests in the Rustler Breaks asset area pursuant to a 15-year, fixed-fee natural gas processing agreement (collectively with the gathering and salt water disposal agreements, the Operational Agreements). San Mateo I provides the Company with firm service under each of the Operational Agreements in exchange for certain minimum volume commitments. The remaining minimum contractual obligation under the Operational Agreements at June 30, 2020 was approximately $150.7 million. In connection with the February 2019 formation of San Mateo II, the Company dedicated to San Mateo II acreage in the Greater Stebbins Area and the Stateline asset area pursuant to 15-year, fixed-fee agreements for oil, natural gas and salt water gathering, natural gas processing and salt water disposal (collectively, the San Mateo II Operational Agreements). San Mateo II will provide the Company with firm service under each of the San Mateo II Operational Agreements in exchange for certain minimum volume commitments. The remaining minimum contractual obligation under the San Mateo II Operational Agreements at June 30, 2020 was approximately $360.2 million. In June 2019, a subsidiary of San Mateo II entered into an agreement with third parties for the engineering, procurement, construction and installation of an expansion of the Black River Processing Plant, including required compression. The expansion is expected to be placed in service in 2020. San Mateo IIs total commitments under this agreement are $81.0 million. San Mateo II paid approximately $12.6 million and $33.7 million under this agreement during the three and six months ended June 30, 2020, respectively. As of June 30, 2020, the remaining obligations of San Mateo II under this agreement were $7.2 million, which are expected to be paid within the next 12 months. Legal Proceedings The Company is a party to several legal proceedings encountered in the ordinary course of its business. While the ultimate outcome and impact on the Company cannot be predicted with certainty, in the opinion of management, it is remote that these legal proceedings will have a material adverse impact on the Companys financial condition, results of operations or cash flows.