COMMITMENTS AND CONTINGENCIES Commitments As of December 31, 2018 , our required remaining lease payments under legacy GAAP, ASC 840, for each fiscal year are as follows. See Note 17 for additional lease disclosures under the new lease standard, ASC 842. ($ in thousands) 2019 $ 892 2020 721 2021 721 2022 721 2023 and thereafter 2,258 Total $ 5,313 As of December 31, 2019 , the Company has an agreement with its equipment manufacturer granting the Company the option to purchase additional 108,000 of DuraStim hydraulic horsepower (HHP), with the purchase option expiring at different times through April 30, 2021. The option fee of $6.1 million , which we have classified as a deposit for property and equipment, will be applied equally towards the purchase price of each additional DuraStim fleet ordered. As of December 31, 2019 , the total outstanding remaining contractual obligations under the purchase agreement for the original DuraStim fleets and related ancillary equipment was $1.7 million . As of December 31, 2019 , other contracted capital commitments entered into as part of normal course of business for supply of certain equipment, including improvement to our corporate office building, was $2.7 million . The Company enters into purchase agreements with its sand suppliers (the Sand suppliers) to secure supply of sand as part of its normal course of business. The agreements with the Sand suppliers require that the Company purchase a minimum volume of sand, constituting substantially all of its sand requirements, from the Sand suppliers, otherwise certain penalties may be charged. Under certain of the purchase agreements, a shortfall fee applies if the Company purchases less than the minimum volume of sand. The shortfall fee represents liquidated damages and is either a fixed percentage of the purchase price for the minimum volumes or a fixed price per ton of unpurchased volumes. Under one of the purchase agreements, the Company is obligated to purchase a specified percentage of its overall sand requirements, or it must pay the supplier the difference between the purchase price of the minimum volumes under the purchase agreement and the purchase price of the volumes actually purchased. Our minimum volume commitments under the purchase agreements are either based on a percentage of our total usage or fixed minimum quantity. O ur agreements with the Sand suppliers expire at different times prior to April 30, 2022. During the years ended December 31, 2019 , 2018 and 2017 , no shortfall fees have been recorded. One of the Sand suppliers (SandCo) we entered into an agreement with to purchase sand (Texas sand) has an indirect relationship with a former executive officer of the Company, because beginning in 2018, the Texas sand was sourced from a mine located on land owned by an entity (LandCo) in which the former executive officer has a 44% noncontrolling equity interest in the LandCo. The total sand purchased from SandCo during the year ended December 31, 2019 and 2018 was approximately $44.3 million and $10.3 million , respectively, and the estimated indirect benefit to the former executive officer of the Company was approximately $1.5 million and $0.4 million , respectively. As of December 31, 2019 and 2018 , the Company had issued letters of credit of $1.5 million and $1.8 million , respectively, under the Company's ABL Credit Facility relating to the Company's casualty insurance policy. During the year ended December 31, 2019 , we recorded severance expense of approximately $2.0 million relating to the resignation of two former executive officers, which was included as part of our general and administrative expense in our statement of operations and the outstanding balance included in accrued liabilities and other current liabilities in our consolidated balance sheet at December 31, 2019 . Contingent Liabilities In September 2019, a complaint, captioned Richard Logan, Individually and On Behalf of All Others Similarly Situated, Plaintiff, v. ProPetro Holding Corp., et al., (the Logan Lawsuit), was filed against the Company and certain of its current and former officers and directors in the U.S. District Court for the Western District of Texas. In April 2020, Lead Plaintiffs Nykredit Porteflje Administration A/S, Oklahoma Firefighters Pension and Retirement System, Oklahoma Law Enforcement Retirement System, Oklahoma Police Pension and Retirement System, and Oklahoma City Employee Retirement System, and additional named plaintiff Police and Fire Retirement System of the City of Detroit, individually and on behalf of a putative class of shareholders who purchased the Companys common stock between March 17, 2017 and March 13, 2020, filed a second amended class action complaint in the U.S. District Court for the Western District of Texas in the Logan Lawsuit, alleging violations of Sections 10(b) and 20(a) of the Exchange Act, as amended, and Rule l0b-5 promulgated thereunder, and Sections 11 and 15 of the Securities Act, as amended, based on allegedly inaccurate or misleading statements, or omissions of material facts, about the Companys business, operations and prospects. In January 2020, Boca Raton Firefighters and Police Pension Fund (Boca Raton) filed a shareholder derivative suit in the U.S. District Court for the Western District of Texas (the Boca Raton Lawsuit) against certain of the Companys current and former officers and directors (the Boca Raton Defendants). The Company was named as a nominal defendant only. The claims include (i) breaches of fiduciary duties, (ii) unjust enrichment and (iii) contribution. Boca Raton did not quantify any alleged damages in its complaint but, in addition to attorneys fees and costs, Boca Raton seeks various forms of relief, including (i) damages sustained by the Company as a result of the Boca Raton Defendants alleged misconduct, (ii) punitive damages and (iii) equitable relief in the form of improvements to the Companys governance and controls. In April 2020, Jye-Chun Chang filed a shareholder derivative suit in the U.S. District Court for the Western District of Texas (the Chang Lawsuit) against certain of the Companys current and former officers and directors (the Chang Defendants). The Company was named as a nominal defendant only. The claims include (i) violations of section 14(a) of the Exchange Act, (ii) breach of fiduciary duties, (iii) unjust enrichment, (iv) abuse of control, (v) gross mismanagement and (vi) waste of corporate assets. Chang did not quantify any alleged damages in its complaint but, in addition to attorneys fees and costs, Chang seeks various forms of relief, including (i) declaring that Chang may sustain the action on behalf of the Company, (ii) declaring that the Chang Defendants breached their fiduciary duties to the Company, (iii) damages sustained by the Company as a result of the Chang Defendants alleged misconduct, (iv) equitable relief in the form of improvements to the Companys governance and controls and (v) restitution. In October 2019, the Company received a letter from the SEC indicating that the SEC had opened an investigation into the Company and requesting that the Company provide certain information and documents, including documents related to the Companys expanded audit committee review and related events. The Company has cooperated and expects to continue to cooperate with the SECs investigation. We are presently unable to predict the duration, scope or result of the Logan Lawsuit, the Boca Raton Lawsuit, the Chang Lawsuit, the SEC investigation, or any other related lawsuit or investigation. As of December 31, 2019 , no provision was made by the Company in connection with these pending lawsuits and the SEC investigation as they are still at early stages and the final outcomes cannot be reasonably estimated. Environmental The Company is subject to various federal, state and local environmental laws and regulations that establish standards and requirements for protection of the environment. The Company cannot predict the future impact of such standards and requirements, which are subject to change and can have retroactive effectiveness. The Company continues to monitor the status of these laws and regulations. Currently, the Company has not been fined, cited or notified of any environmental violations that would have a material adverse effect upon its financial position, liquidity or capital resources. However, management does recognize that by the very nature of the Company's business, material costs could be incurred in the near term to maintain compliance. The amount of such future expenditures is not determinable due to several factors, including the unknown magnitude of possible regulation or liabilities, the unknown timing and extent of the corrective actions which may be required, the determination of the Company's liability in proportion to other responsible parties and the extent to which such expenditures are recoverable from insurance or indemnification. Regulatory Audits In 2019, the Texas Comptroller of Public Accounts commenced a routine audit of the Company's gross receipts and sales, excise and use taxes for the periods of July 2015 through December 2018. As of December 31, 2019 , the audit is still at an early stage and the final outcome cannot be reasonably estimated.