Commitments and contingencies Legal actions . The Company is a party to proceedings and claims incidental to its business. Assessing contingencies is highly subjective and requires judgment about uncertain future events. When evaluating contingencies related to legal proceedings, the Company may be unable to estimate losses due to a number of factors, including potential defenses, the procedural status of the matter in question, the presence of complex legal and/or factual issues, the ongoing discovery and/or development of information important to the matter. For material matters that the Company believes an unfavorable outcome is reasonably possible, it would disclose the nature of the matter and a range of potential exposure, unless an estimate cannot be made at this time. The Company does not believe that the loss for any other litigation matters and claims that are reasonably possible to occur will have a material adverse effect on its financial position, results of operations or liquidity. The Company will continue to evaluate proceedings and claims involving the Company on a regular basis and will establish and adjust any estimated accruals as appropriate. Severance tax, royalty, joint interest and sales and use tax audits . The Company is subject to routine severance, royalty, joint interest and sales and use tax audits from regulatory bodies and non-operators and makes accruals as necessary for estimated exposure when deemed probable and estimable. Additionally, the Company is subject to various possible contingencies that arise primarily from interpretations affecting the oil and natural gas industry. Such contingencies include differing interpretations as to the prices at which oil and natural gas sales may be made, the prices at which royalty owners may be paid for production from their leases, allowable costs under joint interest arrangements and other matters. Although the Company believes that it has estimated its exposure with respect to the various laws and regulations, administrative rulings and interpretations thereof, adjustments could be required as new interpretations and regulations are issued. Commitments. The Company periodically enters into contractual arrangements under which the Company is committed to expend funds. These contractual arrangements relate to purchase agreements the Company has entered into including water commitment agreements, throughput volume delivery commitments, fixed and variable power commitments, sand commitment agreements and other commitments. The following table summarizes the Companys commitments at June 30, 2020: (in millions) Remaining 2020 $ 17 2021 78 2022 45 2023 38 2024 39 2025 38 Thereafter 86 Total (a) $ 341 (a) Volume delivery commitments included in the table do not include the oil marketing contract discussed in the table below. At June 30, 2020, the Companys delivery commitments covered the following gross volumes of oil and natural gas: Oil (MMBbl) (a) Natural Gas (MMcf) Remaining 2020 22  2021 51 1,634 2022 59 14,597 2023 51 18,838 2024 47 18,884 2025 33 16,425 Thereafter 115 16,425 Total 378 86,803 (a) Included in the table above is an oil marketing contract with a third-party purchaser that requires the Company to deliver fifty thousand barrels of oil per day through September 2024. Leases. The Company leases office space, office equipment, drilling rigs, field equipment and vehicles. Right-of-use assets and lease liabilities are initially recorded at the commencement date based on the present value of lease payments over the lease term. Leased assets may be used in joint operations with other working interest owners. When the Company is the operator in a joint arrangement, the right-of-use assets and lease liabilities are determined on a gross basis. Certain leases contain variable costs above the minimum required payments and are not included in the right-of-use assets or lease liabilities. Options to extend or terminate a lease are included in the lease term when it is reasonably certain the Company will exercise that option. For operating leases, lease cost is recognized on a straight-line basis over the term of the lease. Leases with an initial term of 12 months or less are not recorded on the condensed consolidated balance sheets. The Companys short-term leases are primarily composed of drilling rigs and certain field equipment. During the three months ended June 30, 2020 and 2019, the Companys gross lease costs related to its short-term leases were $54 million and $90 million, respectively, of which $31 million and $64 million, respectively, were capitalized as part of oil and natural gas properties. During the six months ended June 30, 2020 and 2019, the Companys gross lease costs related to its short-term leases were $109 million and $174 million, respectively, of which $66 million and $131 million, respectively, were capitalized as part of oil and natural gas properties. A portion of the gross lease costs was reimbursed to the Company by other working interest owners.