Summary Of Significant Accounting Policies (Policy) | 12 Months Ended |
Dec. 31, 2014 |
Summary Of Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation |
|
The consolidated financial statements include the operations of the Partnership and all of its wholly–owned subsidiaries (“we,” “our” or “us”). All intercompany accounts and transactions have been eliminated in consolidation. In the Notes to Consolidated Financial Statements, all dollar and share amounts in tabulations are in thousands of dollars and shares, respectively, unless otherwise indicated. |
|
Use of Estimates | Use of Estimates |
|
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates and judgments on historical experience and on various other assumptions and information that are believed to be reasonable under the circumstances. Estimates and assumptions about future events and their effects cannot be perceived with certainty and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as our operating environment changes. While we believe that the estimates and assumptions used in the preparation of the consolidated financial statements are appropriate, actual results could differ from those estimates. |
|
Cash and Cash Equivalents | Cash and Cash Equivalents |
|
We consider all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. All of our cash and cash equivalents are maintained with several major financial institutions in the United States. Deposits with these financial institutions may exceed the amount of insurance provided on such deposits; however, we regularly monitor the financial stability of these financial institutions and believe that we are not exposed to any significant default risk. |
|
Accounts Receivable | Accounts Receivable |
|
Accounts receivable from oil, natural gas and natural gas liquids sales are recorded at the invoiced amount and do not bear interest. We routinely assess the financial strength of our customers and bad debts are recorded based on an account–by–account review after all means of collection have been exhausted, and the potential recovery is considered remote. |
|
As of December 31, 2014 and 2013, we did not have any reserves for doubtful accounts, and we did not incur any expense related to bad debts. We do not have any off–balance sheet credit exposure related to our customers. |
|
Property and Depreciation | Property and Depreciation |
|
Our oil, natural gas and natural gas liquids producing activities are accounted for under the successful efforts method of accounting. Under this method, exploration costs, other than the costs of drilling exploratory wells, are charged to expense as incurred. Costs that are associated with the drilling of successful exploration wells are capitalized if proved reserves are found. Lease acquisition costs are capitalized when incurred. Capitalized costs associated with unproved properties totaled $117.7 million and $133.8 million as of December 31, 2014 and December 31, 2013, respectively. Costs associated with the drilling of exploratory wells that do not find proved reserves, geological and geophysical costs and costs of certain non–producing leasehold costs are expensed as incurred. For 2014, 2013 and 2012, we recorded dry hole and exploration costs of $6.7 million, $2.4 million and $6.8 million, respectively. |
|
No gains or losses are recognized upon the disposition of proved oil and natural gas properties except in transactions such as the significant disposition of an amortizable base that significantly affects the unit–of–production amortization rate. Sales proceeds are credited to the carrying value of the properties. |
|
The capitalized costs of our producing oil and natural gas properties are depreciated and depleted by the units–of–production method based on the ratio of current production to estimated total net proved reserves as estimated by independent petroleum engineers. Proved developed reserves are used in computing unit rates for drilling and development costs and total proved reserves are used for depletion rates of leasehold and pipeline costs. |
|
Other property is stated at cost less accumulated depreciation, which is computed using the straight–line method based on estimated economic lives ranging from three to 25 years. We expense costs for maintenance and repairs in the period incurred. Significant improvements and betterments are capitalized if they extend the useful life of the asset. |
|
Impairment of Long-Lived Assets | Impairment of Long–Lived Assets |
|
We evaluate our proved oil and natural gas properties and related equipment and facilities for impairment whenever events or changes in circumstances indicate that the carrying amounts of such properties may not be recoverable. The determination of recoverability is made based upon estimated undiscounted future net cash flows. The amount of impairment loss, if any, is determined by comparing the fair value, as determined by a discounted cash flow analysis, with the carrying value of the related asset. For 2014, 2013 and 2012, we recorded impairment charges of $103.3 million, $76.9 million and $32.4 million, respectively, related to proved oil and natural gas properties as the carrying amounts of such properties were determined not to be recoverable (see Note 8). |
|
Unproved oil and natural gas properties are assessed periodically on a property–by–property basis, and any impairment in value is recognized. For 2014, 2013 and 2012, we recorded leasehold impairment charges of $10.7 million, $8.5 million and $2.1 million, respectively, related to unproved oil and natural gas properties. |
|
Restricted Cash | Restricted Cash |
|
Restricted cash represents proceeds from the sale of certain oil and natural gas properties we deposited with a qualified intermediary to facilitate like–kind exchange transactions pursuant to Section 1031 of the Internal Revenue Code. |
|
Investments in Unconsolidated Affiliates | Investments in Unconsolidated Affiliates |
|
We account for our investments in unconsolidated affiliates using the equity method of accounting. Accordingly, we recognize our proportionate share of their earnings or losses in the period in which they are reported in their financial statements rather than in the period in which they declare a dividend. Dividends received from these unconsolidated affiliates decrease the carrying amount of our investments. |
|
Asset Retirement Obligations | Asset Retirement Obligations |
|
An asset retirement obligation (“ARO”) represents the future abandonment costs of tangible assets, such as wells, service assets, and other facilities. We record an ARO and capitalize the asset retirement cost in oil and natural gas properties in the period in which the retirement obligation is incurred based upon the fair value of an obligation to perform site reclamation, dismantle facilities or plug and abandon wells. After recording these amounts, the ARO is accreted to its future estimated value using an assumed cost of funds and the additional capitalized costs are depreciated on a unit–of–production basis. If the ARO is settled for an amount other than the recorded amount, a gain or loss is recognized. |
|
Revenue Recognition | Revenue Recognition |
|
Oil, natural gas and natural gas liquids revenues are recognized when production is sold to a purchaser at fixed or determinable prices, when delivery has occurred and title has transferred and collectability of the revenue is reasonably assured. We follow the sales method of accounting for natural gas revenues. Under this method of accounting, revenues are recognized based on volumes sold, which may differ from the volume to which we are entitled based on our working interest. An imbalance is recognized as a liability only when the estimated remaining reserves will not be sufficient to enable the under–produced owner(s) to recoup its entitled share through future production. Under the sales method, no receivables are recorded where we have taken less than our share of production. There were no significant gas imbalances at December 31, 2014 or 2013. |
|
We own and operate a network of natural gas gathering systems in the Monroe field in Northern Louisiana which gather and transport owned natural gas and a small amount of third party natural gas to intrastate, interstate and local distribution pipelines. Natural gas gathering and transportation revenue is recognized when the natural gas has been delivered to a custody transfer point. |
|
Income Taxes | Income Taxes |
|
We are a partnership that is not taxable for federal income tax purposes. As such, we do not directly pay federal income tax. As appropriate, our taxable income or loss is includable in the federal income tax returns of our partners. Since we do not have access to information regarding each partner’s tax basis, we cannot readily determine the total difference in the basis of our net assets for financial and tax reporting purposes. |
|
We record our obligations under the Texas gross margin tax as “Income taxes” in our consolidated statement of operations. |
|
Net Income Per Limited Partner Unit | Net Income per Limited Partner Unit |
|
Our partnership agreement contains incentive distribution rights. Accordingly, net income used in the determination of net income per limited partner unit for the current reporting period is to be reduced by the amount of available cash that will be distributed to the limited partners, the general partner and the holders of the incentive distribution rights for that reporting period. The undistributed earnings, if any, are then allocated to the limited partners, the general partner and the holders of the incentive distribution rights in accordance with the terms of the partnership agreement. Our partnership agreement does not allow for the distribution of undistributed earnings to the holders of the incentive distribution rights, as it limits distributions to the holders of the incentive distribution rights to available cash as defined in the partnership agreement. Basic and diluted net income per limited partner unit is determined by dividing net income, after deducting the amount allocated to the general partner and the holders of the incentive distribution rights, by the weighted average number of outstanding limited partner units during the period. |
|
Derivatives | Derivatives |
|
We monitor our exposure to various business risks, including commodity price and interest rate risks, and use derivatives to manage the impact of certain of these risks. Our policies do not permit the use of derivatives for speculative purposes. We use energy derivatives for the purpose of mitigating risk resulting from fluctuations in the market price of oil, natural gas and natural gas liquids. |
|
We have elected not to designate our derivatives as hedging instruments. Changes in the fair value of derivatives are recorded immediately to earnings as “Gain (loss) on derivatives, net” in our consolidated statements of operations. |
|
Concentration of Credit Risk | Concentration of Credit Risk |
|
All of our derivative contracts are with major financial institutions who are also lenders under our credit facility. Should one of these financial counterparties not perform, we may not realize the benefit of some of our derivative contracts and we could incur a loss. As of December 31, 2014, all of our counterparties have performed pursuant to their derivative contracts. |
|
Our oil, natural gas and natural gas liquids revenues are derived principally from uncollateralized sales to numerous companies in the oil and natural gas industry; therefore, our customers may be similarly affected by changes in economic and other conditions within the industry. We have experienced no significant credit losses on such sales in the past. |
|
In 2014, 2013 and 2012, no customer accounted for greater than 10% of our consolidated oil, natural gas and natural gas liquids revenues. We believe that the loss of a major customer would have a temporary effect on our revenues but, that over time, we would be able to replace our major customers. |
|
Recent Accounting Standards | |
Recent Accounting Standards |
|
In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014–08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This ASU amends the definition of a discontinued operation and requires entities to provide additional disclosures about disposal transactions that do not meet the discontinued operations criteria. This ASU requires discontinued operations treatment for disposals of a component or group of components that represent a strategic shift that has or will have a major impact on an entity’s operations or financial results. The provisions of ASU 2014–08 are applicable to annual reporting periods beginning after December 15, 2014 and interim periods within those annual periods. Early adoption is permitted for any annual or interim period for which an entity’s financial statements have not yet been previously issued or made available for issuance. We chose to adopt ASU 2014–08 as of September 30, 2014. There was no material impact on our consolidated financial statements. |
|
In May 2014, the FASB issued ASU No. 2014–09, Revenue from Contracts with Customers. This ASU will supersede virtually all of the revenue recognition guidance in generally accepted accounting principles in the United States. The core principle of the five–step model is that an entity will recognize revenue when it transfers control of goods or services to customers at an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. Entities can choose to apply the standard using either the full retrospective approach or a modified retrospective approach. The provisions of ASU 2014–09 are applicable to annual reporting periods beginning after December 15, 2016 and interim periods within those annual periods. We have not yet determined the effect that adopting this ASU will have on our consolidated financial statements. |
|
In August 2014, the FASB issued AU No. 2014–15, Presentation of Financial Statements – Going Concern. This ASU amends the accounting guidance for the presentation and disclosure of uncertainties about an entity’s ability to continue as a going concern. It requires management to evaluate and disclose whether there is substantial doubt about its ability to continue as a going concern. Management should consider relevant conditions or events that are known or reasonably known on the date the financial statements are issued. The provisions of ASU 2014–15 are applicable to annual reporting periods beginning after December 15, 2016 and interim periods within those annual periods. We do not expect that adopting this ASU will have a material impact on our consolidated financial statements. |
|
No other new accounting pronouncements issued or effective during the year ended December 31, 2014 have had or are expected to have a material impact on our consolidated financial statements. |
|
Subsequent Event | Subsequent Event |
|
In February 2015, we amended our credit facility to include, among other things, an extension of the facility to February 2020, as well as an extension of our senior secured debt to earnings plus interest expense, taxes, depreciation, depletion and amortization expense and exploration expense (“EBITDAX”) covenant to March 31, 2016. In addition, the borrowing base under the facility was decreased to $650.0 million. |
|
We evaluated subsequent events for appropriate accounting and disclosure through the date these consolidated financial statements were issued. |
|