Supplementary Information | 12 Months Ended |
Dec. 31, 2013 |
Extractive Industries [Abstract] | ' |
Supplementary Information | ' |
Supplementary Information |
Quarterly data (unaudited) |
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| Quarters Ended |
| March 31 | | June 30 | | September 30 | | December 31 |
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| (In thousands, except per unit amounts) |
2013 | | | | | | | |
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Oil and natural gas sales | $ | 20,176 | | | $ | 21,110 | | | $ | 22,982 | | | $ | 21,468 | |
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Net settlements on derivatives | 673 | | | 709 | | | (1,293 | ) | | 199 | |
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Gain (loss) on unsettled derivatives, net | (1,793 | ) | | 960 | | | (5,501 | ) | | 371 | |
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Total revenues and other | 19,056 | | | 22,779 | | | 16,188 | | | 22,038 | |
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Total expenses (1) | 14,997 | | | 12,241 | | | 11,931 | | | 12,703 | |
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Net income | 4,059 | | | 10,538 | | | 4,257 | | | 9,335 | |
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Limited partners' interest in net income | 3,985 | | | 10,344 | | | 4,179 | | | 9,163 | |
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Net income per limited partner unit (basic) | $ | 0.21 | | | $ | 0.54 | | | $ | 0.22 | | | $ | 0.47 | |
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Net income per limited partner unit (diluted) | $ | 0.21 | | | $ | 0.54 | | | $ | 0.22 | | | $ | 0.47 | |
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2012 | | | | | | | |
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Oil and natural gas sales | $ | 15,507 | | | $ | 13,844 | | | $ | 15,048 | | | $ | 17,162 | |
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Net settlements on derivatives | (134 | ) | | 903 | | | 1,211 | | | 1,730 | |
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Gain (loss) on unsettled derivatives, net | (4,773 | ) | | 14,514 | | | (6,103 | ) | | (1,634 | ) |
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Total revenues and other | 10,600 | | | 29,261 | | | 10,156 | | | 17,258 | |
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Total expenses (1) | 8,938 | | | 6,833 | | | 11,293 | | | 10,349 | |
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Net income (loss) | 1,662 | | | 22,428 | | | (1,137 | ) | | 6,909 | |
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Limited partners' interest in net income (loss) | 1,629 | | | 21,984 | | | (1,115 | ) | | 6,774 | |
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Net income (loss) per limited partner unit (basic) | $ | 0.09 | | | $ | 1.23 | | | $ | (0.06 | ) | | $ | 0.36 | |
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Net income (loss) per limited partner unit (diluted) | $ | 0.09 | | | $ | 1.23 | | | $ | (0.06 | ) | | $ | 0.36 | |
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-1 | Includes the following expenses: lease operating, production taxes, dry holes and abandonments, geological and geophysical, depreciation, depletion and amortization, accretion, and general and administrative. | | | | | | | | | | | | | | |
Supplementary oil and natural gas activities |
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| Year Ended December 31, | | | | |
| 2013 | | 2012 | | 2011 | | | | |
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| (in thousands) | | | | |
Property acquisition costs: | | | | | | | | | |
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Proved | $ | 28,057 | | | $ | 48,578 | | | $ | 15,729 | | | | | |
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Unproved | — | | | — | | | — | | | | | |
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Exploration | — | | | — | | | — | | | | | |
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Development | 22,287 | | | 21,639 | | | 30,754 | | | | | |
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Asset retirement obligations | 879 | | | 679 | | | 686 | | | | | |
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Total costs incurred | $ | 51,223 | | | $ | 70,896 | | | $ | 47,169 | | | | | |
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Estimated proved oil and natural gas reserves (unaudited) |
The proved oil and gas reserves for the years ended December 31, 2013, 2012, and 2011 were prepared by our reservoir engineers and audited by Cawley, Gillespie & Associates, Inc., independent third party petroleum consultants. These reserve estimates have been prepared in compliance with the rules of the SEC. We emphasize that reserve estimates are inherently imprecise and that estimates of new discoveries are more imprecise than those of producing oil and natural gas properties. Accordingly, the estimates are expected to change as future information becomes available. An analysis of the change in estimated quantities of oil and gas reserves, all of which are located within the United States, are presented below for the periods indicated: |
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| Oil | | Gas | | MBoe (1) | | | | | | | |
(MBbls) | (MMcf) | | | | | | | |
Proved developed and undeveloped reserves: | | | | | | | | | | | | |
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As of December 31, 2010 | 7,007 | | | 1,346 | | | 7,231 | | | | | | | | |
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Revisions of previous estimates | 740 | | | (370 | ) | | 678 | | | | | | | | |
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Extensions, discoveries and other additions | 1,704 | | | — | | | 1,704 | | | | | | | | |
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Purchases of minerals in place | 971 | | | 140 | | | 994 | | | | | | | | |
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Sales of minerals in place | (79 | ) | | (276 | ) | | (124 | ) | | | | | | | |
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Production | (407 | ) | | (164 | ) | | (434 | ) | | | | | | | |
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As of December 31, 2011 | 9,936 | | | 676 | | | 10,049 | | | | | | | | |
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Revisions of previous estimates | (784 | ) | | (143 | ) | | (808 | ) | | | | | | | |
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Extensions, discoveries and other additions | 1,572 | | | — | | | 1,572 | | | | | | | | |
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Purchases of minerals in place | 3,028 | | | 18 | | | 3,031 | | | | | | | | |
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Production | (678 | ) | | (122 | ) | | (698 | ) | | | | | | | |
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As of December 31, 2012 | 13,074 | | | 429 | | | 13,146 | | | | | | | | |
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Revisions of previous estimates | 264 | | | 827 | | | 401 | | | | | | | | |
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Extensions, discoveries and other additions | 76 | | | — | | | 76 | | | | | | | | |
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Purchases of minerals in place | 1,207 | | | 193 | | | 1,239 | | | | | | | | |
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Production | (907 | ) | | (128 | ) | | (928 | ) | | | | | | | |
As of December 31, 2013 | 13,714 | | | 1,321 | | | 13,934 | | | | | | | | |
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Proved developed reserves: | | | | | | | | | | | | |
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December 31, 2010 | 3,601 | | | 1,346 | | | 3,825 | | | | | | | | |
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December 31, 2011 | 6,835 | | | 676 | | | 6,948 | | | | | | | | |
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December 31, 2012 | 8,727 | | | 429 | | | 8,799 | | | | | | | | |
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31-Dec-13 | 10,397 | | | 1,321 | | | 10,617 | | | | | | | | |
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Proved undeveloped reserves: | | | | | | | | | | | | |
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December 31, 2010 | 3,406 | | | — | | | 3,406 | | | | | | | | |
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December 31, 2011 | 3,101 | | | — | | | 3,101 | | | | | | | | |
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December 31, 2012 | 4,347 | | | — | | | 4,347 | | | | | | | | |
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31-Dec-13 | 3,317 | | | — | | | 3,317 | | | | | | | | |
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-1 | Estimated quantities of oil and natural gas reserves in Mboe equivalents at a rate of six Mcf per Bbl. | | | | | | | | | | | | | | |
The change in quantities of proved reserves from December 31, 2010 to December 31, 2011 is due to (i) increases in oil prices during this time period, (ii) acquisitions of the War Party I and II Units in the Hugoton Basin, J&A Oil Company interests in the Cushing Field, and third party interests in the Cleveland Field, (iii) infill drilling in our Ardmore West and Twin Forks waterflood units which resulted in an upward revision of oil in place and therefore recoverable reserves, and (iv) revisions of previous estimates for the balance of our properties. |
The change in quantities of proved reserves from December 31, 2011 to December 31, 2012 is due to (i) the acquisitions of additional interests in our Southern Oklahoma units; (ii) the acquisition of additional working interest in our War Party I and II Units in the Hugoton Basin area; (iii), the acquisition of the Clawson Ranch Waterflood Unit in the Hugoton Basin area;, and (iv) the acquisition of additional properties in the Northeastern Oklahoma area. |
The change in quantities of proved reserves from December 31, 2012 to December 31, 2013 is due to the acquisitions of additional interests in our Southern Oklahoma units and Northeastern Oklahoma properties and revisions on prior estimates. |
Estimates of economically recoverable oil and natural gas reserves and of future net revenues are based upon a number of variable factors and assumptions, all of which are to some degree subjective and may vary considerably from actual results. Therefore, actual production, revenues, development and operating expenditures may not occur as estimated. The reserve data are estimates only, are subject to many uncertainties and are based on data gained from production histories and on assumptions as to geologic formations and other matters. Actual quantities of oil and natural gas may differ materially from the amounts estimated. |
Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Natural Gas Reserves (Unaudited) |
The standardized measure represents the present value of estimated future cash inflows from proved oil and gas reserves, less future development, production, plugging and abandonment costs, discounted at the rate prescribed by the SEC. The standardized measure of discounted future net cash flow does not purport to be, nor should it be interpreted to represent, the fair market value of our proved oil and natural gas reserves. The following assumptions have been made: |
•In the determination of future cash inflows, sales prices used for oil and natural gas for the years ended December 31, 2013, 2012 and 2011, were estimated using the average price during the 12-month period, determined as the unweighted arithmetic average of the first-day-of-the-month price for each month in such period. |
•Future costs of developing and producing the proved oil and reserves were based on costs determined at each such period-end, assuming the continuation of existing economic conditions, including abandonment costs. |
•No future income tax expenses are computed for Mid-Con Energy Partners, LP because we are a non-taxable entity. |
•Future net cash flows were discounted at an annual rate of 10%. |
The standardized measure of discounted future net cash flow relating to estimated proved oil and natural gas reserves is presented below for the periods indicated: |
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| Year Ended December 31, | | | | |
| 2013 | | 2012 | | 2011 | | | | |
| (in thousands) | | | | |
Future cash inflows | $ | 1,295,435 | | | $ | 1,191,410 | | | $ | 930,788 | | | | | |
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Future production costs | (542,389 | ) | | (417,362 | ) | | (297,490 | ) | | | | |
Future development costs, including abandonment costs | (49,458 | ) | | (47,490 | ) | | (34,504 | ) | | | | |
Future net cash flow | 703,588 | | | 726,558 | | | 598,794 | | | | | |
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10% discount for estimated timing of cash flow | (312,325 | ) | | (323,136 | ) | | (270,563 | ) | | | | |
Standardized measure of discounted cash flow | $ | 391,263 | | | $ | 403,422 | | | $ | 328,231 | | | | | |
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The prices utilized in calculating our total proved reserves were $96.78, $94.71, and $96.19 per Bbl of oil and $3.67, $2.75 and $4.11 per MMBtu of natural gas for December 31, 2013, 2012, and 2011, respectively. These prices were adjusted by lease for quality, transportation fees, location differentials, marketing bonuses or deductions or other factors affecting the price received at the wellhead. Average adjusted prices used were $93.98, $91.03 and $93.20 per Bbl of oil and $5.00, $2.87 and $7.04 per Mcf of natural gas for December 31, 2013, 2012 and 2011, respectively. Adjusted natural gas price includes the sale of associated natural gas liquids. All wellhead prices are held flat over the life of the properties for all reserve categories. |
Changes in the standardized measure of discounted future net cash flow relating to proved oil and gas reserves is presented below for the periods indicated: |
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| Year Ended December 31, | | | | |
| 2013 | | 2012 | | 2011 | | | | |
Standardized measure of discounted future net cash flow, beginning of period | $ | 403,422 | | | $ | 328,231 | | | $ | 183,662 | | | | | |
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Changes in the year resulting from: | | | | | | | | | |
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Sales, less production costs | (65,553 | ) | | (48,648 | ) | | (27,671 | ) | | | | |
Revisions of previous quantity estimates | 12,006 | | | (26,796 | ) | | 26,960 | | | | | |
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Extensions, discoveries and improved recovery | 1,863 | | | 51,098 | | | 26,128 | | | | | |
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Net change in prices and production costs | (28,324 | ) | | (15,328 | ) | | 79,618 | | | | | |
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Net change in income taxes | — | | | — | | | — | | | | | |
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Changes in estimated future development costs | (17,155 | ) | | (11,515 | ) | | (30,521 | ) | | | | |
Previously estimated development costs incurred during the period | 22,257 | | | 21,629 | | | 31,968 | | | | | |
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Purchases of minerals in place | 38,170 | | | 81,602 | | | 20,200 | | | | | |
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Accretion of discount | 40,342 | | | 32,823 | | | 18,366 | | | | | |
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Timing differences and other | (15,765 | ) | | (9,674 | ) | | (479 | ) | | | | |
Standardized measure of discounted future net cash flow, end of year | $ | 391,263 | | | $ | 403,422 | | | $ | 328,231 | | | | | |
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