Equity-Based Compensation | 9 Months Ended |
Sep. 30, 2014 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' |
Equity-Based Compensation | ' |
Equity-Based Compensation |
We have a long-term incentive program (the “Long-Term Incentive Program”) for employees, officers, consultants and directors of our general partner and its affiliates, including Mid-Con Energy Operating, LLC (“Mid-Con Energy Operating”), who perform services for us. The Long-Term Incentive Program allows for the award of unit options, unit appreciation rights, unrestricted units, restricted units, phantom units, distribution equivalent rights granted with phantom units, and other types of awards, and it is administered by the members of our general partner (the "Founders") and approved by the Board of Directors of the general partner. The Long-Term Incentive Program permits the grant of awards covering an aggregate of 1,764,000 units under the Form S-8 we filed with the SEC on January 25, 2012. If an employee terminates employment prior to the restriction lapse date, the awarded units are forfeited and canceled and are no longer considered issued and outstanding. The following table shows the number of existing awards and awards available under the Long-Term Incentive Program at September 30, 2014: |
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| | Number of Common Units | |
Approved and authorized awards | | 1,764,000 | | |
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Unrestricted units granted, including vested restricted units | | (866,253 | ) | |
Restricted units granted, net of forfeitures and vesting | | (116,599 | ) | |
Phantom units issued, net of forfeitures | | (25,666 | ) | |
Awards available for future grant | | 755,482 | | |
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Equity Awards |
We account for restricted units as equity awards since these awards will be settled by issuing limited partner units. These restricted units vest over a three-year period and we assume a 10% forfeiture rate. A summary of our restricted units awarded for the nine months ended September 30, 2014 is presented below: |
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Restricted awards: | Number of Restricted Units | | Average Grant Date Fair Value per Unit |
Outstanding at December 31, 2013 | 120,589 | | | |
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Units granted | 53,375 | | | $23.11 |
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Units vested | (44,430 | ) | | $23.09 |
Units forfeited | (12,935 | ) | | $23.52 |
Outstanding at September 30, 2014 | 116,599 | | | |
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We account for unrestricted units as equity awards since these awards will be settled by issuing limited partner units. A summary of our unrestricted units awarded for the nine months ended September 30, 2014 is presented below: |
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Unrestricted awards: | Number of Unrestricted Units | | Average Grant Date Fair Value per Unit |
Unrestricted units granted at December 31, 2013 | 558,773 | | | |
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Unrestricted units granted | 263,050 | | | $23.30 |
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Restricted units vested | 44,430 | | | $23.09 |
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Total unrestricted units at September 30, 2014 | 866,253 | | | |
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We recognized $1.1 million and $7.1 million of total equity-based compensation expense for the three and nine months ended September 30, 2014, respectively, and for the three and nine months ended September 30, 2013 we recognized $0.6 million and $5.6 million of total equity-based compensation expense, respectively. These costs are reported as a component of general and administrative expense in our unaudited condensed consolidated statement of operations. |
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Liability Awards |
We account for phantom units issued during 2013 as liability awards due to the Long-Term Incentive Program’s provision allowing the Board of Directors, at its discretion, to settle the award in either cash or limited partner units. The phantom units are an incentive based equity award that will be issued to employees or members of the board of directors over a three-year vesting period subject to attaining certain production target levels. The phantom units are not eligible to receive quarterly distributions until they vest. The fair value of these phantom units is remeasured at the end of each reporting period based on the current market price of our limited partner units discounted for expected forfeitures and distribution payments during the vesting period in addition to an adjustment related to management's expectation of the Partnership's ability to attain the stated production target levels. These costs are reported as a component of general and administrative expense in our unaudited condensed consolidated statement of operations and are net of estimated forfeitures. These units are subject to forfeiture and we assume a 10% forfeiture rate. From the initial issuance of the the phantom units, we have recorded approximately $0.1 million of compensation expense through September 30, 2014. |
Activity related to these phantom units is as follows: |
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Nonvested phantom awards: | | Number of Units | |
Outstanding at December 31, 2013 | | 43,000 | | |
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Units forfeited | | (17,334 | ) | |
Outstanding at September 30, 2014 | | 25,666 | | |
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Outstanding units not expected to vest | | (16,812 | ) | |
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As of September 30, 2014, there was approximately $1.9 million of unrecognized compensation costs related to non-vested restricted units. The cost is expected to be recognized over a weighted average period of approximately 1.9 years. Additionally, there was approximately $0.1 million of unrecognized compensation costs related to the phantom units based on the closing price of our common units at September 30, 2014. The cost is expected to be recognized over the next 1.7 years. |