Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |||
Sep. 30, 2014 | Nov. 03, 2014 | Nov. 03, 2014 | Nov. 03, 2014 | |
Common Units | Subordinated Units | General Partnership Units | ||
Document Information [Line Items] | ' | ' | ' | ' |
Entity Registrant Name | 'New Source Energy Partners L.P. | ' | ' | ' |
Document Type | '10-Q | ' | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 16,160,381 | 2,205,000 | 155,102 |
Amendment Flag | 'false | ' | ' | ' |
Entity Central Index Key | '0001560443 | ' | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' | ' |
Entity Voluntary Filers | 'No | ' | ' | ' |
Entity Filer Category | 'Non-accelerated Filer | ' | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' | ' |
Document Period End Date | 30-Sep-14 | ' | ' | ' |
Document Fiscal Year Focus | '2014 | ' | ' | ' |
Document Fiscal Period Focus | 'Q3 | ' | ' | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash | $5,696 | $7,291 |
Restricted cash | 25 | 0 |
Accounts receivable | 40,492 | 12,609 |
Other current assets | 7,867 | 1,114 |
Total current assets | 54,080 | 21,014 |
Oil and natural gas properties, at cost using full cost method of accounting: | ' | ' |
Proved oil and natural gas properties | 329,864 | 291,829 |
Less: Accumulated depreciation, depletion, and amortization | -148,427 | -128,961 |
Total oil and natural gas properties, net | 181,437 | 162,868 |
Property and equipment, net | 63,281 | 8,166 |
Intangible assets, net | 89,813 | 35,009 |
Goodwill | 43,534 | 23,974 |
Other assets | 2,379 | 3,679 |
Total assets | 434,524 | 254,710 |
Current liabilities: | ' | ' |
Accounts payable and accrued liabilities | 12,636 | 3,267 |
Accounts payable-related parties | 5,103 | 8,221 |
Factoring payable | 15,526 | 1,907 |
Contingent consideration payable | 36,854 | 0 |
Derivative contracts | 608 | 3,167 |
Current portion of long-term debt | 21,132 | 719 |
Total current liabilities | 91,859 | 17,281 |
Long-term debt | 96,301 | 80,014 |
Contingent consideration payable to related parties | 0 | 6,320 |
Asset retirement obligations | 3,877 | 3,455 |
Other liabilities | 396 | 387 |
Total liabilities | 192,433 | 107,457 |
Commitments and contingencies (Note 14) | ' | ' |
Unitholders' equity: | ' | ' |
Common units (15,440,381 units issued and outstanding at September 30, 2014 and 9,599,578 units issued and outstanding at December 31, 2013) | 257,876 | 151,773 |
Common units held in escrow | -8,227 | 0 |
Subordinated units (2,205,000 units issued and outstanding at September 30, 2014 and December 31, 2013) | -21,582 | -17,334 |
General partner's units (155,102 units issued and outstanding at September 30, 2014 and December 31, 2013) | -1,473 | -1,174 |
Total New Source Energy Partners L.P. unitholders' equity | 226,594 | 133,265 |
Noncontrolling interest | 15,497 | 13,988 |
Total unitholders' equity | 242,091 | 147,253 |
Total liabilities and unitholders' equity | $434,524 | $254,710 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) | Sep. 30, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Common units outstanding (in Shares) | 15,440,381 | 9,599,578 |
Common units issued (in Shares) | 15,440,381 | 9,599,578 |
Subordinated units outstanding (in Shares) | 2,205,000 | 2,205,000 |
Subordinated units issued (in Shares) | 2,205,000 | 2,205,000 |
General partner's capital units outstanding (in Shares) | 155,102 | 155,102 |
General partner's capital units, issued (in Shares) | 155,102 | 155,102 |
Condensed_Statements_of_Operat
Condensed Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
Revenues: | ' | ' | ' | ' | ||||
Oil sales | $3,798 | $2,044 | $12,146 | $4,879 | ||||
Natural gas sales | 3,711 | 2,582 | 12,928 | 7,031 | ||||
NGL sales | 8,052 | 7,805 | 26,056 | 20,530 | ||||
Oilfield services | 40,863 | 0 | 59,539 | 0 | ||||
Total revenues | 56,424 | 12,431 | 110,669 | 32,440 | ||||
Operating costs and expenses: | ' | ' | ' | ' | ||||
Oil, natural gas and NGL production | 4,894 | 3,428 | 13,913 | 8,702 | ||||
Production taxes | 668 | 557 | 2,339 | 1,996 | ||||
Cost of providing oilfield services | 24,315 | 0 | 34,849 | 0 | ||||
Depreciation, depletion and amortization | 17,760 | 4,913 | 37,329 | 11,686 | ||||
Accretion | 77 | 59 | 219 | 145 | ||||
General and administrative | 13,785 | 1,353 | 22,835 | 11,452 | [1] | |||
Total operating costs and expenses | 61,499 | 10,310 | 111,484 | 33,981 | ||||
Operating (loss) income | -5,075 | 2,121 | -815 | -1,541 | ||||
Other income (expense): | ' | ' | ' | ' | ||||
Interest expense | -1,458 | -654 | -3,442 | -3,220 | ||||
Gain (loss) on derivative contracts, net | 3,768 | [2] | -3,453 | [2] | -760 | [2] | -2,597 | [2] |
Gain on investment in acquired business | 0 | 0 | 2,298 | 0 | ||||
Other income | 11 | 0 | 18 | 0 | ||||
Loss before income taxes | -2,754 | -1,986 | -2,701 | -7,358 | ||||
Income tax benefit | 0 | 0 | 0 | 12,126 | ||||
Net (loss) income | -2,754 | -1,986 | -2,701 | 4,768 | ||||
Less: net income attributable to noncontrolling interest | 242 | 0 | 242 | 0 | ||||
Net (loss) income | -2,996 | -1,986 | -2,943 | 4,768 | ||||
General Partnership Units | ' | ' | ' | ' | ||||
Other income (expense): | ' | ' | ' | ' | ||||
Net (loss) income | ' | ' | -29 | ' | ||||
Net loss per unit: | ' | ' | ' | ' | ||||
Basic and diluted income per unit (in usd per unit) | ($0.17) | ($0.22) | ($0.19) | ($0.19) | ||||
Subordinated Units | ' | ' | ' | ' | ||||
Other income (expense): | ' | ' | ' | ' | ||||
Net (loss) income | ' | ' | -411 | ' | ||||
Net loss per unit: | ' | ' | ' | ' | ||||
Basic and diluted income per unit (in usd per unit) | ($0.17) | ($0.22) | ($0.19) | ($0.20) | ||||
Common Units | ' | ' | ' | ' | ||||
Other income (expense): | ' | ' | ' | ' | ||||
Net (loss) income | ' | ' | ($2,503) | ' | ||||
Net loss per unit: | ' | ' | ' | ' | ||||
Basic and diluted income per unit (in usd per unit) | ($0.17) | ($0.22) | ($0.20) | ($0.01) | ||||
[1] | Includes $7.7 million of compensation expense related to common units granted to consultants, officers, directors and employees in conjunction with our initial public offering. | |||||||
[2] | Included in gain (loss) on derivative contracts for the three months ended September 30, 2014 and 2013 are net cash payments upon contract settlement of $0.3 million and $0.5 million, respectively. Included in loss on derivative contracts for the nine months ended September 30, 2014 and 2013 are net cash payments upon contract settlement of $3.8 million and $0.9 million, respectively. |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Unitholders' Equity (Unaudited) (USD $) | Total | Common | Subordinated | General Partnership | Noncontrolling Interest |
In Thousands, except Share data, unless otherwise specified | |||||
Beginning Balance at Dec. 31, 2013 | $147,253 | $151,773 | ($17,334) | ($1,174) | $13,988 |
Beginning Balance (in units) at Dec. 31, 2013 | ' | 9,599,578 | 2,205,000 | 155,102 | ' |
Increase (Decrease) in Partners' Capital [Roll Forward] | ' | ' | ' | ' | ' |
Issuance of common units, net of offering costs (in units) | ' | 3,450,000 | ' | ' | ' |
Issuance of common units, net of offering costs | 76,191 | 76,191 | ' | ' | ' |
Offering cost related to 2013 private placement paid in 2014 | -100 | -100 | ' | ' | ' |
Issuance of common units in acquisitions (in units) | ' | 1,964,957 | ' | ' | ' |
Issuance of common units in acquisitions | 45,447 | 43,938 | ' | ' | 1,509 |
Equity-based compensation (in units) | ' | 425,846 | ' | ' | ' |
Equity-based compensation | 1,906 | 1,906 | ' | ' | ' |
Distributions to unitholders | -25,905 | -21,556 | -3,837 | -270 | -242 |
Net (loss) income | -2,701 | -2,503 | -411 | -29 | 242 |
Ending Balance at Sep. 30, 2014 | $242,091 | $249,649 | ($21,582) | ($1,473) | $15,497 |
Ending Balance (in units) at Sep. 30, 2014 | ' | 15,440,381 | 2,205,000 | 155,102 | ' |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flow (Unaudited) (USD $) | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | ||
Cash Flows from Operating Activities: | ' | ' | ||
Net (loss) income | ($2,701) | $4,768 | ||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ' | ' | ||
Depreciation, depletion and amortization | 37,329 | 11,686 | ||
Accretion | 219 | 145 | ||
Amortization of deferred loan costs | 451 | 358 | ||
Write off of loan costs due to debt refinancing | 0 | 1,436 | ||
Equity-based compensation | 1,906 | 7,738 | ||
Deferred income tax benefit | 0 | -12,023 | ||
Change in fair value of contingent consideration | 4,493 | 0 | ||
Gain on investment in acquired business | -2,298 | 0 | ||
Loss on derivative contracts, net | 760 | [1] | 2,597 | [1] |
Cash paid on settlement of derivative contracts | -3,750 | -878 | ||
Payments for premiums on derivatives | 0 | -1,334 | ||
Changes in operating assets and liabilities: | ' | ' | ||
Accounts receivable | -4,533 | -9,673 | ||
Other current assets and other assets | -3,582 | -160 | ||
Accounts payable and accrued liabilities | -1,893 | 5,020 | ||
Net cash provided by operating activities | 26,401 | 9,680 | ||
Cash Flows from Investing Activities: | ' | ' | ||
Acquisitions, net of cash acquired | -63,446 | -15,957 | ||
Additions to oil and natural gas properties | -20,845 | -18,261 | ||
Additions to other property and equipment | -6,726 | 0 | ||
Net cash used in investing activities | -91,017 | -34,218 | ||
Cash Flows from Financing Activities: | ' | ' | ||
Proceeds from borrowings | 22,544 | 69,500 | ||
Payments on borrowings | -8,401 | -95,000 | ||
Bank overdraft | 281 | 0 | ||
Proceeds from financing | 527 | 0 | ||
Proceeds from borrowings, net - related party | 300 | 0 | ||
Payments for deferred loan costs | -437 | -1,762 | ||
Payments on factoring payable, net | -2,221 | 0 | ||
Proceeds from sales of common units, net of offering costs | 76,191 | 77,880 | ||
Payments of offering costs | -100 | 0 | ||
Distribution to unitholders | -25,663 | -7,527 | ||
Distribution to NSEC | 0 | -18,295 | ||
Net cash provided by financing activities | 63,021 | 24,796 | ||
Net change in cash and cash equivalents | -1,595 | 258 | ||
Cash and cash equivalents, beginning of period | 7,291 | 0 | ||
Cash and cash equivalents, end of period | 5,696 | 258 | ||
Supplemental Cash Flow Information: | ' | ' | ||
Cash paid for interest | 2,999 | 1,476 | ||
Non-cash Investing and Financing Activities: | ' | ' | ||
Capitalized asset retirement obligation | 203 | 1,403 | ||
Decrease in accrued capital expenditures | -1,561 | -258 | ||
Accounts receivable distributed to NSEC | 0 | -7,014 | ||
Accounts payable assumed by NSEC | 0 | -1,742 | ||
Subordinated note issued to NSEC for oil and natural gas properties | 0 | 25,000 | ||
Common units issued in connection with acquisitions | -45,447 | ' | ||
Acquisition of property and equipment by financing | 6,707 | 0 | ||
Factoring payables assumed in connection with acquisitions | 15,840 | 0 | ||
Debt assumed in connection with acquisitions | 17,571 | 0 | ||
2014 Acquisitions | ' | ' | ||
Non-cash Investing and Financing Activities: | ' | ' | ||
Common units issued in connection with acquisitions | -46,239 | -27,983 | ||
Noncontrolling Interest | ' | ' | ||
Cash Flows from Operating Activities: | ' | ' | ||
Net (loss) income | 242 | ' | ||
Non-cash Investing and Financing Activities: | ' | ' | ||
Distributions payable | 242 | 0 | ||
Common units issued in connection with acquisitions | ($1,509) | ' | ||
[1] | Included in gain (loss) on derivative contracts for the three months ended September 30, 2014 and 2013 are net cash payments upon contract settlement of $0.3 million and $0.5 million, respectively. Included in loss on derivative contracts for the nine months ended September 30, 2014 and 2013 are net cash payments upon contract settlement of $3.8 million and $0.9 million, respectively. |
Basis_of_Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Basis of Presentation | ' |
Basis of Presentation | |
Nature of Business. We are a vertically integrated independent energy partnership formed in October 2012. The Partnership is engaged in the development and production of onshore oil and natural gas properties that extend across conventional resource reservoirs in east-central Oklahoma. Our oil and natural gas properties consist of non-operated working interests primarily in the Misener-Hunton formation, or Hunton formation. In addition, the Partnership is engaged in oilfield services through its oilfield services subsidiaries. Our oilfield services business provides full service blowout prevention installation and pressure testing services, including certain ancillary equipment necessary to perform such services, throughout the Mid-Continent region and in South Texas and West Texas. In June 2014, we acquired oilfield services companies that specialize in providing well testing and flowback services to the oil and natural gas industry primarily in Oklahoma, Texas, Pennsylvania and Ohio. | |
Principles of Consolidation. The unaudited condensed consolidated financial statements include the accounts of the Partnership and its wholly owned and majority owned subsidiaries. Noncontrolling interest represents third-party ownership interest in a majority owned subsidiary of the Partnership and is included as a component of equity in the consolidated balance sheet and consolidated statement of unitholders' equity. All significant intercompany accounts and transactions have been eliminated in consolidation. | |
Interim Financial Statements. The accompanying condensed consolidated financial statements as of December 31, 2013 have been derived from the audited financial statements contained in the Partnership’s 2013 Form 10-K. The unaudited interim condensed consolidated financial statements have been prepared by the Partnership in accordance with the accounting policies stated in the audited consolidated financial statements contained in the 2013 Form 10-K. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted, although the Partnership believes that the disclosures contained herein are adequate to make the information presented not misleading. In the opinion of management, all adjustments, which consist only of normal recurring adjustments, necessary to state fairly the information in the Partnership’s accompanying unaudited condensed consolidated financial statements have been included. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the 2013 Form 10-K. | |
Significant Accounting Policies. For a description of the Partnership’s significant accounting policies, refer to Note 1 of the consolidated financial statements included in the 2013 Form 10-K. | |
Reclassifications. Certain reclassifications have been made to the prior period financial statements to conform to the current period presentation. These reclassifications have no effect on the Partnership's previously reported results of operations. | |
Use of Estimates. The preparation of the Partnership’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities that exist at the date of the Partnership’s consolidated financial statements, as well as the reported amounts of revenue and expenses during the reporting periods. The Partnership’s consolidated financial statements are based on a number of significant estimates, including oil, natural gas and NGL reserves, revenue and expense accruals, depreciation, depletion and amortization, fair value of derivative instruments and contingent consideration, the allocation of purchase price to the fair value of assets acquired and liabilities assumed and asset retirement obligations. Actual results could differ from those estimates. | |
Recently Issued Accounting Standard. In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers, ("ASU 2014-09"), which revises the guidance on revenue recognition by providing a single, principles-based method for companies to use to account for revenue arising from contracts with customers. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires disclosures enabling users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014-09 is effective for fiscal years beginning after December 15, 2016 and is to be applied retrospectively. Early application is not permitted. We are in the process of assessing the potential impact of ASU 2014-09 on the Partnership's financial statements. |
Acquisitions
Acquisitions | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Business Combinations [Abstract] | ' | |||||||
Acquisitions | ' | |||||||
Acquisitions | ||||||||
The Partnership completed acquisitions during 2013 and 2014, as described below. Certain of the 2013 acquisitions increased the Partnership's portfolio of oil and natural gas properties. The acquisitions of MCE, Erick Flowback Services LLC ("EFS"), Rod's Production Services, L.L.C. ("RPS") and MidCentral Completion Services, LLC ("MCCS") established the Partnership's oilfield services segment, which helps to facilitate the Partnership's goals of becoming a more fully integrated oil and natural gas partnership. With the exception of the acquisition of oil and natural gas properties from Orion Exploration Partners, LLC, all of the 2013 acquisitions were with related parties. The acquisition of MCCS was the only acquisition in 2014 with related parties. See Note 11 "Related Party Transactions." | ||||||||
The fair value measurements of assets acquired and liabilities assumed are based on inputs that are not observable in the market and therefore represent Level 3 inputs under the fair value hierarchy as described in Note 7 "Fair Value Measurements." Fair value may be estimated using comparable market data, a discounted cash flow method, or another method as discussed below. In the discounted cash flow method, estimated future cash flows are based on management’s expectations for the future and include estimates of applicable sales estimates, operational costs and a risk-adjusted discount rate. The fair values of oil and natural gas properties and asset retirement obligations were measured using valuation techniques that convert future cash flows to a single discounted amount. Significant inputs to the valuation of oil and natural gas properties included estimates of: (i) reserves, including risk adjustments for probable and possible reserves; (ii) production rates; (iii) future operating and development costs; (iv) future commodity prices; (v) future cash flows; and (vi) a market-based weighted average cost of capital rate. Fair value of MCCS' inventory acquired was determined based on a comparative sales approach. Fair value for intangible assets acquired was primarily determined using a discounted cash flow model or multi-period excess earnings model under the income approach, which factors in discount rates, probability factors and forecasts. The fair values of property, plant and equipment acquired were primarily based on a cost approach using an indirect cost methodology to determine replacement cost. The inputs, as noted above, used to determine fair value required significant judgments and estimates by the Partnership’s management at the time of the valuation and are the most sensitive and subject to change. Carrying value for current assets and liabilities acquired is typically representative of fair value due to their short term nature. | ||||||||
2013 Acquisitions | ||||||||
March Acquired Properties. In March 2013, we acquired certain oil and natural gas properties located in the Golden Lane and Luther fields in Oklahoma from New Source, Scintilla, and W.K. Chernicky, LLC, for an aggregate adjusted purchase price of approximately $28.0 million (the "March Acquired Properties"). As consideration, the Partnership issued 1,378,500 common units valued at $20.30 per unit. | ||||||||
The total purchase price allocated to the assets acquired and liabilities assumed based upon fair value on the date of acquisition is as follows (in thousands): | ||||||||
Fair value of assets acquired and liabilities assumed: | ||||||||
Proved oil and natural gas properties | $ | 29,049 | ||||||
Other assets | 754 | |||||||
Asset retirement obligations | (1,333 | ) | ||||||
Other liabilities | (488 | ) | ||||||
Total net assets | $ | 27,982 | ||||||
May Acquired Properties. In May 2013, the Partnership completed an acquisition of certain oil and natural gas properties located in Oklahoma from NSEC for approximately $7.9 million, net of purchase price adjustments (the "May Acquired Properties"). | ||||||||
The total purchase price allocated to the assets acquired and liabilities assumed based upon fair value on the date of acquisition is as follows (in thousands): | ||||||||
Fair value of assets acquired and liabilities assumed: | ||||||||
Proved oil and natural gas properties | $ | 8,165 | ||||||
Asset retirement obligations | (19 | ) | ||||||
Other liabilities | (254 | ) | ||||||
Total net assets | $ | 7,892 | ||||||
July Scintilla Acquired Properties. In July 2013, the Partnership completed an acquisition of a 10% working interest in certain oil and natural gas properties located in Oklahoma from Scintilla for approximately $4.9 million, net of purchase price adjustments. | ||||||||
The total purchase price allocated to the assets acquired and liabilities assumed based upon fair value on the date of acquisition is as follows (in thousands): | ||||||||
Fair value of assets acquired and liabilities assumed: | ||||||||
Proved oil and natural gas properties | $ | 4,888 | ||||||
Asset retirement obligations | (4 | ) | ||||||
Other liabilities | (18 | ) | ||||||
Total net assets | $ | 4,866 | ||||||
Orion Acquired Properties. In July 2013, the Partnership acquired certain oil and natural gas properties located in Oklahoma from Orion Exploration Partners, LLC for approximately $3.2 million, net of purchase price adjustments. | ||||||||
The total purchase price allocated to the assets acquired and liabilities assumed based upon fair value on the date of acquisition is as follows (in thousands): | ||||||||
Fair value of assets acquired and liabilities assumed: | ||||||||
Proved oil and natural gas properties | $ | 3,274 | ||||||
Asset retirement obligations | (24 | ) | ||||||
Other liabilities | (20 | ) | ||||||
Total net assets | $ | 3,230 | ||||||
The amounts of revenues and excess of revenues over direct operating expenses included in the accompanying unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2013 generated by the March Acquired Properties, the May Acquired Properties, the July Scintilla Acquired Properties and the Orion Acquired Properties are shown in the table below. Direct operating expenses include lease operating expenses and production taxes. | ||||||||
Three Months Ended September 30, 2013 | Nine Months Ended September 30, 2013 | |||||||
(in thousands) | ||||||||
Revenue | $ | 4,197 | $ | 6,974 | ||||
Excess of revenues over direct operating expenses | $ | 2,180 | $ | 3,350 | ||||
Acquisition expense related to the acquisitions as of September 30, 2013 of $0.5 million and $1.0 million were included in general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2013, respectively. | ||||||||
Southern Dome Acquired Properties. In October 2013, the Partnership completed the acquisition of working interests in 25 producing wells and related undeveloped leasehold rights in the Southern Dome field in Oklahoma County, Oklahoma (the "Southern Dome Acquired Properties") from Scintilla for total consideration of $14.5 million, net of purchase price adjustments. | ||||||||
The total purchase price allocated to the assets acquired and liabilities assumed based upon fair value on the date of acquisition is as follows (in thousands): | ||||||||
Consideration: | ||||||||
Cash | $ | 4,260 | ||||||
Fair value of common units granted (1) | 8,608 | |||||||
Contingent consideration (2) | 1,600 | |||||||
Total fair value of consideration | $ | 14,468 | ||||||
Fair value of assets acquired and liabilities assumed: | ||||||||
Proved oil and natural gas properties | $ | 15,190 | ||||||
Asset retirement obligations | (170 | ) | ||||||
Other liabilities | (552 | ) | ||||||
Total net assets | $ | 14,468 | ||||||
__________ | ||||||||
-1 | The fair value of the unit consideration was based upon 414,045 common units valued at $20.79 per unit (closing price on the date of the acquisition). | |||||||
-2 | The Partnership agreed to provide additional consideration to Scintilla if average daily production attributable to the acquired working interests exceeds a specified average daily production during the specified period (the "Southern Dome Contingent Consideration"). See Note 3 "Contingent Consideration" for additional discussion of the Southern Dome Contingent Consideration. | |||||||
MCE Acquisition. In November 2013, the Partnership acquired 100% of the equity interests in MCE, other than Class B Units that were retained by certain of the sellers as discussed further below (the "MCE Acquisition"). MidCentral Energy Services, LLC ("MCES"), a wholly owned subsidiary of MCE, operates an oilfield services business that offers full service blowout prevention installation and pressure testing services throughout the Mid-Continent region and in South Texas and West Texas, along with the rental of certain ancillary equipment necessary to perform such services. | ||||||||
Total consideration for the MCE Acquisition is as follows (in thousands): | ||||||||
Consideration: | ||||||||
Cash | $ | 3,781 | ||||||
Fair value of common units granted (1) | 41,822 | |||||||
Common units granted to MCE employees (2) | 2,259 | |||||||
Contingent consideration (3) | 6,320 | |||||||
MCE Class B units granted (4) | 13,988 | |||||||
Total fair value of consideration | $ | 68,170 | ||||||
__________ | ||||||||
-1 | The fair value of the unit consideration was based upon 1,847,265 common units valued at $22.64 per unit (closing price on the date of the acquisition). | |||||||
-2 | The fair value of the unit consideration was based upon 99,768 common units valued at $22.64 per unit (closing price on the date of the acquisition). These common units were issued to certain employees of MCE under the Partnership’s long-term incentive plan, primarily for service prior to the acquisition. Any forfeited common units do not revert to the Partnership, but would be distributed to the former owners of MCE. | |||||||
-3 | The owners of MCE are entitled to receive additional common units in the second quarter of 2015 based on a specified multiple of the annualized EBITDA of MCES for the trailing nine month period ending March 31, 2015, less certain adjustments, subject to a $120.0 million cap ("MCE Contingent Consideration"). The MCE Contingent Consideration was valued at $6.3 million at the acquisition date through the use of a Monte Carlo simulation. See Note 3 "Contingent Consideration" for additional discussion of the MCE Contingent Consideration. | |||||||
-4 | Certain former owners of MCE retained Class B Units, which entitle the holders to receive incentive distributions of cash distributed by MCE above specified thresholds in increasing amounts. See Note 9 "Equity" for additional discussion of these incentive distributions. The Class B units were valued at $14.0 million at the acquisition date through the use of a Monte Carlo simulation. | |||||||
The total purchase price allocated to the assets acquired and liabilities assumed based upon fair value on the date of acquisition is as follows (in thousands): | ||||||||
Fair value of assets acquired and liabilities assumed: | ||||||||
Cash | $ | 1,522 | ||||||
Accounts receivable | 3,365 | |||||||
Other current assets | 954 | |||||||
Property and equipment | 7,923 | |||||||
Intangible asset (1) | 36,772 | |||||||
Goodwill (2) (3) | 24,077 | |||||||
Other assets | 19 | |||||||
Total assets acquired | 74,632 | |||||||
Accounts payable and accrued liabilities (3) | (2,448 | ) | ||||||
Factoring payable | (1,679 | ) | ||||||
Long-term debt | (2,335 | ) | ||||||
Total liabilities assumed | (6,462 | ) | ||||||
Net assets acquired | $ | 68,170 | ||||||
__________ | ||||||||
-1 | Customer relationships, an identifiable intangible asset, were valued based on the estimated free cash flows the customer relationships are expected to provide and are amortized using an accelerated method over seven years. | |||||||
-2 | Goodwill is calculated as the excess of the consideration transferred over the fair value of net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Such goodwill is not deductible for tax purposes. Specifically, the goodwill recorded as part of the acquisition of MCE includes any intangible assets that do not qualify for separate recognition, such as the MCE trained, skilled and assembled workforce, along with the expected synergies from leveraging the customer relationships and integrating new product offerings into MCE's business. Goodwill has been allocated to the oilfield services segment. | |||||||
-3 | Includes purchase price allocation adjustment of $0.1 million made during the three months ended September 30, 2014 based on additional information received on accounts payable assumed. | |||||||
Since the President and Chief Executive Officer of the Partnership's general partner, Kristian B. Kos, through his control over the Partnership’s general partner, controls the Partnership and also owned 36% of the equity interest in MCE, the MCE Acquisition was accounted for as a business combination achieved in stages. The Partnership initially recorded the 36% equity interest in MCE acquired from Mr. Kos at his equity method carrying basis, which was $1.8 million as of November 12, 2013. The Partnership remeasured the 36% interest to determine the acquisition-date fair value and recognized a corresponding gain of $22.7 million on investment in acquired business. | ||||||||
2014 Acquisitions | ||||||||
CEU Acquisition. On January 31, 2014, we completed the acquisition of working interests in 23 producing wells and related undeveloped leasehold rights in the Southern Dome field in Oklahoma County, Oklahoma, from CEU Paradigm, LLC ("CEU") for approximately $17.1 million, net of purchase price adjustments (the "CEU Acquisition"). | ||||||||
The total purchase price allocated to the assets acquired and liabilities assumed based upon fair value on the date of acquisition, net of purchase price adjustments, is as follows (in thousands): | ||||||||
Consideration: | ||||||||
Cash | $ | 5,503 | ||||||
Fair value of common units granted (1) | 11,621 | |||||||
Contingent consideration (2) | — | |||||||
Total fair value of consideration | $ | 17,124 | ||||||
Fair value of assets acquired and liabilities assumed: | ||||||||
Proved oil and natural gas properties | $ | 17,306 | ||||||
Asset retirement obligations | (182 | ) | ||||||
Total net assets | $ | 17,124 | ||||||
__________ | ||||||||
-1 | The fair value of the unit consideration was based upon 488,667 common units valued at $23.78 per unit (closing price on the date of the acquisition). | |||||||
-2 | The Partnership agreed to provide additional consideration to CEU if average daily production attributable to the acquired working interests exceeds a specified average daily production during a specified period (the "CEU Contingent Consideration"). See Note 3 "Contingent Consideration" for additional discussion of the CEU Contingent Consideration. | |||||||
MCCS Acquisition. On June 26, 2014, we exercised the option granted in connection with the MCE Acquisition to acquire 100% of the equity interest in MCCS, an oilfield services company that specializes in providing services, primarily installation and pressure testing, to oil and natural gas exploration and production companies (the "MCCS Acquisition"). | ||||||||
Total consideration for the MCCS Acquisition is as follows (in thousands): | ||||||||
Consideration: | ||||||||
Fair value of common units granted (1) | $ | 789 | ||||||
Contingent consideration (2) | 4,057 | |||||||
Noncontrolling interest (3) | 1,509 | |||||||
Total fair value of consideration | $ | 6,355 | ||||||
__________ | ||||||||
-1 | The fair value of the unit consideration was based upon 33,646 common units valued at $23.45 per unit (closing price on the date of the acquisition). | |||||||
-2 | The owners of MCCS are entitled to receive additional common units in the second quarter of 2015 based on a specified multiple of the annualized EBITDA of MCCS for the trailing nine month period ending March 31, 2015, less certain adjustments, subject to a $4.5 million cap ("MCCS Contingent Consideration"). The MCCS Contingent Consideration was valued at $4.1 million at the acquisition date through the use of a Monte Carlo simulation. See Note 3 "Contingent Consideration" for additional discussion of the MCCS Contingent Consideration. | |||||||
-3 | As a condition of the acquisition agreement, MCCS was contributed to MCE by the Partnership, which increased the value of the noncontrolling interest held by MCE's Class B unitholders. The increase in the value of the noncontrolling interest that resulted from this is part of the total consideration paid for the MCCS Acquisition and was valued at the acquisition date through the use of a Monte Carlo simulation. | |||||||
The following table summarizes the assets acquired and the liabilities assumed as of the acquisition date at estimated fair value (in thousands): | ||||||||
Fair value of assets acquired and liabilities assumed: | ||||||||
Cash | $ | 109 | ||||||
Accounts receivable | 524 | |||||||
Inventory | 2,035 | |||||||
Other current assets | 14 | |||||||
Property and equipment | 107 | |||||||
Intangible asset (1) | 1,700 | |||||||
Goodwill (2) | 4,060 | |||||||
Other assets | 28 | |||||||
Total assets acquired | 8,577 | |||||||
Accounts payable and accrued liabilities | (1,431 | ) | ||||||
Long-term debt | (791 | ) | ||||||
Total liabilities assumed | (2,222 | ) | ||||||
Net assets acquired | $ | 6,355 | ||||||
__________ | ||||||||
-1 | Customer relationships, an identifiable intangible asset, were valued based on the estimated free cash flows the customer relationships are expected to provide and are amortized using an accelerated method over seven years. | |||||||
-2 | Goodwill is calculated as the excess of the consideration transferred over the fair value of net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Such goodwill is not deductible for tax purposes. Specifically, the goodwill recorded as part of the acquisition of MCCS includes any intangible assets that do not qualify for separate recognition, such as the MCCS trained, skilled and assembled workforce, along with the expected synergies from leveraging the customer relationships and integrating new product offerings into MCCS's business. Goodwill has been allocated to the oilfield services segment. | |||||||
Since the President and Chief Executive Officer of the Partnership's general partner, Kristian B. Kos, through his control over the Partnership’s general partner, controls the Partnership and also owned 50% of the equity interest in MCCS, the MCCS Acquisition was accounted for as a business combination achieved in stages. The Partnership initially recorded the 50% equity interest in MCCS acquired from Mr. Kos at his equity method carrying basis, which was $0.1 million as of June 26, 2014. The Partnership remeasured the 50% interest to determine the acquisition-date fair value and recognized a corresponding gain of $2.3 million on investment in acquired business. | ||||||||
Services Acquisition. On June 26, 2014, the Partnership acquired 100% of the outstanding membership interests in EFS and 100% of the outstanding membership interests in RPS for total consideration of approximately $113.2 million (the "Services Acquisition"). EFS and RPS, which are affiliated entities, are oilfield services companies that specialize in providing well testing and flowback services to the oil and natural gas industry. | ||||||||
Total consideration for the Services Acquisition is as follows (in thousands): | ||||||||
Consideration: | ||||||||
Cash | $ | 57,348 | ||||||
Fair value of common units granted (1) | 33,106 | |||||||
Common units granted for the benefit of EFS and RPS employees (2) | 724 | |||||||
Contingent consideration (3) | 21,984 | |||||||
Total fair value of consideration | $ | 113,162 | ||||||
__________ | ||||||||
-1 | The fair value of the unit consideration was based upon 1,411,777 common units valued at $23.45 per unit (closing price on the date of the acquisition). | |||||||
-2 | The fair value of the unit consideration was based upon 30,867 common units valued at $23.45 per unit (closing price on the date of the transaction). These units were issued to satisfy the settlement of phantom units granted to EFS employees with no service requirement. An additional 401,171 common units were issued and are held in escrow to satisfy the future settlement of phantom units granted to EFS and RPS employees in conjunction with the Services Acquisition are excluded from consideration based on the future service requirement for vesting. See Note 9 "Equity" for additional discussion of phantom units. | |||||||
-3 | The former owners of EFS and RPS are entitled to receive additional consideration in the second quarter of 2015 based on a specified multiple of the annualized EBITDA of EFS and RPS for the year ending December 31, 2014, less certain adjustments ("EFS/RPS Contingent Consideration"). The EFS/RPS Contingent Consideration was valued at $22.0 million at the acquisition date through the use of a probability analysis. See Note 3 "Contingent Consideration" for additional discussion of the EFS/RPS Contingent Consideration. During the three months ended September 30, 2014, a purchase price allocation adjustment was made for approximately $4.8 million to increase the value of the contingent consideration based on additional information made available. | |||||||
The following table summarizes the assets acquired and the liabilities assumed as of the acquisition date at estimated fair value (in thousands): | ||||||||
Fair value of assets acquired and liabilities assumed: | ||||||||
Cash | $ | 1,668 | ||||||
Accounts receivable | 21,611 | |||||||
Other current assets (1) | 620 | |||||||
Property and equipment (1) | 43,853 | |||||||
Intangible assets (2) | 68,700 | |||||||
Goodwill (1) (3) | 15,397 | |||||||
Total assets acquired | 151,849 | |||||||
Accounts payable and accrued liabilities (1) | (6,047 | ) | ||||||
Factoring payable | (15,840 | ) | ||||||
Long-term debt | (16,800 | ) | ||||||
Total liabilities assumed | (38,687 | ) | ||||||
Net assets acquired | $ | 113,162 | ||||||
__________ | ||||||||
-1 | Includes purchase price allocation adjustments, resulting in an increase totaling $3.7 million to goodwill, during the three months ended September 30, 2014, based on additional information received primarily on other current assets and property and equipment acquired. | |||||||
-2 | Identifiable intangible assets include $64.2 million for customer relationships and $4.5 million for non-compete agreements. Customer relationships were valued based on the estimated free cash flows the customer relationships are expected to provide and are amortized using an accelerated method over seven years. Non-compete agreements were valued based on an income approach and are amortized over the agreement period. | |||||||
-3 | Goodwill is calculated as the excess of the consideration transferred over the fair value of net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Such goodwill is not deductible for tax purposes. Specifically, the goodwill recorded as part of the Services Acquisition includes any intangible assets that do not qualify for separate recognition, such as the EFS and RPS trained, skilled and assembled workforce, along with the expected synergies from leveraging the customer relationships. Goodwill has been allocated to the oilfield services segment. During the three months ended, a purchase price allocation adjustment was made to increase the amount assigned to goodwill by approximately $3.7 million, primarily as a result of an increase to the value of the contingent consideration based on additional information made available. | |||||||
Pro forma financial information. The following unaudited pro forma combined results of operations are presented for the nine months ended September 30, 2014 as though the Partnership completed the CEU Acquisition and the Services Acquisition (collectively, the "2014 Material Acquisitions") as of January 1, 2013. The pro forma combined results of operations for the nine months ended September 30, 2014 have been prepared by adjusting the historical results of the Partnership to include the historical results of the 2014 Material Acquisitions through the dates of acquisition and estimates of the effect of these transactions on the combined results. In addition, pro forma adjustments have been made assuming the units issued as consideration for these acquisitions and a portion of the units issued in the April 2014 equity offering, the proceeds from which were used to fund an acquisition, had been outstanding since January 1, 2013. Future results may vary significantly from the results reflected in this pro forma financial information because of future events and transactions, as well as other factors. | ||||||||
Nine Months Ended September 30, 2014 | ||||||||
(in thousands, except per unit amounts) | ||||||||
Revenue | $ | 172,590 | ||||||
Net income attributable to New Source Energy Partners L.P. (1) | $ | 5,084 | ||||||
Net income per common unit (1): | ||||||||
Basic | $ | 0.31 | ||||||
Diluted | $ | 0.31 | ||||||
__________ | ||||||||
-1 | Excludes $24.3 million of acquisition costs and transaction bonuses paid to EFS and RPS employees that were included in the historical results of the Partnership, EFS or RPS. | |||||||
The amounts of revenues and operating income included in the accompanying unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2014 generated by the 2014 Material Acquisitions are shown in the table below. The operating income attributable to the CEU Acquisition represents the excess of revenue over direct operating expenses and does not reflect certain expenses, such as general and administrative; therefore, this information is not intended to report results as if these operations were managed on a stand-alone basis. Direct operating expenses include lease operating expenses and production taxes for the CEU Acquisition. | ||||||||
Three Months Ended September 30, 2014 | Nine Months Ended September 30, 2014 | |||||||
(in thousands) | ||||||||
Revenue | $ | 30,110 | $ | 35,047 | ||||
Operating income | $ | 590 | $ | 2,786 | ||||
Acquisition expense for the 2014 Material Acquisitions of $0.4 million and $3.6 million were included in general and administrative expenses in the accompanying unaudited statements of operations for the three and nine months ended September 30, 2014, respectively. | ||||||||
The following unaudited pro forma combined results of operations are presented for the three and nine months ended September 30, 2013 as though the Partnership completed the acquisitions of the March Acquired Properties, the Southern Dome Acquired Properties and the MCE Acquisition (collectively, the "2013 Material Acquisitions") as of January 1, 2012, which was the beginning of the earliest period presented at the time of the acquisition, and the 2014 Material Acquisitions, as of January 1, 2013. The pro forma combined results of operations for the three and nine months ended September 30, 2013 have been prepared by adjusting the historical results of the Partnership to include the historical results of these acquisitions through the date of acquisition and estimates of the effect of the 2013 Material Acquisitions and the 2014 Material Acquisitions on the combined results. In addition, pro forma adjustments have been made for the interest that would have been incurred for financing the cash portion of the consideration of the 2013 Material Acquisitions with the Partnership's senior secured revolving credit facility and assume the units issued as consideration for the 2013 Material Acquisitions had been outstanding since January 1, 2012 and the units issued as consideration for the 2014 Material Acquisitions and a portion of the units issued in the April 2014 equity offering, the proceeds from which were used to fund an acquisition, had been outstanding since January 1, 2013. | ||||||||
Three Months Ended September 30, 2013 | Nine Months Ended September 30, 2013 | |||||||
(in thousands, except per unit amounts) | ||||||||
Revenue | $ | 65,673 | $ | 136,851 | ||||
Net loss attributable to New Source Energy Partners L.P. (1) | $ | (3,971 | ) | $ | (10,647 | ) | ||
Net loss per common unit (1): | ||||||||
Basic | $ | (0.24 | ) | $ | (0.83 | ) | ||
Diluted | $ | (0.24 | ) | $ | (0.83 | ) | ||
__________ | ||||||||
(1) Includes $1.6 million of the Partnership's acquisition costs related to the 2014 Material Acquisitions in the nine months ended September 30, 2013. |
Contingent_Consideration
Contingent Consideration | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||||||
Contingent Consideration | ' | |||||||
Contingent Consideration | ||||||||
The contingent consideration provided for in certain of our acquisitions represents additional consideration. The fair value of such contingent consideration is estimated using various inputs, including the probability that targets for additional payout will be met, as described below. As the significant inputs to determine fair value of the contingent consideration represent significant unobservable inputs, they are classified as Level 3 under the fair value hierarchy described in Note 7 "Fair Value Measurements." | ||||||||
A reconciliation of the beginning and ending balances of acquisition-related contingent consideration for the three and nine months ended September 30, 2014 is as follows (in thousands): | ||||||||
Three Months Ended September 30, 2014 | Nine Months Ended September 30, 2014 | |||||||
Contingent consideration, beginning balance | $ | 26,609 | $ | 6,320 | ||||
Acquisition date fair value of contingent consideration - CEU Acquisition | — | — | ||||||
Acquisition date fair value of contingent consideration - MCCS Acquisition | — | 4,057 | ||||||
Acquisition date fair value of contingent consideration - Services Acquisition | 4,841 | 21,984 | ||||||
Change in fair value of contingent consideration | 5,404 | 4,493 | ||||||
Settlement of contingent consideration | — | — | ||||||
Contingent consideration, ending balance | $ | 36,854 | $ | 36,854 | ||||
Southern Dome Contingent Consideration. In conjunction with the acquisition of the Southern Dome Acquired Properties, the Partnership agreed to provide additional consideration to Scintilla if the average daily production attributable to the Southern Dome Acquired Properties for the nine months ending September 30, 2014 exceeds 383.5 Boe. The contingent consideration was determined to have a fair value of $1.6 million at the acquisition date and was included in the consideration for the Southern Dome Acquired Properties. The Partnership estimated the fair value as of December 31, 2013 at $0. As detailed in the acquisition agreement, the additional consideration was calculated as the value of average daily production for the nine months ending September 30, 2014 less (i) the asset value, (ii) capital expenditures incurred attributable to the production growth (including an allowance for the cost of capital for such capital expenditures) and (iii) revenue attributable to any wells located in a specified project area that were not producing in paying quantities as of the effective date of the acquisition. Any change to the fair value of the contingent consideration was adjusted through earnings due to the factors impacting the ultimate payout. Based on actual production levels for the nine months ending September 30, 2014, no additional consideration is due to Scintilla. | ||||||||
MCE Contingent Consideration. The former owners of MCE are entitled to receive additional common units in the second quarter of 2015 based on a specified multiple of the annualized EBITDA of MCE, excluding EFS, RPS and MCCS, for the trailing nine month period ending March 31, 2015, less certain adjustments, which is subject to a $120.0 million cap. The contingent consideration was valued at $6.3 million at the acquisition date and was included in the consideration for the MCE Acquisition. Any change to the fair value of the contingent consideration is adjusted through earnings. Based on projections for MCE, the Partnership estimated fair value of the MCE Contingent Consideration as of September 30, 2014 and December 31, 2013 was approximately $15.4 million and $6.3 million, respectively, which is presented as contingent consideration payable in the accompanying unaudited condensed consolidated balance sheets. The increase in fair value of approximately $10.0 million and $9.1 million is included in general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2014, respectively. | ||||||||
CEU Contingent Consideration. In conjunction with the CEU Acquisition, the Partnership agreed to provide additional consideration to CEU if the average daily production attributable to the acquired working interest for the nine months ending September 30, 2014 exceeds 566.0 Boe. The CEU Contingent Consideration was determined to have no value at the acquisition date. As detailed in the acquisition agreement, the additional consideration was calculated as the acquisition value of the production increase less (i) capital expenditures incurred attributable to the production growth (including an allowance for the cost of capital for such capital expenditures) and (ii) revenue attributable to any wells located in a specified project area that were not producing in paying quantities as of the effective date of the acquisition. Based on actual production levels for the nine months ending September 30, 2014, no additional consideration is due to CEU. | ||||||||
MCCS Contingent Consideration. The former owners of MCCS are entitled to receive additional common units in the second quarter of 2015 based on a specified multiple of the annualized EBITDA of MCCS for the trailing nine month period ending March 31, 2015, less certain adjustments, which is subject to a $4.5 million cap. The contingent consideration was valued at $4.1 million at the acquisition date and was included in the consideration for the MCCS Acquisition. Any changes to the fair value of the contingent consideration will be adjusted through earnings. The fair value of the contingent consideration was $0.4 million as of September 30, 2014. The decrease in fair value of approximately $3.7 million is included in general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2014. | ||||||||
EFS/RPS Contingent Consideration. The former owners of EFS and RPS are entitled to receive additional consideration in the form of cash and common units in the second quarter of 2015 based on a specified multiple of the annualized EBITDA of EFS and RPS for the year ending December 31, 2014, less certain adjustments. The terms of the contribution agreement provide that the additional consideration is to be paid approximately 50% in cash and approximately 50% in common units, consistent with the initial consideration for the Services Acquisition. However, the former owners can elect to receive a larger portion of the payout in common units. The contingent consideration was valued at $22.0 million as of the acquisition date and was included in the consideration for the Services Acquisition. Any change to the fair value of the contingent consideration will be adjusted through earnings. The fair value of the contingent consideration was $21.1 million as of September 30, 2014. The decrease in fair value of approximately $0.9 million is included in general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2014. |
Debt
Debt | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Debt | ' | |||||||
Debt | ||||||||
The Partnership's debt consists of the following (in thousands): | ||||||||
30-Sep-14 | 31-Dec-13 | |||||||
Credit facility | $ | 92,250 | $ | 78,500 | ||||
Notes payable | 21,889 | 2,233 | ||||||
Line of credit | 3,294 | — | ||||||
Total debt | 117,433 | 80,733 | ||||||
Less: current maturities of long-term debt | 21,132 | 719 | ||||||
Long-term debt | $ | 96,301 | $ | 80,014 | ||||
Senior Secured Revolving Credit Facility | ||||||||
The Partnership has a senior secured revolving credit facility that is available to be drawn on subject to limitations based on its terms and certain financial covenants, as described below, (the "credit facility"). As of September 30, 2014, the credit facility contained financial covenants, including maintaining (i) a ratio of EBITDA (earnings before interest, depletion, depreciation and amortization, and income taxes) to interest expense of not less than 2.5 to 1.0; (ii) a ratio of total debt to EBITDA of not more than 3.5 to 1.0; and (iii) a ratio of consolidated current assets to consolidated current liabilities of not less than 1.0 to 1.0, in each case as more fully described in the credit agreement governing the credit facility. The financial covenants are calculated based on the results of the Partnership, excluding its subsidiaries. The obligations under the credit facility are secured by substantially all of the Partnership's oil and natural gas properties and other assets, excluding assets of all subsidiaries. The credit facility matures in February 2017. | ||||||||
Additionally, the credit facility contains various covenants and restrictive provisions that, among other things, limit the ability of the Partnership to incur additional debt, guarantees or liens; consolidate, merge or transfer all or substantially all of its assets; make certain investments, acquisitions or other restricted payments; modify certain material agreements; engage in certain types of transactions with affiliates; dispose of assets; incur commodity hedges exceeding a certain percentage of production; and prepay certain indebtedness. Notwithstanding the foregoing, the credit facility permits the Partnership to make distributions to its common unit holders in an amount not to exceed "available cash" (as defined in the First Amended and Restated Agreement of Limited Partnership of the Partnership) if (i) no default or event of default has occurred and is continuing or would result therefrom and (ii) borrowing base utilization under the credit facility does not exceed 90%. As of September 30, 2014, the Partnership was in compliance with all covenants under the credit facility. | ||||||||
Borrowings under the credit facility bear interest at a base rate (a rate equal to the highest of (a) the Federal Funds Rate plus 0.5%, (b) Bank of Montreal’s prime rate or (c) the London Interbank Offered Rate ("LIBOR") plus 1.0%) or LIBOR, in each case plus an applicable margin ranging from 1.50% to 2.25%, in the case of a base rate loan, or from 2.50% to 3.25%, in the case of a LIBOR loan (determined with reference to the borrowing base utilization). The unused portion of the borrowing base is subject to a commitment fee of 0.50% per annum. Interest and commitment fees are payable quarterly, or in the case of certain LIBOR loans at shorter intervals. At September 30, 2014 and December 31, 2013, the average annual interest rate on borrowings outstanding under the credit facility was 3.25%. At September 30, 2014, the borrowing base under the credit facility was $102.5 million with $10.25 million of available borrowing capacity and no available borrowing capacity before restriction on distribution occurs. In October 2014, the Partnership repaid $9.25 million in borrowings under the credit facility, which increases the amount of available borrowing capacity before restriction on distribution occurs by $9.25 million. | ||||||||
The semi-annual redetermination of the borrowing base on our credit facility is currently in process. The borrowing base is dependent on estimated oil, natural gas and NGL reserves, which factor in oil, natural gas and NGL prices, respectively. Based on our reserve estimates and applicable commodity pricing, we may have a decrease to our borrowing base as a result of the redetermination. As of November 13, 2014, the redetermination of our borrowing base had not been finalized. | ||||||||
Notes Payable | ||||||||
The Partnership has financing notes with various lending institutions for certain property and equipment through MCES. These notes range from 12-60 months in duration with maturity dates from August 2015 through April 2018 and carry variable interest rates ranging from 5.28% to 10.51%. All notes are associated with specific capital assets of MCES and are secured by such assets. In August 2014, MCES entered into $3.5 million of additional notes payable. At September 30, 2014, the Partnership had $7.7 million outstanding under the MCES notes payable as of September 30, 2014. | ||||||||
In conjunction with the Services Acquisition, the Partnership assumed the outstanding balances on term loans held by EFS. These term loans had a balance of $14.2 million as of September 30, 2014 and mature on June 26, 2015. The term loans have a variable interest rate based on the Bank 7 Base Rate minus 2.3%, which was 5.5% at September 30, 2014, with a minimum interest rate of 5.5%. Payments of principal and interest are due in monthly installments. The term loans are collateralized by various assets of the parties to the agreement and guaranteed by MCE and former owners of EFS and RPS. The Partnership is required to maintain a reserve bank account into which the lesser of $0.3 million or 100% of excess cash flow (as defined in the loan agreement) shall be deposited quarterly and used to fund an additional annual payment on September 30th of each year during the term of the loans. | ||||||||
The EFS term loan agreement contains various covenants and restrictive provisions that, among other things, limit the ability of EFS and RPS to incur additional debt, guarantees or liens; consolidate, merge or transfer all or substantially all of its assets; make certain investments; and dispose of assets. Additionally, beginning October 1, 2014, EFS and RPS must comply with certain financial covenants, including maintaining (i) a fixed charge ratio of not less than 1.25 to 1.0 (ii) a leverage ratio of not greater than 1.5 to 1.0, and (iii) a working capital and cash balance of at least $4.0 million, in each case as more fully described in the loan agreement. | ||||||||
Line of Credit | ||||||||
In February 2014, MCES entered into a loan agreement for a revolving line of credit of up to $4.0 million, based on a borrowing base of $4.0 million related to MCES' accounts receivable. Interest only payments are due monthly with the line of credit maturing in February 2015. The line of credit replaced MCES' factoring payable agreement described in Note 5 "Factoring Payable." Interest on the line of credit accrues at the Bank of Oklahoma Financial Corporation National Prime Rate, which was 4.0% at September 30, 2014. The line of credit is secured by accounts receivable, inventory, chattel paper, and general intangibles of MCES. Based on the outstanding balance of $3.3 million, there was $0.7 million of available borrowing capacity at September 30, 2014. | ||||||||
The line of credit contained a covenant requiring a debt service coverage ratio, as defined in agreement, of not less than 1.25 to 1.0. As of September 30, 2014, MCES was in compliance with this covenant under the line of credit. |
Factoring_Payable
Factoring Payable | 9 Months Ended |
Sep. 30, 2014 | |
Debt Disclosure [Abstract] | ' |
Factoring Payable | ' |
Factoring Payable | |
The Partnership was a party to a secured borrowing agreement to factor the accounts receivable of MCES. At December 31, 2013, the outstanding balance was $1.9 million. The outstanding balance was paid and the agreement was terminated in February 2014 when MCES established its line of credit. See Note 4 "Debt" for discussion of MCES' line of credit. | |
In conjunction with the Services Acquisition, the Partnership assumed the EFS and RPS factoring agreements. Under these factoring agreements, invoices to pre-approved customers are submitted to the bank and the Partnership receives 90% funding immediately, and 10% is held in a reserve account with the factoring company for each invoice that is factored. Factoring fees, calculated based on three month LIBOR plus 3% (subject to a monthly minimum), are deducted from collected receivables. These factoring fees, along with an annual fee, are included in interest expense in the statement of operations. If a receivable is not collected within 90 days, the receivable is repurchased by the Partnership out of either the Partnership's reserve fund or current advances. The outstanding balance of the factoring payable was $15.5 million as of September 30, 2014. |
Derivative_Contracts
Derivative Contracts | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||||||||||
Derivative Contracts | ' | |||||||||||||||
Derivative Contracts | ||||||||||||||||
Due to the volatility of commodity prices, the Partnership periodically enters into derivative contracts to achieve a more predictable cash flow, as well as to reduce exposure from price fluctuations for a portion of its oil, natural gas and NGL production. While the use of derivative contracts limits the Partnership’s ability to benefit from increases in the prices of oil, natural gas and NGLs, it also reduces the Partnership’s potential exposure to adverse price movements. The Partnership’s derivative contracts apply to only a portion of its expected production, provide only partial price protection against declines in market prices and limit the Partnership’s potential gains from future increases in market prices. Changes in the derivatives' fair values are recognized in earnings since the Partnership has elected not to designate its derivative contracts as hedges for accounting purposes. | ||||||||||||||||
At September 30, 2014, the Partnership's derivative contracts consisted of collars, put options, and fixed price swaps, as described below: | ||||||||||||||||
Collars | The instrument contains a fixed floor price (long put option) and ceiling price (short call option), where the purchase price of the put option equals the sales price of the call option. At settlement, if the market price exceeds the ceiling price, the Partnership pays the difference between the market price and the ceiling price. If the market price is less than the fixed floor price, the Partnership receives the difference between the fixed floor price and the market price. If the market price is between the ceiling and the fixed floor price, no payments are due from either party. | |||||||||||||||
Collars - three way | Three-way collars have two fixed floor prices (a purchased put and a sold put) and a fixed ceiling price (call). The purchased put establishes a minimum price unless the market price falls below the sold put, at which point the minimum price would be the New York Mercantile Exchange plus the difference between the purchased put strike price and the sold put strike price. The call establishes a maximum price (ceiling) the Partnership will receive for the volumes under the contract. | |||||||||||||||
Put options | The Partnership periodically buys put options. At the time of settlement, if market prices are below the fixed price of the put option, the Partnership is entitled to the difference between the put option and the fixed price. | |||||||||||||||
Fixed price swaps | The Partnership receives a fixed price for the contract and pays a floating market price to the counterparty over a specified period for a contracted volume. | |||||||||||||||
The following tables present our derivative instruments outstanding as of September 30, 2014: | ||||||||||||||||
Oil collars | Volumes | Floor Price | Ceiling Price | |||||||||||||
(Bbls) | ||||||||||||||||
2014 | 23,763 | $ | 80 | $ | 103.5 | |||||||||||
2015 | 42,649 | $ | 80 | $ | 93.25 | |||||||||||
Oil collars - three way | Volumes | Sold Put | Purchased Put | Ceiling Price | ||||||||||||
(Bbls) | ||||||||||||||||
2015 | 36,500 | $ | 77.5 | $ | 92.5 | $ | 102.6 | |||||||||
Natural gas collars | Volumes | Floor Price | Ceiling Price | |||||||||||||
(MMBtu) | ||||||||||||||||
2014 | 260,751 | $ | 4 | $ | 4.41 | |||||||||||
2015 | 1,362,382 | $ | 4 | $ | 4.32 | |||||||||||
Oil put options | Volumes (Bbls) | Floor Price | ||||||||||||||
2014 | 7,418 | $ | 80 | |||||||||||||
Natural gas put options | Volumes | Floor Price | ||||||||||||||
(MMBtu) | ||||||||||||||||
2014 | 99,034 | $ | 3.5 | |||||||||||||
2015 | 798,853 | $ | 3.5 | |||||||||||||
2016 | 930,468 | $ | 3.5 | |||||||||||||
NGL put options | Volumes (Bbls) | Average Floor | ||||||||||||||
Price | ||||||||||||||||
2014 | 5,535 | $ | 63.19 | |||||||||||||
Oil fixed price swaps | Volumes (Bbls) | Weighted Average Fixed Price | ||||||||||||||
2014 | 6,900 | $ | 103.52 | |||||||||||||
2015 | 39,411 | $ | 88.9 | |||||||||||||
2016 | 36,658 | $ | 86 | |||||||||||||
Natural gas fixed price swaps | Volumes | Weighted Average Fixed Price | ||||||||||||||
(MMBtu) | ||||||||||||||||
2014 | 176,795 | $ | 4.09 | |||||||||||||
2015 | 800,573 | $ | 4.25 | |||||||||||||
2016 | 629,301 | $ | 4.37 | |||||||||||||
NGL fixed price swaps | Volumes | Weighted Average Fixed Price | ||||||||||||||
(Bbls) | ||||||||||||||||
2014 | 168,924 | $ | 39.44 | |||||||||||||
2015 | 84,793 | $ | 75.18 | |||||||||||||
By using derivative instruments to mitigate exposures to changes in commodity prices, the Partnership exposes itself to credit risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. The Partnership nets derivative assets and liabilities for counterparties where it has a legal right of offset. Such credit risk is mitigated by the fact that the Partnership's derivatives counterparties are major financial institutions with investment grade credit ratings, some of which are lenders under the Partnership's credit facility. In addition, the Partnership routinely monitors the creditworthiness of its counterparties. | ||||||||||||||||
The following table summarizes our derivative contracts on a gross basis, the effects of netting assets and liabilities for which the right of offset exists (in thousands): | ||||||||||||||||
30-Sep-14 | Gross Amounts of Recognized Assets and Liabilities | Gross Amounts Offset | Net Amounts Presented | |||||||||||||
Assets: | ||||||||||||||||
Commodity derivatives - current assets | $ | 1,065 | $ | (404 | ) | $ | 661 | |||||||||
Commodity derivatives - long-term assets | 565 | (6 | ) | 559 | ||||||||||||
Total | $ | 1,630 | $ | (410 | ) | $ | 1,220 | |||||||||
Liabilities: | ||||||||||||||||
Commodity derivatives - current liabilities | $ | 1,012 | $ | (404 | ) | $ | 608 | |||||||||
Commodity derivatives - long-term liabilities | 43 | (6 | ) | 37 | ||||||||||||
Total | $ | 1,055 | $ | (410 | ) | $ | 645 | |||||||||
31-Dec-13 | Gross Amounts of Recognized Assets and Liabilities | Gross Amounts Offset | Net Amounts Presented | |||||||||||||
Assets: | ||||||||||||||||
Commodity derivatives - current assets | $ | 1,342 | $ | (1,212 | ) | $ | 130 | |||||||||
Commodity derivatives - long-term assets | 1,638 | (978 | ) | 660 | ||||||||||||
Total | $ | 2,980 | $ | (2,190 | ) | $ | 790 | |||||||||
Liabilities: | ||||||||||||||||
Commodity derivatives - current liabilities | $ | 4,379 | $ | (1,212 | ) | $ | 3,167 | |||||||||
Commodity derivatives - long-term liabilities | 1,015 | (978 | ) | 37 | ||||||||||||
Total | $ | 5,394 | $ | (2,190 | ) | $ | 3,204 | |||||||||
See Note 7 "Fair Value Measurements" for additional information on the fair value measurement of the Partnership's derivative contracts. | ||||||||||||||||
The following table presents gain (loss) on our derivative contracts as included in the accompanying unaudited statements of operations for the three and nine months ended September 30, 2014 and 2013 (in thousands): | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Total gain (loss) on derivative contracts, net (1) | $ | 3,768 | $ | (3,453 | ) | $ | (760 | ) | $ | (2,597 | ) | |||||
__________ | ||||||||||||||||
-1 | Included in gain (loss) on derivative contracts for the three months ended September 30, 2014 and 2013 are net cash payments upon contract settlement of $0.3 million and $0.5 million, respectively. Included in loss on derivative contracts for the nine months ended September 30, 2014 and 2013 are net cash payments upon contract settlement of $3.8 million and $0.9 million, respectively. |
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||
Fair Value Measurements | |||||||||||||||||
We measure and report certain assets and liabilities at fair value and classify and disclose our fair value measurements based on the levels of the fair value hierarchy, as described below: | |||||||||||||||||
Level 1: Measured based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. | |||||||||||||||||
Level 2: Measured based on quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. | |||||||||||||||||
Level 3: Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity). | |||||||||||||||||
Assets and liabilities that are measured at fair value are classified based on the lowest level of input that is significant to the fair value measurement. The Partnership's assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. | |||||||||||||||||
Level 2 Fair Value Measurements | |||||||||||||||||
Derivative contracts. The fair values of our commodity collars, put options and fixed price swaps are based upon inputs that are either readily available in the public market, such as oil and natural gas futures prices, volatility factors and discount rates, or can be corroborated from active markets. The Partnership estimates the fair values of the swaps based on published forward commodity price curves for the underlying commodities as of the date of the estimate for those commodities for which published forward pricing is readily available. For those commodity derivatives for which forward commodity price curves are not readily available, the Partnership estimates, with the assistance of third-party pricing experts, the forward curves as of the date of the estimate. The Partnership validates the data provided by third parties by understanding the pricing models used, obtaining market values from other pricing sources, analyzing pricing data in certain situations and confirming, where applicable, that those securities trade in active markets. The Partnership estimates the option value of puts and calls combined into hedges, market prices, contract parameters and discount rates based on published LIBOR rates. | |||||||||||||||||
Level 3 Fair Value Measurements | |||||||||||||||||
Derivative contracts. The fair values of our natural gas collars, natural gas and NGL put options and NGL fixed price swaps at December 31, 2013 were based upon quotes obtained from counterparties to the derivative contracts. These values were reviewed internally for reasonableness. The significant unobservable inputs used in the fair value measurement of our natural gas and NGL put options and NGL fixed price swaps were the estimated probability of exercise and the estimate of NGL futures prices. Significant increases (decreases) in the probability of exercise and NGL futures prices could result in a significantly higher (lower) fair value measurement. | |||||||||||||||||
Contingent consideration. As discussed in Note 3 "Contingent Consideration," the Partnership has agreed to pay additional consideration on the MCE Acquisition, the MCCS Acquisition and the Services Acquisition. The fair value of the contingent consideration resulting from these acquisitions is based on the present value of estimated future payments, using various inputs, including forecasted EBITDA metrics and the probability that targets for additional payout will be met. Significant increases (decreases) in the probability of meeting target payout levels could result in a significantly higher (lower) fair value measurement. | |||||||||||||||||
The following table sets forth by level within the fair value hierarchy the Partnership’s financial assets and liabilities that were measured at fair value on a recurring basis (in thousands): | |||||||||||||||||
30-Sep-14 | Fair Value Measurements | ||||||||||||||||
Description | Active Markets for Identical Assets (Level 1) | Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | Total Carrying Value | |||||||||||||
Oil and natural gas collars | $ | — | $ | 157 | $ | — | $ | 157 | |||||||||
Oil, natural gas and NGL put options | — | 539 | — | 539 | |||||||||||||
Oil, natural gas and NGL fixed price swaps | — | (121 | ) | — | (121 | ) | |||||||||||
Contingent consideration | — | — | (36,854 | ) | (36,854 | ) | |||||||||||
Total | $ | — | $ | 575 | $ | (36,854 | ) | $ | (36,279 | ) | |||||||
31-Dec-13 | Fair Value Measurements | ||||||||||||||||
Description | Active Markets for Identical Assets (Level 1) | Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | Total Carrying Value | |||||||||||||
Oil collars | $ | — | $ | (57 | ) | $ | — | $ | (57 | ) | |||||||
Natural gas collars | — | — | (9 | ) | (9 | ) | |||||||||||
Oil put options | — | 28 | — | 28 | |||||||||||||
Natural gas and NGL put options | — | — | 403 | 403 | |||||||||||||
Oil and natural gas fixed price swaps | — | 132 | — | 132 | |||||||||||||
NGL fixed price swaps | — | — | (2,911 | ) | (2,911 | ) | |||||||||||
Contingent consideration | — | — | (6,320 | ) | (6,320 | ) | |||||||||||
Total | $ | — | $ | 103 | $ | (8,837 | ) | $ | (8,734 | ) | |||||||
The following table sets forth a reconciliation of our derivative contracts measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended September 30, 2013 and nine months ended September 30, 2014 and 2013 (in thousands): | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2013 | 2014 | 2013 | |||||||||||||||
Beginning balance | $ | 1,866 | $ | (2,517 | ) | $ | (112 | ) | |||||||||
Loss on derivative contracts | (3,277 | ) | (2,432 | ) | (1,522 | ) | |||||||||||
Transfers out (1) | — | 2,843 | — | ||||||||||||||
Cash paid upon settlement | 446 | 2,106 | 669 | ||||||||||||||
Ending balance | $ | (965 | ) | $ | — | $ | (965 | ) | |||||||||
Unrealized losses included in earnings relating to derivatives held at period end | $ | (2,677 | ) | $ | — | $ | (884 | ) | |||||||||
__________ | |||||||||||||||||
-1 | Fair values related to the Company’s natural gas collars, natural gas and NGL put options and NGL fixed price swaps were transferred from Level 3 to Level 2 in the second quarter of 2014 due to enhancements to the Company’s internal valuation process, including the use of observable inputs to assess the fair value. During the three and nine months ended September 30, 2013, the Company did not have any transfers between Level 1, Level 2 or Level 3 fair value measurements. The Company’s policy is to recognize transfers in and/or out of fair value hierarchy levels as of the beginning of the quarterly reporting period in which the event or change in circumstances causing the transfer occurred. | ||||||||||||||||
See Note 6 "Derivative Contracts" for additional discussion of our derivative contracts. See Note 3 "Contingent Consideration" for a reconciliation of activity for contingent consideration during the three and nine months ended September 30, 2014. | |||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||
Credit Facility. The carrying amount of the credit facility of $92.25 million and $78.5 million as of September 30, 2014 and December 31, 2013, respectively, approximates fair value because the Partnership's current borrowing rate does not materially differ from market rates for similar bank borrowings. | |||||||||||||||||
Notes Payable. The carrying value of our notes payable of $21.9 million and $2.2 million at September 30, 2014 and December 31, 2013 approximated fair value based on rates applicable to similar instruments. | |||||||||||||||||
The credit facility and notes payable are classified as a Level 2 item within the fair value hierarchy. | |||||||||||||||||
Fair Value on a Non-Recurring Basis | |||||||||||||||||
The Partnership performs valuations on a non-recurring basis primarily as it relates to the consideration, assets acquired, and liabilities assumed related to acquisitions. See Note 2 "Acquisitions" for discussion of these valuations. |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||
Goodwill and Intangible Assets | ' | |||||||
Goodwill and Intangible Assets | ||||||||
Goodwill | ||||||||
Goodwill represents the estimated future economic benefits arising from other assets acquired in business combinations that could not be individually identified and separately recognized. See Note 2 "Acquisitions" for discussion of our business acquisitions. Such goodwill is not deductible for tax purposes. Goodwill has been allocated to the oilfield services segment. A reconciliation of the aggregate carry amount of goodwill for the period from December 31, 2013 to September 30, 2014 is as follows (in thousands): | ||||||||
Goodwill at December 31, 2013 | $ | 23,974 | ||||||
Additions: | ||||||||
MCCS Acquisition | 4,060 | |||||||
Services Acquisition | 11,664 | |||||||
Change due to purchase price allocation adjustments (1) | 3,836 | |||||||
Goodwill at September 30, 2014 | $ | 43,534 | ||||||
__________ | ||||||||
(1) Includes adjustments totaling $3.8 million during the three months ended September 30, 2014 as a result of purchase price allocation adjustments of $0.1 million and $3.7 million on the MCE Acquisition and Services Acquisition, respectively. See Note 2 "Acquisitions" for discussion of the purchase price allocation adjustments. | ||||||||
Intangible Assets | ||||||||
Intangible assets were identified in certain of the acquisitions during 2013 and 2014. See Note 2 "Acquisitions" for discussion of our business acquisitions. Intangible assets are amortized over the expected cash flow period for customer relationships and over the agreement period for the non-compete agreements. Amortization expense for the three and nine months ended September 30, 2014 was $9.4 million and $15.6 million, respectively. | ||||||||
The Partnership's intangible assets at September 30, 2014 and December 31, 2013 consist of the following (in thousands): | ||||||||
30-Sep-14 | 31-Dec-13 | |||||||
Customer relationships - MCE Acquisition | $ | 36,772 | $ | 36,772 | ||||
Customer relationships - Services Acquisition | 64,200 | — | ||||||
Non-compete agreements - Services Acquisition | 4,500 | — | ||||||
Customer relationships - MCCS Acquisition | 1,700 | — | ||||||
Total intangible assets | 107,172 | 36,772 | ||||||
Less: accumulated amortization | 17,359 | 1,763 | ||||||
Intangible assets, net | $ | 89,813 | $ | 35,009 | ||||
Equity
Equity | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Equity [Abstract] | ' | |||||||||||||||
Equity | ' | |||||||||||||||
Equity | ||||||||||||||||
Common Units | ||||||||||||||||
Issuance for Acquisitions. In 2014, we issued 1,964,957 of common units to satisfy the equity portion of the consideration paid in the CEU Acquisition, the MCCS Acquisition, and the Services Acquisition, respectively. See Note 2 "Acquisitions" for additional discussion of these transactions. | ||||||||||||||||
Equity Offering. On April 29, 2014, we completed a public offering of 3,450,000 of our common units at a price of $23.25 per unit. We received net proceeds of approximately $76.2 million from this offering, after deducting underwriting discounts of $3.6 million and offering costs of $0.3 million. We used $5.0 million of the net proceeds from this offering to repay indebtedness outstanding under our credit facility with the remaining proceeds used to fund the cash portion of the Services Acquisition and related acquisition costs and for general corporate purposes. | ||||||||||||||||
Distributions | ||||||||||||||||
Distributions are declared and distributed within 45 days following the end of each quarter. The Partnership has declared quarterly distributions per unit to unitholders of record, including holders of common, subordinated and general partner units during the three and nine months ended September 30, 2014 and 2013, as shown in the following table (in thousands): | ||||||||||||||||
Distributions | Common Units | Subordinated Units | General Partner Units | Total | ||||||||||||
2014 | ||||||||||||||||
First Quarter (1) | $ | 4,681 | $ | 1,268 | $ | 89 | $ | 6,038 | ||||||||
Second Quarter (2) | $ | 7,852 | $ | 1,279 | $ | 90 | $ | 9,221 | ||||||||
Third Quarter (3) | $ | 9,025 | $ | 1,290 | $ | 91 | $ | 10,406 | ||||||||
2013 | ||||||||||||||||
Second Quarter (4) | $ | 1,857 | $ | 604 | $ | 43 | $ | 2,504 | ||||||||
Third Quarter (1) | $ | 3,895 | $ | 1,268 | $ | 89 | $ | 5,252 | ||||||||
__________ | ||||||||||||||||
(1) Reflects quarterly distributions of $0.575 per unit paid in the third quarter of 2013 and the first quarter of 2014. | ||||||||||||||||
(2) Reflects quarterly distributions of $0.58 per unit paid in the second quarter of 2014. | ||||||||||||||||
(3) Reflects quarterly distributions of $0.585 per unit paid in the third quarter of 2014. | ||||||||||||||||
(4) Prorated to reflect 47 days of the quarterly cash distribution of $0.525 per unit paid in the second quarter of 2013. | ||||||||||||||||
Pursuant to our Partnership Agreement, to the extent that the quarterly distributions exceed certain targets, our general partner is entitled to receive certain incentive distributions that will result in more earnings proportionately being allocated to the general partner than to the holders of common units and subordinated units. No such incentive distributions were made to our general partner as quarterly distributions declared by the board of directors for the first, second or third quarters of 2014 and 2013 did not exceed the specified targets. | ||||||||||||||||
See Note 16 "Subsequent Events" for discussion of distribution declared in October 2014. | ||||||||||||||||
Noncontrolling Interest | ||||||||||||||||
As part of the MCE Acquisition, certain former owners of MCE retained 100 Class B Units in MCE. The MCE partnership agreement provides that the Class B Units have the right to receive an increasing percentage (15%, 25% and 50%) of quarterly distributions of available cash from operating surplus after the minimum quarterly distribution and the target distribution levels have been achieved based on results of MCES and MCCS. Target distribution levels are adjusted, as applicable and in accordance with the MCE partnership agreement, under certain circumstances. As these Class B Units are not held by the Partnership, they are presented as noncontrolling interest in the accompanying unaudited condensed consolidated financial statements. Any distribution to the Class B Units will be recognized in the period earned and recorded as a reduction to net income attributable to the Partnership. | ||||||||||||||||
As a result of the MCCS Acquisition, the specified target distribution levels for the allocations of MCE's available cash from operating surplus between the Class A unitholders and the Class B unitholders were adjusted for the contribution of MCCS to MCE by the Partnership as provided for in the MCE partnership agreement. The following table illustrates the allocations of MCE's available cash from operating surplus between the Class A unitholders and the Class B unitholders based on the specified target distribution levels, as adjusted based on the MCCS Acquisition. | ||||||||||||||||
Marginal Percentage Interest in | ||||||||||||||||
Distributions | ||||||||||||||||
Total Quarterly Distributions per MCE Unit | MCE Class A Unitholders (the Partnership) | MCE Class B Unitholders | ||||||||||||||
Minimum Quarterly Distribution | $16,116 | 100% | —% | |||||||||||||
First Target Distribution | $18,533 | to | $20,144 | 85% | 15% | |||||||||||
Second Target Distribution | $20,145 | to | $24,173 | 75% | 25% | |||||||||||
Third Target Distribution and Thereafter | $24,174 | and above | 50% | 50% | ||||||||||||
Based on MCE's distribution amounts, the MCE Class B unitholders were entitled to distributions of approximately $0.2 million for the three months ended September 30, 2014. No distributions were due to the MCE Class B unitholders for the first or second quarter of 2014. | ||||||||||||||||
Equity Compensation | ||||||||||||||||
We may grant awards of the Partnership's common units to employees under the Partnership's Long-Term Incentive Plan ("LTIP") or Fair Market Value Purchase Plan ("FMVPP"). Such awards are valued based upon the market value of common units on the date of grant and expensed over the relevant vesting period to the extent the awards contain a service requirement. If there is no service requirement, the awards are expensed at the time of grant. For the three and nine months ended September 30, 2014, the Partnership recorded equity-based compensation expense of $1.3 million and $1.9 million, respectively. For the nine months ended September 30, 2013, the Partnership recorded equity-based compensation expense of $7.7 million. Additionally, the Partnership had $0.4 million of allocated equity-based compensation from NSEC during the nine months ended September 30, 2013. There was no equity-based compensation expense for the three months ended September 30, 2013. | ||||||||||||||||
Phantom Units. In conjunction with the Services Acquisition, the Partnership granted 432,038 phantom units, which represent the right to receive common units or cash equal to the value of the associated common units, to employees of EFS and RPS under the FMVPP. The phantom units vest over a period not to exceed 2 years. If a phantom unit is forfeited, the associated common units are released from escrow to an entity owned by the former owners of EFS and RPS. Except as otherwise provided in the Phantom Unit Agreement, phantom units subject to forfeiture restrictions may be forfeited upon termination of employment prior to the end of the vesting period. Although ownership of common units related to the vesting of such phantom units does not transfer to the holder until the phantom units vest, the recipients have distribution equivalent rights on these phantom units from the date of grant. | ||||||||||||||||
Although the phantom unit grants may be settled in either common units or cash at the holder's election, the settlement of the phantom units upon vesting will be made from a transfer or sale of the associated common units that were issued to an escrow account in conjunction with the Services Acquisition. As a result, the 401,171 phantom units valued at $9.4 million with a service requirement were measured at fair market value of the Partnership’s common units on the grant date and are being expensed over the vesting period in accordance with accounting guidance for equity compensation. At September 30, 2014, approximately $8.2 million remains to be expensed. The associated common units held in escrow are reflected as contra equity on the accompanying unaudited condensed consolidated balance sheet at September 30, 2014. |
Earnings_per_Unit
Earnings per Unit | 9 Months Ended | |||||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||||||||||
Earnings per Unit | ' | |||||||||||||||||||||||
Earnings per Unit | ||||||||||||||||||||||||
The Partnership’s net income is allocated to the common, subordinated and general partner unitholders, in accordance with their respective ownership percentages, and when applicable, giving effect to unvested units granted under the Partnership’s LTIP and incentive distributions allocable to the general partner. The allocation of undistributed earnings, or net income in excess of distributions, to the incentive distribution rights is limited to available cash (as defined by the partnership agreement) for the period. Basic and diluted net income per unit is calculated by dividing net income by the weighted average number of units outstanding during the period. Any common units issued during the period are included on a weighted average basis for the days in which they were outstanding. During the three and nine months ended September 30, 2014, LTIP awards of 3,257 and 9,664 common units, respectively, were excluded from the computation of diluted loss per unit. The Partnership had no potential common units outstanding as of September 30, 2013. Therefore, basic and diluted earnings per unit are the same for the three and nine months ended September 30, 2013. | ||||||||||||||||||||||||
Basic and diluted earnings per unit for the three and nine months ended September 30, 2014 and 2013 were computed as follows (in thousands, except per unit amounts): | ||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
September 30, 2014 | September 30, 2014 | |||||||||||||||||||||||
Common Units | Subordinated Units | General Partner | Common Units | Subordinated Units | General Partner | |||||||||||||||||||
Net loss | $ | (2,599 | ) | $ | (371 | ) | $ | (26 | ) | $ | (2,503 | ) | $ | (411 | ) | $ | (29 | ) | ||||||
Weighted average units outstanding | 15,429 | 2,205 | 155 | 12,646 | 2,205 | 155 | ||||||||||||||||||
Basic and diluted loss per unit | $ | (0.17 | ) | $ | (0.17 | ) | $ | (0.17 | ) | $ | (0.20 | ) | $ | (0.19 | ) | $ | (0.19 | ) | ||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
September 30, 2013 | September 30, 2013 | |||||||||||||||||||||||
Common Units | Subordinated Units | General Partner | Common Units | Subordinated Units | General Partner | |||||||||||||||||||
Net loss (1) | $ | (1,473 | ) | $ | (479 | ) | $ | (34 | ) | $ | (76 | ) | $ | (430 | ) | $ | (29 | ) | ||||||
Weighted average units outstanding | 6,774 | 2,205 | 155 | 6,480 | 2,205 | 155 | ||||||||||||||||||
Basic and diluted loss per unit | $ | (0.22 | ) | $ | (0.22 | ) | $ | (0.22 | ) | $ | (0.01 | ) | $ | (0.20 | ) | $ | (0.19 | ) | ||||||
__________ | ||||||||||||||||||||||||
-1 | Reflects net loss from February 13, 2013 through September 30, 2013 for the nine months ended September 30, 2013. |
Related_Party_Transactions
Related Party Transactions | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Related Party Transactions [Abstract] | ' | |||||||||||||||
Related Party Transactions | ' | |||||||||||||||
Related Party Transactions | ||||||||||||||||
Ownership. The Partnership is controlled by the Partnership's general partner, which is owned 69.4% by Kristian Kos, the President and Chief Executive Officer of our general partner, and 25.0% by David J. Chernicky, the former Chairman of the board of directors of our general partner. Mr. Kos beneficially owns approximately 5.3% of the Partnership's outstanding common units, including common units awarded under the Partnership's LTIP, and units owned through Deylau, LLC, an entity he controls. As of September 30, 2014, Mr. Chernicky beneficially owned approximately 17.2% of the Partnership's outstanding common units, including common units awarded under the Partnership's LTIP, and units owned through NSEC and Scintilla, entities that he controls. In addition, Mr. Chernicky beneficially owns 100% of the 2,205,000 subordinated units through his control of NSEC. As a result of Mr. Chernicky's ownership of the Partnership and his ownership of all of the membership interests in New Dominion, which operates all of the Partnership's oil and natural gas properties, transactions with New Dominion are deemed to be with a related party. | ||||||||||||||||
New Dominion. New Dominion is an exploration and production operator, which is wholly owned by Mr. Chernicky. Pursuant to various development agreements with the Partnership, New Dominion is currently contracted to operate the Partnership’s existing wells. New Dominion has historically performed this service for NSEC. In addition to the various development agreements, the Partnership, along with other working interest owners, is a party to an agreement with New Dominion in which we reimburse New Dominion for our proportionate share of costs incurred to construct a gas gathering system. In return, we own a portion of such gas gathering system, which facilitates the transportation of our production in the Greater Golden Lane field to the gas processing plant. | ||||||||||||||||
New Dominion acquires leasehold acreage on behalf of the Partnership for which the Partnership is obligated to pay in varying amounts according to agreements applicable to particular areas of mutual interest. The leasehold cost for which the Partnership is obligated was approximately $0.4 million as of both September 30, 2014 and December 31, 2013, all of which is classified as a long-term liability in the accompanying unaudited condensed consolidated balance sheets. The Partnership classifies these amounts as current or long-term liabilities based on the estimated dates of future development of the leasehold, which is customarily when New Dominion invoices the Partnership for these costs. | ||||||||||||||||
Under agreements with New Dominion, the Partnership incurred charges and fees as follows for the three and nine months ended September 30, 2014 and 2013 (in thousands): | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Producing overhead and supervision charges | $ | 624 | $ | 464 | $ | 2,080 | $ | 1,277 | ||||||||
Drilling and completion supervision charges | 60 | 119 | 230 | 246 | ||||||||||||
Saltwater disposal fees | 260 | 329 | 1,075 | 502 | ||||||||||||
Total expenses incurred | $ | 944 | $ | 912 | $ | 3,385 | $ | 2,025 | ||||||||
At September 30, 2014 and December 31, 2013, $2.2 million and $1.3 million, respectively, were due to New Dominion for charges and fees under operating agreements and included in accounts payable - related party in the accompanying unaudited condensed consolidated balance sheets. | ||||||||||||||||
NSEC. Under an agreement by and among NSEC, the Partnership and our general partner, NSEC provided administrative services for the Partnership from February 13, 2013 through December 31, 2013. For the three and nine months ended September 30, 2013, fees paid for such services were $0.7 million and $1.8 million, respectively, and were included in general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations. | ||||||||||||||||
New Source Energy GP, LLC. Effective January 1, 2014, our general partner began billing us for general and administrative expenses related to payroll, employee benefits and employee reimbursements. For the three and nine months ended September 30, 2014, amounts paid to our general partner for such reimbursements were $0.5 million and $1.1 million, respectively, and were included in general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations. Additionally, we received approximately $1.5 million and paid approximately $1.2 million to our general partner during the nine months ended September 30, 2014 for operational cash advances. At September 30, 2014 and December 31, 2013, $0.8 million and $0.4 million, respectively, were due to our general partner for reimbursement and included in accounts payable - related party in the accompanying unaudited condensed consolidated balance sheets. | ||||||||||||||||
Acquisitions. As described in Note 2 "Acquisitions," we acquired oil and natural gas properties, MCE and MCCS from related parties. As these acquisitions were with related parties, the transactions were subject to approval by the board of directors of the Partnership's general partner, based on the approval and recommendation of its conflicts committee. | ||||||||||||||||
As discussed in Note 2 "Acquisitions," Mr. Kos was a 36% owner of MCE prior to the MCE Acquisition. Additionally, Dikran Tourian, President-Oilfield Services Division and member of our general partner's board of directors, was a 36% owner of MCE prior to the MCE Acquisition. In conjunction with the MCE Acquisition, Mr. Kos and Mr. Tourian retained Class B units that are entitled to incentive distributions as discussed in Note 9 "Equity" as well as contingent consideration as discussed in Note 3 "Contingent Consideration." In the third quarter of 2014, the Class B unit distribution targets were met. Distributions of $0.2 million for the Class B unitholders are reflected in accounts payable - related parties in the accompanying unaudited consolidated balance sheet at September 30, 2014. | ||||||||||||||||
On June 26, 2014, we exercised our option to acquire MCCS, which was owned by Mr. Kos and Mr. Tourian. See Note 2 "Acquisitions" for discussion of this acquisition and Note 3 "Contingent Consideration" for discussion of the MCCS Contingent Consideration. As part of the acquisition of MCCS, we assumed a payable to an entity owned by Mr. Kos and Mr. Tourian. As of September 30, 2014, $0.7 million was remaining and reflected in accounts payable - related parties in the accompanying unaudited consolidated balance sheet. | ||||||||||||||||
Transactions with Chief Financial Officer. The Partnership engaged Finley & Cook, PLLC ("Finley & Cook") to provide various accounting services on our behalf during the nine months ended September 30, 2014. Richard Finley, the Chief Financial Officer of our general partner, is an equity member of Finley & Cook, holding a 31.5% ownership interest. The Partnership paid Finley & Cook approximately $0.06 million and $0.4 million in fees for the three and nine months ended September 30, 2014 respectively. NSEC engaged Finley & Cook to provide various accounting services on our behalf during the year ended December 31, 2013. Fees for such accounting services were included in the amounts paid to NSEC, as discussed above. |
Property_Plant_and_Equipment
Property, Plant and Equipment | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||
Property, Plant and Equipment | ' | |||||||
Property, Plant and Equipment | ||||||||
Oil and Natural Gas Properties. We use the full cost method to account for our oil and natural gas properties. Under full cost accounting, all costs directly associated with the acquisition, exploration and development of oil and natural gas reserves are capitalized into a full cost pool. These capitalized costs include costs of all unproved properties, internal costs directly related to our acquisition and exploration and development activities. | ||||||||
Property and equipment, net. Property and equipment, primarily for our oilfield services segment, consisted of the following (in thousands): | ||||||||
30-Sep-14 | 31-Dec-13 | |||||||
Vehicles and transportation equipment | $ | 15,317 | $ | 561 | ||||
Machinery and equipment | 38,746 | 4,757 | ||||||
Office furniture and equipment | 472 | 79 | ||||||
Iron | 11,212 | 2,971 | ||||||
Total | 65,747 | 8,368 | ||||||
Less: accumulated depreciation | (2,466 | ) | (202 | ) | ||||
Property and equipment, net | $ | 63,281 | $ | 8,166 | ||||
Asset_Retirement_Obligations
Asset Retirement Obligations | 9 Months Ended | |||
Sep. 30, 2014 | ||||
Asset Retirement Obligation Disclosure [Abstract] | ' | |||
Asset Retirement Obligation | ' | |||
Asset Retirement Obligations | ||||
A reconciliation of the aggregate carrying amounts of the asset retirement obligations for the period from December 31, 2013 to September 30, 2014 is as follows (in thousands): | ||||
Asset retirement obligation at December 31, 2013 | $ | 3,455 | ||
Liability incurred upon acquiring and drilling wells | 235 | |||
Liability settled or disposed | (32 | ) | ||
Accretion | 219 | |||
Asset retirement obligation at September 30, 2014 | $ | 3,877 | ||
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies | ' |
Commitments and Contingencies | |
Commitments | |
The Partnership is a party to various agreements under which it has rights and obligations to participate in the acquisition and development of undeveloped properties held and to be acquired by Scintilla and New Dominion. These properties will be held by New Dominion for the benefit of the Partnership pending development of the properties. The Partnership is required by its underlying agreements with New Dominion to pay certain acreage fees to reimburse New Dominion for the cost of the acreage attributable to the Partnership’s working interest when invoiced by New Dominion. The Partnership recognizes an asset and corresponding liability as the acreage costs are incurred by New Dominion. See Note 11 "Related Party Transactions." The agreements require us to contribute capital for drilling and completing new wells and related project costs based on our proportionate ownership of each particular new well. There are significant penalties for a party’s election not to participate in a proposed well within the geographical areas covered by the agreements. The agreements also require us to pay New Dominion our proportionate share of maintenance and operating costs of New Dominion’s saltwater disposal wells. | |
On February 13, 2013, in connection with the closing of our initial public offering, the Partnership entered into a development agreement (the "Development Agreement") with NSEC and New Dominion. Pursuant to the Development Agreement, during each of the fiscal years ending December 31, 2013 through December 31, 2016, the Partnership has agreed to maintain an average annual maintenance drilling budget of at least $8.2 million to drill certain of the Partnership’s proved undeveloped locations and maintain the Partnership’s producing wells. As of September 30, 2014, we had incurred $10.5 million towards the annual maintenance drilling budget. | |
See Note 3 "Contingent Consideration" for discussion of contingencies related to certain acquisitions. | |
Legal Matters | |
New Dominion is a defendant in a legal proceeding arising in the normal course of its business, which may impact the Partnership as described below. | |
In the case of Mattingly v. Equal Energy, LLC, New Dominion is a named defendant. In this case, the plaintiffs assert claims on behalf of a class of royalty owners in wells operated by New Dominion and others from which natural gas is sold by New Dominion to Scissortail Energy, LLC ("Scissortail"). The plaintiffs assert that royalties to the class should be paid based upon the price received by Scissortail for the natural gas and its components at the tailgate of the plant, rather than the price paid by Scissortail at the wellhead where the natural gas is purchased. The plaintiffs assert a variety of breach of contract and tort claims. The case was originally filed in the District Court of Creek County, Oklahoma and was removed by the defendants to the federal court but was remanded to state court on August 1, 2011. A hearing on the matter was held August 27, 2014 at which Scissortail’s motion to dismiss was granted with prejudice and New Dominion’s motion to dismiss was granted in part. A hearing date for class certification is expected to be set in November 2014. | |
Any liability on the part of New Dominion, as operator, would be allocated to the working interest owners to pay their proportionate share of such liability. While the outcome and impact on the Partnership of this proceeding cannot be predicted with certainty, management believes a loss of up to $250,000 may be reasonably possible. Due to the uncertainty, no reserve has been established for this matter. | |
The Partnership may be involved in other various routine legal proceedings incidental to its business from time to time. While the results of litigation and claims cannot be predicted with certainty, the Partnership believes the reasonably possible losses of such matters, individually and in the aggregate, are not material. Additionally, the Partnership believes the probable final outcome of such matters will not have a material adverse effect on the Partnership's consolidated financial position, results of operations, cash flow or liquidity. |
Business_Segment_Information
Business Segment Information | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||
Business Segment Information | ' | ||||||||||||
Business Segment Information | |||||||||||||
The Partnership operates in two business segments: (i) exploration and production and (ii) oilfield services. These segments represent the Partnership’s two main business units, each offering different products and services. The exploration and production segment is engaged in the development and production of oil and natural gas properties and its general and administrative expenses include certain costs of our corporate administrative functions and changes in the fair value of contingent consideration obligations related to all acquisitions. The oilfield services segment provides full service blowout prevention installation and pressure testing services, including certain ancillary equipment necessary to perform such services, as well as well testing and flowback services. Our oilfield services segment is the aggregation of multiple operating segments that meet the criteria for aggregation due to the economic similarities as well as the similarities in the nature of the services provided, customers served and industry regulations monitored. | |||||||||||||
Management evaluates the performance of the Partnership’s business segments based on the excess of revenue over direct operating expenses or segment margin. Summarized financial information concerning the Partnership’s segments is shown in the following tables (in thousands): | |||||||||||||
Exploration and Production | Oilfield Services (1) | Total | |||||||||||
Three Months Ended September 30, 2014 | |||||||||||||
Revenues | $ | 15,561 | $ | 40,863 | $ | 56,424 | |||||||
Direct operating expenses | 5,562 | 24,315 | 29,877 | ||||||||||
Segment margin | $ | 9,999 | $ | 16,548 | $ | 26,547 | |||||||
General and administrative expenses | 7,354 | 6,431 | 13,785 | ||||||||||
Depreciation, depletion, amortization and accretion | 6,834 | 11,003 | 17,837 | ||||||||||
Loss from operations | $ | (4,189 | ) | $ | (886 | ) | $ | (5,075 | ) | ||||
Capital expenditures (2) | $ | 824 | $ | 3,735 | $ | 4,559 | |||||||
Three Months Ended September 30, 2013 | |||||||||||||
Revenues | $ | 12,431 | $ | — | $ | 12,431 | |||||||
Direct operating expenses | 3,985 | — | 3,985 | ||||||||||
Segment margin | $ | 8,446 | $ | — | $ | 8,446 | |||||||
General and administrative expenses | 1,353 | — | 1,353 | ||||||||||
Depreciation, depletion, amortization and accretion | 4,972 | — | 4,972 | ||||||||||
Income from operations | $ | 2,121 | $ | — | $ | 2,121 | |||||||
Capital expenditures (2) | $ | 14,745 | $ | — | $ | 14,745 | |||||||
__________ | |||||||||||||
-1 | The Partnership's oilfield services segment was established with the MCE Acquisition that occurred in November 2013. See Note 2 "Acquisitions" for discussion. | ||||||||||||
-2 | On an accrual basis and exclusive of acquisitions. | ||||||||||||
Exploration and Production | Oilfield Services (1) | Total | |||||||||||
Nine Months Ended September 30, 2014 | |||||||||||||
Revenues | $ | 51,130 | $ | 59,539 | $ | 110,669 | |||||||
Direct operating expenses | 16,252 | 34,849 | 51,101 | ||||||||||
Segment margin | $ | 34,878 | $ | 24,690 | $ | 59,568 | |||||||
General and administrative expenses | 13,220 | 9,615 | 22,835 | ||||||||||
Depreciation, depletion, amortization and accretion | 19,692 | 17,856 | 37,548 | ||||||||||
Income (loss) from operations | $ | 1,966 | $ | (2,781 | ) | $ | (815 | ) | |||||
Capital expenditures (2) | $ | 19,284 | $ | 6,726 | $ | 26,010 | |||||||
At September 30, 2014 | |||||||||||||
Total assets | $ | 194,541 | $ | 239,983 | $ | 434,524 | |||||||
Nine Months Ended September 30, 2013 | |||||||||||||
Revenues | $ | 32,440 | $ | — | $ | 32,440 | |||||||
Direct operating expenses | 10,698 | — | 10,698 | ||||||||||
Segment margin | $ | 21,742 | $ | — | $ | 21,742 | |||||||
General and administrative expenses (3) | 11,452 | — | 11,452 | ||||||||||
Depreciation, depletion, amortization and accretion | 11,831 | — | 11,831 | ||||||||||
Loss from operations | $ | (1,541 | ) | $ | — | $ | (1,541 | ) | |||||
Capital expenditures (2) | $ | 18,261 | $ | — | $ | 18,261 | |||||||
At December 31, 2013 | |||||||||||||
Total assets | $ | 181,440 | $ | 73,270 | $ | 254,710 | |||||||
__________ | |||||||||||||
-1 | The Partnership's oilfield services segment was established with the MCE Acquisition that occurred in November 2013. See Note 2 "Acquisitions" for discussion. | ||||||||||||
-2 | On an accrual basis and exclusive of acquisitions. | ||||||||||||
-3 | Includes $7.7 million of compensation expense related to common units granted to consultants, officers, directors and employees in conjunction with our initial public offering. |
Subsequent_Events
Subsequent Events | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Subsequent Events [Abstract] | ' | ||||||||||||||||
Subsequent Events | ' | ||||||||||||||||
Subsequent Events | |||||||||||||||||
Equity Offering. On October 3, 2014, the Partnership and our general partner entered into an Equity Distribution Agreement (the “Agreement”) with BMO Capital Markets Corp. (the “Sales Agent”). Pursuant to the terms of the Agreement, the Partnership may sell, from time to time through or to the Sales Agent, common units representing limited partner interests in the Partnership having an aggregate offering price of up to $50.0 million. Sales of such common units, if any, will be made by means of ordinary brokers’ transactions through the facilities of the New York Stock Exchange at market prices, or as otherwise agreed by the Partnership and the Sales Agent. On October 6, 2014, the Partnership sold 720,000 common units under the Agreement for net proceeds of approximately $16.4 million. Proceeds will be used to pay down a portion of the Partnership's credit facility and for general corporate purposes. | |||||||||||||||||
Distributions. On October 21, 2014, the Partnership declared quarterly distributions of $0.585 per unit to unitholders of record, including holders of common, subordinated and general partner units for the three months ended September 30, 2014. The following distributions will be paid on November 14, 2014 to holders of record as of the close of business on November 3, 2014 (in thousands): | |||||||||||||||||
Common Units | Subordinated Units | General Partner Units | Total | ||||||||||||||
Distributions | $ | 9,454 | $ | 1,290 | $ | 91 | $ | 10,835 | |||||||||
Lease. On October 27, 2014, MCE entered into a master lease agreement whereby it can enter into capital leases for certain property and equipment totaling up to $25 million. The master lease agreement does not obligate MCE to enter into any such leases, and no amounts are currently outstanding under this master lease agreement. |
Basis_of_Presentation_Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Interim Financial Statements | ' |
Interim Financial Statements. The accompanying condensed consolidated financial statements as of December 31, 2013 have been derived from the audited financial statements contained in the Partnership’s 2013 Form 10-K. The unaudited interim condensed consolidated financial statements have been prepared by the Partnership in accordance with the accounting policies stated in the audited consolidated financial statements contained in the 2013 Form 10-K. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted, although the Partnership believes that the disclosures contained herein are adequate to make the information presented not misleading. In the opinion of management, all adjustments, which consist only of normal recurring adjustments, necessary to state fairly the information in the Partnership’s accompanying unaudited condensed consolidated financial statements have been included. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the 2013 Form 10-K. | |
Reclassifications | ' |
Reclassifications. Certain reclassifications have been made to the prior period financial statements to conform to the current period presentation. These reclassifications have no effect on the Partnership's previously reported results of operations. | |
Use of Estimates | ' |
Use of Estimates. The preparation of the Partnership’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities that exist at the date of the Partnership’s consolidated financial statements, as well as the reported amounts of revenue and expenses during the reporting periods. The Partnership’s consolidated financial statements are based on a number of significant estimates, including oil, natural gas and NGL reserves, revenue and expense accruals, depreciation, depletion and amortization, fair value of derivative instruments and contingent consideration, the allocation of purchase price to the fair value of assets acquired and liabilities assumed and asset retirement obligations. Actual results could differ from those estimates. | |
Recently Issued Accounting Standard | ' |
Recently Issued Accounting Standard. In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers, ("ASU 2014-09"), which revises the guidance on revenue recognition by providing a single, principles-based method for companies to use to account for revenue arising from contracts with customers. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires disclosures enabling users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014-09 is effective for fiscal years beginning after December 15, 2016 and is to be applied retrospectively. Early application is not permitted. We are in the process of assessing the potential impact of ASU 2014-09 on the Partnership's financial statements. | |
Oil and Natural Gas Properties | ' |
Oil and Natural Gas Properties. We use the full cost method to account for our oil and natural gas properties. Under full cost accounting, all costs directly associated with the acquisition, exploration and development of oil and natural gas reserves are capitalized into a full cost pool. These capitalized costs include costs of all unproved properties, internal costs directly related to our acquisition and exploration and development activities. |
Acquisitions_Tables
Acquisitions (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Business Combinations [Abstract] | ' | |||||||
Schedule of Business Acquisitions, by Acquisition | ' | |||||||
Total consideration for the MCE Acquisition is as follows (in thousands): | ||||||||
Consideration: | ||||||||
Cash | $ | 3,781 | ||||||
Fair value of common units granted (1) | 41,822 | |||||||
Common units granted to MCE employees (2) | 2,259 | |||||||
Contingent consideration (3) | 6,320 | |||||||
MCE Class B units granted (4) | 13,988 | |||||||
Total fair value of consideration | $ | 68,170 | ||||||
__________ | ||||||||
-1 | The fair value of the unit consideration was based upon 1,847,265 common units valued at $22.64 per unit (closing price on the date of the acquisition). | |||||||
-2 | The fair value of the unit consideration was based upon 99,768 common units valued at $22.64 per unit (closing price on the date of the acquisition). These common units were issued to certain employees of MCE under the Partnership’s long-term incentive plan, primarily for service prior to the acquisition. Any forfeited common units do not revert to the Partnership, but would be distributed to the former owners of MCE. | |||||||
-3 | The owners of MCE are entitled to receive additional common units in the second quarter of 2015 based on a specified multiple of the annualized EBITDA of MCES for the trailing nine month period ending March 31, 2015, less certain adjustments, subject to a $120.0 million cap ("MCE Contingent Consideration"). The MCE Contingent Consideration was valued at $6.3 million at the acquisition date through the use of a Monte Carlo simulation. See Note 3 "Contingent Consideration" for additional discussion of the MCE Contingent Consideration. | |||||||
-4 | Certain former owners of MCE retained Class B Units, which entitle the holders to receive incentive distributions of cash distributed by MCE above specified thresholds in increasing amounts. See Note 9 "Equity" for additional discussion of these incentive distributions. The Class B units were valued at $14.0 million at the acquisition date through the use of a Monte Carlo simulation. | |||||||
The total purchase price allocated to the assets acquired and liabilities assumed based upon fair value on the date of acquisition, net of purchase price adjustments, is as follows (in thousands): | ||||||||
Consideration: | ||||||||
Cash | $ | 5,503 | ||||||
Fair value of common units granted (1) | 11,621 | |||||||
Contingent consideration (2) | — | |||||||
Total fair value of consideration | $ | 17,124 | ||||||
Fair value of assets acquired and liabilities assumed: | ||||||||
Proved oil and natural gas properties | $ | 17,306 | ||||||
Asset retirement obligations | (182 | ) | ||||||
Total net assets | $ | 17,124 | ||||||
__________ | ||||||||
-1 | The fair value of the unit consideration was based upon 488,667 common units valued at $23.78 per unit (closing price on the date of the acquisition). | |||||||
-2 | The Partnership agreed to provide additional consideration to CEU if average daily production attributable to the acquired working interests exceeds a specified average daily production during a specified period (the "CEU Contingent Consideration"). See Note 3 "Contingent Consideration" for additional discussion of the CEU Contingent Consideration. | |||||||
The total purchase price allocated to the assets acquired and liabilities assumed based upon fair value on the date of acquisition is as follows (in thousands): | ||||||||
Fair value of assets acquired and liabilities assumed: | ||||||||
Proved oil and natural gas properties | $ | 8,165 | ||||||
Asset retirement obligations | (19 | ) | ||||||
Other liabilities | (254 | ) | ||||||
Total net assets | $ | 7,892 | ||||||
The total purchase price allocated to the assets acquired and liabilities assumed based upon fair value on the date of acquisition is as follows (in thousands): | ||||||||
Fair value of assets acquired and liabilities assumed: | ||||||||
Proved oil and natural gas properties | $ | 3,274 | ||||||
Asset retirement obligations | (24 | ) | ||||||
Other liabilities | (20 | ) | ||||||
Total net assets | $ | 3,230 | ||||||
The following table summarizes the assets acquired and the liabilities assumed as of the acquisition date at estimated fair value (in thousands): | ||||||||
Fair value of assets acquired and liabilities assumed: | ||||||||
Cash | $ | 109 | ||||||
Accounts receivable | 524 | |||||||
Inventory | 2,035 | |||||||
Other current assets | 14 | |||||||
Property and equipment | 107 | |||||||
Intangible asset (1) | 1,700 | |||||||
Goodwill (2) | 4,060 | |||||||
Other assets | 28 | |||||||
Total assets acquired | 8,577 | |||||||
Accounts payable and accrued liabilities | (1,431 | ) | ||||||
Long-term debt | (791 | ) | ||||||
Total liabilities assumed | (2,222 | ) | ||||||
Net assets acquired | $ | 6,355 | ||||||
__________ | ||||||||
-1 | Customer relationships, an identifiable intangible asset, were valued based on the estimated free cash flows the customer relationships are expected to provide and are amortized using an accelerated method over seven years. | |||||||
-2 | Goodwill is calculated as the excess of the consideration transferred over the fair value of net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Such goodwill is not deductible for tax purposes. Specifically, the goodwill recorded as part of the acquisition of MCCS includes any intangible assets that do not qualify for separate recognition, such as the MCCS trained, skilled and assembled workforce, along with the expected synergies from leveraging the customer relationships and integrating new product offerings into MCCS's business. Goodwill has been allocated to the oilfield services segment. | |||||||
Total consideration for the Services Acquisition is as follows (in thousands): | ||||||||
Consideration: | ||||||||
Cash | $ | 57,348 | ||||||
Fair value of common units granted (1) | 33,106 | |||||||
Common units granted for the benefit of EFS and RPS employees (2) | 724 | |||||||
Contingent consideration (3) | 21,984 | |||||||
Total fair value of consideration | $ | 113,162 | ||||||
__________ | ||||||||
-1 | The fair value of the unit consideration was based upon 1,411,777 common units valued at $23.45 per unit (closing price on the date of the acquisition). | |||||||
-2 | The fair value of the unit consideration was based upon 30,867 common units valued at $23.45 per unit (closing price on the date of the transaction). These units were issued to satisfy the settlement of phantom units granted to EFS employees with no service requirement. An additional 401,171 common units were issued and are held in escrow to satisfy the future settlement of phantom units granted to EFS and RPS employees in conjunction with the Services Acquisition are excluded from consideration based on the future service requirement for vesting. See Note 9 "Equity" for additional discussion of phantom units. | |||||||
-3 | The former owners of EFS and RPS are entitled to receive additional consideration in the second quarter of 2015 based on a specified multiple of the annualized EBITDA of EFS and RPS for the year ending December 31, 2014, less certain adjustments ("EFS/RPS Contingent Consideration"). The EFS/RPS Contingent Consideration was valued at $22.0 million at the acquisition date through the use of a probability analysis. See Note 3 "Contingent Consideration" for additional discussion of the EFS/RPS Contingent Consideration. During the three months ended September 30, 2014, a purchase price allocation adjustment was made for approximately $4.8 million to increase the value of the contingent consideration based on additional information made available. | |||||||
The following table summarizes the assets acquired and the liabilities assumed as of the acquisition date at estimated fair value (in thousands): | ||||||||
Fair value of assets acquired and liabilities assumed: | ||||||||
Cash | $ | 1,668 | ||||||
Accounts receivable | 21,611 | |||||||
Other current assets (1) | 620 | |||||||
Property and equipment (1) | 43,853 | |||||||
Intangible assets (2) | 68,700 | |||||||
Goodwill (1) (3) | 15,397 | |||||||
Total assets acquired | 151,849 | |||||||
Accounts payable and accrued liabilities (1) | (6,047 | ) | ||||||
Factoring payable | (15,840 | ) | ||||||
Long-term debt | (16,800 | ) | ||||||
Total liabilities assumed | (38,687 | ) | ||||||
Net assets acquired | $ | 113,162 | ||||||
__________ | ||||||||
-1 | Includes purchase price allocation adjustments, resulting in an increase totaling $3.7 million to goodwill, during the three months ended September 30, 2014, based on additional information received primarily on other current assets and property and equipment acquired. | |||||||
-2 | Identifiable intangible assets include $64.2 million for customer relationships and $4.5 million for non-compete agreements. Customer relationships were valued based on the estimated free cash flows the customer relationships are expected to provide and are amortized using an accelerated method over seven years. Non-compete agreements were valued based on an income approach and are amortized over the agreement period. | |||||||
-3 | Goodwill is calculated as the excess of the consideration transferred over the fair value of net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Such goodwill is not deductible for tax purposes. Specifically, the goodwill recorded as part of the Services Acquisition includes any intangible assets that do not qualify for separate recognition, such as the EFS and RPS trained, skilled and assembled workforce, along with the expected synergies from leveraging the customer relationships. Goodwill has been allocated to the oilfield services segment. During the three months ended, a purchase price allocation adjustment was made to increase the amount assigned to goodwill by approximately $3.7 million, primarily as a result of an increase to the value of the contingent consideration based on additional information made available. | |||||||
The total purchase price allocated to the assets acquired and liabilities assumed based upon fair value on the date of acquisition is as follows (in thousands): | ||||||||
Fair value of assets acquired and liabilities assumed: | ||||||||
Proved oil and natural gas properties | $ | 29,049 | ||||||
Other assets | 754 | |||||||
Asset retirement obligations | (1,333 | ) | ||||||
Other liabilities | (488 | ) | ||||||
Total net assets | $ | 27,982 | ||||||
Total consideration for the MCCS Acquisition is as follows (in thousands): | ||||||||
Consideration: | ||||||||
Fair value of common units granted (1) | $ | 789 | ||||||
Contingent consideration (2) | 4,057 | |||||||
Noncontrolling interest (3) | 1,509 | |||||||
Total fair value of consideration | $ | 6,355 | ||||||
__________ | ||||||||
-1 | The fair value of the unit consideration was based upon 33,646 common units valued at $23.45 per unit (closing price on the date of the acquisition). | |||||||
-2 | The owners of MCCS are entitled to receive additional common units in the second quarter of 2015 based on a specified multiple of the annualized EBITDA of MCCS for the trailing nine month period ending March 31, 2015, less certain adjustments, subject to a $4.5 million cap ("MCCS Contingent Consideration"). The MCCS Contingent Consideration was valued at $4.1 million at the acquisition date through the use of a Monte Carlo simulation. See Note 3 "Contingent Consideration" for additional discussion of the MCCS Contingent Consideration. | |||||||
-3 | As a condition of the acquisition agreement, MCCS was contributed to MCE by the Partnership, which increased the value of the noncontrolling interest held by MCE's Class B unitholders. The increase in the value of the noncontrolling interest that resulted from this is part of the total consideration paid for the MCCS Acquisition and was valued at the acquisition date through the use of a Monte Carlo simulation. | |||||||
The total purchase price allocated to the assets acquired and liabilities assumed based upon fair value on the date of acquisition is as follows (in thousands): | ||||||||
Fair value of assets acquired and liabilities assumed: | ||||||||
Proved oil and natural gas properties | $ | 4,888 | ||||||
Asset retirement obligations | (4 | ) | ||||||
Other liabilities | (18 | ) | ||||||
Total net assets | $ | 4,866 | ||||||
The total purchase price allocated to the assets acquired and liabilities assumed based upon fair value on the date of acquisition is as follows (in thousands): | ||||||||
Consideration: | ||||||||
Cash | $ | 4,260 | ||||||
Fair value of common units granted (1) | 8,608 | |||||||
Contingent consideration (2) | 1,600 | |||||||
Total fair value of consideration | $ | 14,468 | ||||||
Fair value of assets acquired and liabilities assumed: | ||||||||
Proved oil and natural gas properties | $ | 15,190 | ||||||
Asset retirement obligations | (170 | ) | ||||||
Other liabilities | (552 | ) | ||||||
Total net assets | $ | 14,468 | ||||||
__________ | ||||||||
-1 | The fair value of the unit consideration was based upon 414,045 common units valued at $20.79 per unit (closing price on the date of the acquisition). | |||||||
-2 | The Partnership agreed to provide additional consideration to Scintilla if average daily production attributable to the acquired working interests exceeds a specified average daily production during the specified period (the "Southern Dome Contingent Consideration"). See Note 3 "Contingent Consideration" for additional discussion of the Southern Dome Contingent Consideration. | |||||||
The total purchase price allocated to the assets acquired and liabilities assumed based upon fair value on the date of acquisition is as follows (in thousands): | ||||||||
Fair value of assets acquired and liabilities assumed: | ||||||||
Cash | $ | 1,522 | ||||||
Accounts receivable | 3,365 | |||||||
Other current assets | 954 | |||||||
Property and equipment | 7,923 | |||||||
Intangible asset (1) | 36,772 | |||||||
Goodwill (2) (3) | 24,077 | |||||||
Other assets | 19 | |||||||
Total assets acquired | 74,632 | |||||||
Accounts payable and accrued liabilities (3) | (2,448 | ) | ||||||
Factoring payable | (1,679 | ) | ||||||
Long-term debt | (2,335 | ) | ||||||
Total liabilities assumed | (6,462 | ) | ||||||
Net assets acquired | $ | 68,170 | ||||||
__________ | ||||||||
-1 | Customer relationships, an identifiable intangible asset, were valued based on the estimated free cash flows the customer relationships are expected to provide and are amortized using an accelerated method over seven years. | |||||||
-2 | Goodwill is calculated as the excess of the consideration transferred over the fair value of net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Such goodwill is not deductible for tax purposes. Specifically, the goodwill recorded as part of the acquisition of MCE includes any intangible assets that do not qualify for separate recognition, such as the MCE trained, skilled and assembled workforce, along with the expected synergies from leveraging the customer relationships and integrating new product offerings into MCE's business. Goodwill has been allocated to the oilfield services segment. | |||||||
-3 | Includes purchase price allocation adjustment of $0.1 million made during the three months ended September 30, 2014 based on additional information received on accounts payable assumed. | |||||||
Summary of Operating Results | ' | |||||||
Three Months Ended September 30, 2013 | Nine Months Ended September 30, 2013 | |||||||
(in thousands) | ||||||||
Revenue | $ | 4,197 | $ | 6,974 | ||||
Excess of revenues over direct operating expenses | $ | 2,180 | $ | 3,350 | ||||
Three Months Ended September 30, 2014 | Nine Months Ended September 30, 2014 | |||||||
(in thousands) | ||||||||
Revenue | $ | 30,110 | $ | 35,047 | ||||
Operating income | $ | 590 | $ | 2,786 | ||||
Business Acquisition, Pro Forma Information | ' | |||||||
Three Months Ended September 30, 2013 | Nine Months Ended September 30, 2013 | |||||||
(in thousands, except per unit amounts) | ||||||||
Revenue | $ | 65,673 | $ | 136,851 | ||||
Net loss attributable to New Source Energy Partners L.P. (1) | $ | (3,971 | ) | $ | (10,647 | ) | ||
Net loss per common unit (1): | ||||||||
Basic | $ | (0.24 | ) | $ | (0.83 | ) | ||
Diluted | $ | (0.24 | ) | $ | (0.83 | ) | ||
__________ | ||||||||
(1) Includes $1.6 million of the Partnership's acquisition costs related to the 2014 Material Acquisitions in the nine months ended September 30, 2013. | ||||||||
Nine Months Ended September 30, 2014 | ||||||||
(in thousands, except per unit amounts) | ||||||||
Revenue | $ | 172,590 | ||||||
Net income attributable to New Source Energy Partners L.P. (1) | $ | 5,084 | ||||||
Net income per common unit (1): | ||||||||
Basic | $ | 0.31 | ||||||
Diluted | $ | 0.31 | ||||||
__________ | ||||||||
-1 | Excludes $24.3 million of acquisition costs and transaction bonuses paid to EFS and RPS employees that were included in the historical results of the Partnership, EFS or RPS. |
Contingent_Consideration_Table
Contingent Consideration (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||||||
Schedule of Business Acquisitions by Acquisition, Contingent Consideration | ' | |||||||
A reconciliation of the beginning and ending balances of acquisition-related contingent consideration for the three and nine months ended September 30, 2014 is as follows (in thousands): | ||||||||
Three Months Ended September 30, 2014 | Nine Months Ended September 30, 2014 | |||||||
Contingent consideration, beginning balance | $ | 26,609 | $ | 6,320 | ||||
Acquisition date fair value of contingent consideration - CEU Acquisition | — | — | ||||||
Acquisition date fair value of contingent consideration - MCCS Acquisition | — | 4,057 | ||||||
Acquisition date fair value of contingent consideration - Services Acquisition | 4,841 | 21,984 | ||||||
Change in fair value of contingent consideration | 5,404 | 4,493 | ||||||
Settlement of contingent consideration | — | — | ||||||
Contingent consideration, ending balance | $ | 36,854 | $ | 36,854 | ||||
Debt_Tables
Debt (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Schedule of Debt | ' | |||||||
The Partnership's debt consists of the following (in thousands): | ||||||||
30-Sep-14 | 31-Dec-13 | |||||||
Credit facility | $ | 92,250 | $ | 78,500 | ||||
Notes payable | 21,889 | 2,233 | ||||||
Line of credit | 3,294 | — | ||||||
Total debt | 117,433 | 80,733 | ||||||
Less: current maturities of long-term debt | 21,132 | 719 | ||||||
Long-term debt | $ | 96,301 | $ | 80,014 | ||||
Derivative_Contracts_Tables
Derivative Contracts (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Derivative [Line Items] | ' | ||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | ' | ||||||||||||||||
The following table summarizes our derivative contracts on a gross basis, the effects of netting assets and liabilities for which the right of offset exists (in thousands): | |||||||||||||||||
30-Sep-14 | Gross Amounts of Recognized Assets and Liabilities | Gross Amounts Offset | Net Amounts Presented | ||||||||||||||
Assets: | |||||||||||||||||
Commodity derivatives - current assets | $ | 1,065 | $ | (404 | ) | $ | 661 | ||||||||||
Commodity derivatives - long-term assets | 565 | (6 | ) | 559 | |||||||||||||
Total | $ | 1,630 | $ | (410 | ) | $ | 1,220 | ||||||||||
Liabilities: | |||||||||||||||||
Commodity derivatives - current liabilities | $ | 1,012 | $ | (404 | ) | $ | 608 | ||||||||||
Commodity derivatives - long-term liabilities | 43 | (6 | ) | 37 | |||||||||||||
Total | $ | 1,055 | $ | (410 | ) | $ | 645 | ||||||||||
31-Dec-13 | Gross Amounts of Recognized Assets and Liabilities | Gross Amounts Offset | Net Amounts Presented | ||||||||||||||
Assets: | |||||||||||||||||
Commodity derivatives - current assets | $ | 1,342 | $ | (1,212 | ) | $ | 130 | ||||||||||
Commodity derivatives - long-term assets | 1,638 | (978 | ) | 660 | |||||||||||||
Total | $ | 2,980 | $ | (2,190 | ) | $ | 790 | ||||||||||
Liabilities: | |||||||||||||||||
Commodity derivatives - current liabilities | $ | 4,379 | $ | (1,212 | ) | $ | 3,167 | ||||||||||
Commodity derivatives - long-term liabilities | 1,015 | (978 | ) | 37 | |||||||||||||
Total | $ | 5,394 | $ | (2,190 | ) | $ | 3,204 | ||||||||||
The following table sets forth a reconciliation of our derivative contracts measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended September 30, 2013 and nine months ended September 30, 2014 and 2013 (in thousands): | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2013 | 2014 | 2013 | |||||||||||||||
Beginning balance | $ | 1,866 | $ | (2,517 | ) | $ | (112 | ) | |||||||||
Loss on derivative contracts | (3,277 | ) | (2,432 | ) | (1,522 | ) | |||||||||||
Transfers out (1) | — | 2,843 | — | ||||||||||||||
Cash paid upon settlement | 446 | 2,106 | 669 | ||||||||||||||
Ending balance | $ | (965 | ) | $ | — | $ | (965 | ) | |||||||||
Unrealized losses included in earnings relating to derivatives held at period end | $ | (2,677 | ) | $ | — | $ | (884 | ) | |||||||||
The following table sets forth by level within the fair value hierarchy the Partnership’s financial assets and liabilities that were measured at fair value on a recurring basis (in thousands): | |||||||||||||||||
30-Sep-14 | Fair Value Measurements | ||||||||||||||||
Description | Active Markets for Identical Assets (Level 1) | Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | Total Carrying Value | |||||||||||||
Oil and natural gas collars | $ | — | $ | 157 | $ | — | $ | 157 | |||||||||
Oil, natural gas and NGL put options | — | 539 | — | 539 | |||||||||||||
Oil, natural gas and NGL fixed price swaps | — | (121 | ) | — | (121 | ) | |||||||||||
Contingent consideration | — | — | (36,854 | ) | (36,854 | ) | |||||||||||
Total | $ | — | $ | 575 | $ | (36,854 | ) | $ | (36,279 | ) | |||||||
31-Dec-13 | Fair Value Measurements | ||||||||||||||||
Description | Active Markets for Identical Assets (Level 1) | Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | Total Carrying Value | |||||||||||||
Oil collars | $ | — | $ | (57 | ) | $ | — | $ | (57 | ) | |||||||
Natural gas collars | — | — | (9 | ) | (9 | ) | |||||||||||
Oil put options | — | 28 | — | 28 | |||||||||||||
Natural gas and NGL put options | — | — | 403 | 403 | |||||||||||||
Oil and natural gas fixed price swaps | — | 132 | — | 132 | |||||||||||||
NGL fixed price swaps | — | — | (2,911 | ) | (2,911 | ) | |||||||||||
Contingent consideration | — | — | (6,320 | ) | (6,320 | ) | |||||||||||
Total | $ | — | $ | 103 | $ | (8,837 | ) | $ | (8,734 | ) | |||||||
Schedule of Derivative Instruments | ' | ||||||||||||||||
At September 30, 2014, the Partnership's derivative contracts consisted of collars, put options, and fixed price swaps, as described below: | |||||||||||||||||
Collars | The instrument contains a fixed floor price (long put option) and ceiling price (short call option), where the purchase price of the put option equals the sales price of the call option. At settlement, if the market price exceeds the ceiling price, the Partnership pays the difference between the market price and the ceiling price. If the market price is less than the fixed floor price, the Partnership receives the difference between the fixed floor price and the market price. If the market price is between the ceiling and the fixed floor price, no payments are due from either party. | ||||||||||||||||
Collars - three way | Three-way collars have two fixed floor prices (a purchased put and a sold put) and a fixed ceiling price (call). The purchased put establishes a minimum price unless the market price falls below the sold put, at which point the minimum price would be the New York Mercantile Exchange plus the difference between the purchased put strike price and the sold put strike price. The call establishes a maximum price (ceiling) the Partnership will receive for the volumes under the contract. | ||||||||||||||||
Put options | The Partnership periodically buys put options. At the time of settlement, if market prices are below the fixed price of the put option, the Partnership is entitled to the difference between the put option and the fixed price. | ||||||||||||||||
Fixed price swaps | The Partnership receives a fixed price for the contract and pays a floating market price to the counterparty over a specified period for a contracted volume. | ||||||||||||||||
Derivative Instruments, Gain (Loss) | ' | ||||||||||||||||
The following table presents gain (loss) on our derivative contracts as included in the accompanying unaudited statements of operations for the three and nine months ended September 30, 2014 and 2013 (in thousands): | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Total gain (loss) on derivative contracts, net (1) | $ | 3,768 | $ | (3,453 | ) | $ | (760 | ) | $ | (2,597 | ) | ||||||
Oil Collar | ' | ||||||||||||||||
Derivative [Line Items] | ' | ||||||||||||||||
Schedule of Derivative Instruments | ' | ||||||||||||||||
The following tables present our derivative instruments outstanding as of September 30, 2014: | |||||||||||||||||
Oil collars | Volumes | Floor Price | Ceiling Price | ||||||||||||||
(Bbls) | |||||||||||||||||
2014 | 23,763 | $ | 80 | $ | 103.5 | ||||||||||||
2015 | 42,649 | $ | 80 | $ | 93.25 | ||||||||||||
Oil Collars - Three Way | ' | ||||||||||||||||
Derivative [Line Items] | ' | ||||||||||||||||
Schedule of Derivative Instruments | ' | ||||||||||||||||
Oil collars - three way | Volumes | Sold Put | Purchased Put | Ceiling Price | |||||||||||||
(Bbls) | |||||||||||||||||
2015 | 36,500 | $ | 77.5 | $ | 92.5 | $ | 102.6 | ||||||||||
Natural Gas Collars | ' | ||||||||||||||||
Derivative [Line Items] | ' | ||||||||||||||||
Schedule of Derivative Instruments | ' | ||||||||||||||||
Natural gas collars | Volumes | Floor Price | Ceiling Price | ||||||||||||||
(MMBtu) | |||||||||||||||||
2014 | 260,751 | $ | 4 | $ | 4.41 | ||||||||||||
2015 | 1,362,382 | $ | 4 | $ | 4.32 | ||||||||||||
Oil Options | ' | ||||||||||||||||
Derivative [Line Items] | ' | ||||||||||||||||
Schedule of Derivative Instruments | ' | ||||||||||||||||
Oil put options | Volumes (Bbls) | Floor Price | |||||||||||||||
2014 | 7,418 | $ | 80 | ||||||||||||||
Natural Gas Options | ' | ||||||||||||||||
Derivative [Line Items] | ' | ||||||||||||||||
Schedule of Derivative Instruments | ' | ||||||||||||||||
Natural gas put options | Volumes | Floor Price | |||||||||||||||
(MMBtu) | |||||||||||||||||
2014 | 99,034 | $ | 3.5 | ||||||||||||||
2015 | 798,853 | $ | 3.5 | ||||||||||||||
2016 | 930,468 | $ | 3.5 | ||||||||||||||
Natural Gas Liquid Options | ' | ||||||||||||||||
Derivative [Line Items] | ' | ||||||||||||||||
Schedule of Derivative Instruments | ' | ||||||||||||||||
NGL put options | Volumes (Bbls) | Average Floor | |||||||||||||||
Price | |||||||||||||||||
2014 | 5,535 | $ | 63.19 | ||||||||||||||
Oil Swaps | ' | ||||||||||||||||
Derivative [Line Items] | ' | ||||||||||||||||
Schedule of Derivative Instruments | ' | ||||||||||||||||
Oil fixed price swaps | Volumes (Bbls) | Weighted Average Fixed Price | |||||||||||||||
2014 | 6,900 | $ | 103.52 | ||||||||||||||
2015 | 39,411 | $ | 88.9 | ||||||||||||||
2016 | 36,658 | $ | 86 | ||||||||||||||
Natural Gas Swaps | ' | ||||||||||||||||
Derivative [Line Items] | ' | ||||||||||||||||
Schedule of Derivative Instruments | ' | ||||||||||||||||
Natural gas fixed price swaps | Volumes | Weighted Average Fixed Price | |||||||||||||||
(MMBtu) | |||||||||||||||||
2014 | 176,795 | $ | 4.09 | ||||||||||||||
2015 | 800,573 | $ | 4.25 | ||||||||||||||
2016 | 629,301 | $ | 4.37 | ||||||||||||||
Natural Gas Liquid Swaps | ' | ||||||||||||||||
Derivative [Line Items] | ' | ||||||||||||||||
Schedule of Derivative Instruments | ' | ||||||||||||||||
NGL fixed price swaps | Volumes | Weighted Average Fixed Price | |||||||||||||||
(Bbls) | |||||||||||||||||
2014 | 168,924 | $ | 39.44 | ||||||||||||||
2015 | 84,793 | $ | 75.18 | ||||||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | ' | ||||||||||||||||
The following table summarizes our derivative contracts on a gross basis, the effects of netting assets and liabilities for which the right of offset exists (in thousands): | |||||||||||||||||
30-Sep-14 | Gross Amounts of Recognized Assets and Liabilities | Gross Amounts Offset | Net Amounts Presented | ||||||||||||||
Assets: | |||||||||||||||||
Commodity derivatives - current assets | $ | 1,065 | $ | (404 | ) | $ | 661 | ||||||||||
Commodity derivatives - long-term assets | 565 | (6 | ) | 559 | |||||||||||||
Total | $ | 1,630 | $ | (410 | ) | $ | 1,220 | ||||||||||
Liabilities: | |||||||||||||||||
Commodity derivatives - current liabilities | $ | 1,012 | $ | (404 | ) | $ | 608 | ||||||||||
Commodity derivatives - long-term liabilities | 43 | (6 | ) | 37 | |||||||||||||
Total | $ | 1,055 | $ | (410 | ) | $ | 645 | ||||||||||
31-Dec-13 | Gross Amounts of Recognized Assets and Liabilities | Gross Amounts Offset | Net Amounts Presented | ||||||||||||||
Assets: | |||||||||||||||||
Commodity derivatives - current assets | $ | 1,342 | $ | (1,212 | ) | $ | 130 | ||||||||||
Commodity derivatives - long-term assets | 1,638 | (978 | ) | 660 | |||||||||||||
Total | $ | 2,980 | $ | (2,190 | ) | $ | 790 | ||||||||||
Liabilities: | |||||||||||||||||
Commodity derivatives - current liabilities | $ | 4,379 | $ | (1,212 | ) | $ | 3,167 | ||||||||||
Commodity derivatives - long-term liabilities | 1,015 | (978 | ) | 37 | |||||||||||||
Total | $ | 5,394 | $ | (2,190 | ) | $ | 3,204 | ||||||||||
The following table sets forth a reconciliation of our derivative contracts measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended September 30, 2013 and nine months ended September 30, 2014 and 2013 (in thousands): | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2013 | 2014 | 2013 | |||||||||||||||
Beginning balance | $ | 1,866 | $ | (2,517 | ) | $ | (112 | ) | |||||||||
Loss on derivative contracts | (3,277 | ) | (2,432 | ) | (1,522 | ) | |||||||||||
Transfers out (1) | — | 2,843 | — | ||||||||||||||
Cash paid upon settlement | 446 | 2,106 | 669 | ||||||||||||||
Ending balance | $ | (965 | ) | $ | — | $ | (965 | ) | |||||||||
Unrealized losses included in earnings relating to derivatives held at period end | $ | (2,677 | ) | $ | — | $ | (884 | ) | |||||||||
The following table sets forth by level within the fair value hierarchy the Partnership’s financial assets and liabilities that were measured at fair value on a recurring basis (in thousands): | |||||||||||||||||
30-Sep-14 | Fair Value Measurements | ||||||||||||||||
Description | Active Markets for Identical Assets (Level 1) | Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | Total Carrying Value | |||||||||||||
Oil and natural gas collars | $ | — | $ | 157 | $ | — | $ | 157 | |||||||||
Oil, natural gas and NGL put options | — | 539 | — | 539 | |||||||||||||
Oil, natural gas and NGL fixed price swaps | — | (121 | ) | — | (121 | ) | |||||||||||
Contingent consideration | — | — | (36,854 | ) | (36,854 | ) | |||||||||||
Total | $ | — | $ | 575 | $ | (36,854 | ) | $ | (36,279 | ) | |||||||
31-Dec-13 | Fair Value Measurements | ||||||||||||||||
Description | Active Markets for Identical Assets (Level 1) | Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | Total Carrying Value | |||||||||||||
Oil collars | $ | — | $ | (57 | ) | $ | — | $ | (57 | ) | |||||||
Natural gas collars | — | — | (9 | ) | (9 | ) | |||||||||||
Oil put options | — | 28 | — | 28 | |||||||||||||
Natural gas and NGL put options | — | — | 403 | 403 | |||||||||||||
Oil and natural gas fixed price swaps | — | 132 | — | 132 | |||||||||||||
NGL fixed price swaps | — | — | (2,911 | ) | (2,911 | ) | |||||||||||
Contingent consideration | — | — | (6,320 | ) | (6,320 | ) | |||||||||||
Total | $ | — | $ | 103 | $ | (8,837 | ) | $ | (8,734 | ) | |||||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||
Schedule of Goodwill | ' | |||||||
A reconciliation of the aggregate carry amount of goodwill for the period from December 31, 2013 to September 30, 2014 is as follows (in thousands): | ||||||||
Goodwill at December 31, 2013 | $ | 23,974 | ||||||
Additions: | ||||||||
MCCS Acquisition | 4,060 | |||||||
Services Acquisition | 11,664 | |||||||
Change due to purchase price allocation adjustments (1) | 3,836 | |||||||
Goodwill at September 30, 2014 | $ | 43,534 | ||||||
__________ | ||||||||
(1) Includes adjustments totaling $3.8 million during the three months ended September 30, 2014 as a result of purchase price allocation adjustments of $0.1 million and $3.7 million on the MCE Acquisition and Services Acquisition, respectively. See Note 2 "Acquisitions" for discussion of the purchase price allocation adjustments. | ||||||||
Schedule of Finite-Lived Intangible Assets | ' | |||||||
The Partnership's intangible assets at September 30, 2014 and December 31, 2013 consist of the following (in thousands): | ||||||||
30-Sep-14 | 31-Dec-13 | |||||||
Customer relationships - MCE Acquisition | $ | 36,772 | $ | 36,772 | ||||
Customer relationships - Services Acquisition | 64,200 | — | ||||||
Non-compete agreements - Services Acquisition | 4,500 | — | ||||||
Customer relationships - MCCS Acquisition | 1,700 | — | ||||||
Total intangible assets | 107,172 | 36,772 | ||||||
Less: accumulated amortization | 17,359 | 1,763 | ||||||
Intangible assets, net | $ | 89,813 | $ | 35,009 | ||||
Equity_Tables
Equity (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||
Schedule of Distributions Made to Units | ' | ||||||||||||||||
The Partnership has declared quarterly distributions per unit to unitholders of record, including holders of common, subordinated and general partner units during the three and nine months ended September 30, 2014 and 2013, as shown in the following table (in thousands): | |||||||||||||||||
Distributions | Common Units | Subordinated Units | General Partner Units | Total | |||||||||||||
2014 | |||||||||||||||||
First Quarter (1) | $ | 4,681 | $ | 1,268 | $ | 89 | $ | 6,038 | |||||||||
Second Quarter (2) | $ | 7,852 | $ | 1,279 | $ | 90 | $ | 9,221 | |||||||||
Third Quarter (3) | $ | 9,025 | $ | 1,290 | $ | 91 | $ | 10,406 | |||||||||
2013 | |||||||||||||||||
Second Quarter (4) | $ | 1,857 | $ | 604 | $ | 43 | $ | 2,504 | |||||||||
Third Quarter (1) | $ | 3,895 | $ | 1,268 | $ | 89 | $ | 5,252 | |||||||||
__________ | |||||||||||||||||
(1) Reflects quarterly distributions of $0.575 per unit paid in the third quarter of 2013 and the first quarter of 2014. | |||||||||||||||||
(2) Reflects quarterly distributions of $0.58 per unit paid in the second quarter of 2014. | |||||||||||||||||
(3) Reflects quarterly distributions of $0.585 per unit paid in the third quarter of 2014. | |||||||||||||||||
(4) Prorated to reflect 47 days of the quarterly cash distribution of $0.525 per unit paid in the second quarter of 2013. | |||||||||||||||||
The following distributions will be paid on November 14, 2014 to holders of record as of the close of business on November 3, 2014 (in thousands): | |||||||||||||||||
Common Units | Subordinated Units | General Partner Units | Total | ||||||||||||||
Distributions | $ | 9,454 | $ | 1,290 | $ | 91 | $ | 10,835 | |||||||||
Schedule of Target Distributions to Unitholders | ' | ||||||||||||||||
The following table illustrates the allocations of MCE's available cash from operating surplus between the Class A unitholders and the Class B unitholders based on the specified target distribution levels, as adjusted based on the MCCS Acquisition. | |||||||||||||||||
Marginal Percentage Interest in | |||||||||||||||||
Distributions | |||||||||||||||||
Total Quarterly Distributions per MCE Unit | MCE Class A Unitholders (the Partnership) | MCE Class B Unitholders | |||||||||||||||
Minimum Quarterly Distribution | $16,116 | 100% | —% | ||||||||||||||
First Target Distribution | $18,533 | to | $20,144 | 85% | 15% | ||||||||||||
Second Target Distribution | $20,145 | to | $24,173 | 75% | 25% | ||||||||||||
Third Target Distribution and Thereafter | $24,174 | and above | 50% | 50% |
Earnings_per_Unit_Tables
Earnings per Unit - (Tables) | 9 Months Ended | |||||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | ' | |||||||||||||||||||||||
Basic and diluted earnings per unit for the three and nine months ended September 30, 2014 and 2013 were computed as follows (in thousands, except per unit amounts): | ||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
September 30, 2014 | September 30, 2014 | |||||||||||||||||||||||
Common Units | Subordinated Units | General Partner | Common Units | Subordinated Units | General Partner | |||||||||||||||||||
Net loss | $ | (2,599 | ) | $ | (371 | ) | $ | (26 | ) | $ | (2,503 | ) | $ | (411 | ) | $ | (29 | ) | ||||||
Weighted average units outstanding | 15,429 | 2,205 | 155 | 12,646 | 2,205 | 155 | ||||||||||||||||||
Basic and diluted loss per unit | $ | (0.17 | ) | $ | (0.17 | ) | $ | (0.17 | ) | $ | (0.20 | ) | $ | (0.19 | ) | $ | (0.19 | ) | ||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
September 30, 2013 | September 30, 2013 | |||||||||||||||||||||||
Common Units | Subordinated Units | General Partner | Common Units | Subordinated Units | General Partner | |||||||||||||||||||
Net loss (1) | $ | (1,473 | ) | $ | (479 | ) | $ | (34 | ) | $ | (76 | ) | $ | (430 | ) | $ | (29 | ) | ||||||
Weighted average units outstanding | 6,774 | 2,205 | 155 | 6,480 | 2,205 | 155 | ||||||||||||||||||
Basic and diluted loss per unit | $ | (0.22 | ) | $ | (0.22 | ) | $ | (0.22 | ) | $ | (0.01 | ) | $ | (0.20 | ) | $ | (0.19 | ) | ||||||
__________ | ||||||||||||||||||||||||
-1 | Reflects net loss from February 13, 2013 through September 30, 2013 for the nine months ended September 30, 2013. |
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Related Party Transactions [Abstract] | ' | |||||||||||||||
Schedule of Related Party Transactions | ' | |||||||||||||||
Under agreements with New Dominion, the Partnership incurred charges and fees as follows for the three and nine months ended September 30, 2014 and 2013 (in thousands): | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Producing overhead and supervision charges | $ | 624 | $ | 464 | $ | 2,080 | $ | 1,277 | ||||||||
Drilling and completion supervision charges | 60 | 119 | 230 | 246 | ||||||||||||
Saltwater disposal fees | 260 | 329 | 1,075 | 502 | ||||||||||||
Total expenses incurred | $ | 944 | $ | 912 | $ | 3,385 | $ | 2,025 | ||||||||
Property_Plant_and_Equipment_T
Property, Plant and Equipment (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||
Property, Plant and Equipment | ' | |||||||
Property and equipment, primarily for our oilfield services segment, consisted of the following (in thousands): | ||||||||
30-Sep-14 | 31-Dec-13 | |||||||
Vehicles and transportation equipment | $ | 15,317 | $ | 561 | ||||
Machinery and equipment | 38,746 | 4,757 | ||||||
Office furniture and equipment | 472 | 79 | ||||||
Iron | 11,212 | 2,971 | ||||||
Total | 65,747 | 8,368 | ||||||
Less: accumulated depreciation | (2,466 | ) | (202 | ) | ||||
Property and equipment, net | $ | 63,281 | $ | 8,166 | ||||
Asset_Retirement_Obligations_T
Asset Retirement Obligations (Tables) | 9 Months Ended | |||
Sep. 30, 2014 | ||||
Asset Retirement Obligation Disclosure [Abstract] | ' | |||
Schedule of Change in Asset Retirement Obligation | ' | |||
A reconciliation of the aggregate carrying amounts of the asset retirement obligations for the period from December 31, 2013 to September 30, 2014 is as follows (in thousands): | ||||
Asset retirement obligation at December 31, 2013 | $ | 3,455 | ||
Liability incurred upon acquiring and drilling wells | 235 | |||
Liability settled or disposed | (32 | ) | ||
Accretion | 219 | |||
Asset retirement obligation at September 30, 2014 | $ | 3,877 | ||
Business_Segment_Information_T
Business Segment Information (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||
Schedule of Segment Reporting Information, by Segment | ' | ||||||||||||
Summarized financial information concerning the Partnership’s segments is shown in the following tables (in thousands): | |||||||||||||
Exploration and Production | Oilfield Services (1) | Total | |||||||||||
Three Months Ended September 30, 2014 | |||||||||||||
Revenues | $ | 15,561 | $ | 40,863 | $ | 56,424 | |||||||
Direct operating expenses | 5,562 | 24,315 | 29,877 | ||||||||||
Segment margin | $ | 9,999 | $ | 16,548 | $ | 26,547 | |||||||
General and administrative expenses | 7,354 | 6,431 | 13,785 | ||||||||||
Depreciation, depletion, amortization and accretion | 6,834 | 11,003 | 17,837 | ||||||||||
Loss from operations | $ | (4,189 | ) | $ | (886 | ) | $ | (5,075 | ) | ||||
Capital expenditures (2) | $ | 824 | $ | 3,735 | $ | 4,559 | |||||||
Three Months Ended September 30, 2013 | |||||||||||||
Revenues | $ | 12,431 | $ | — | $ | 12,431 | |||||||
Direct operating expenses | 3,985 | — | 3,985 | ||||||||||
Segment margin | $ | 8,446 | $ | — | $ | 8,446 | |||||||
General and administrative expenses | 1,353 | — | 1,353 | ||||||||||
Depreciation, depletion, amortization and accretion | 4,972 | — | 4,972 | ||||||||||
Income from operations | $ | 2,121 | $ | — | $ | 2,121 | |||||||
Capital expenditures (2) | $ | 14,745 | $ | — | $ | 14,745 | |||||||
__________ | |||||||||||||
-1 | The Partnership's oilfield services segment was established with the MCE Acquisition that occurred in November 2013. See Note 2 "Acquisitions" for discussion. | ||||||||||||
-2 | On an accrual basis and exclusive of acquisitions. | ||||||||||||
Exploration and Production | Oilfield Services (1) | Total | |||||||||||
Nine Months Ended September 30, 2014 | |||||||||||||
Revenues | $ | 51,130 | $ | 59,539 | $ | 110,669 | |||||||
Direct operating expenses | 16,252 | 34,849 | 51,101 | ||||||||||
Segment margin | $ | 34,878 | $ | 24,690 | $ | 59,568 | |||||||
General and administrative expenses | 13,220 | 9,615 | 22,835 | ||||||||||
Depreciation, depletion, amortization and accretion | 19,692 | 17,856 | 37,548 | ||||||||||
Income (loss) from operations | $ | 1,966 | $ | (2,781 | ) | $ | (815 | ) | |||||
Capital expenditures (2) | $ | 19,284 | $ | 6,726 | $ | 26,010 | |||||||
At September 30, 2014 | |||||||||||||
Total assets | $ | 194,541 | $ | 239,983 | $ | 434,524 | |||||||
Nine Months Ended September 30, 2013 | |||||||||||||
Revenues | $ | 32,440 | $ | — | $ | 32,440 | |||||||
Direct operating expenses | 10,698 | — | 10,698 | ||||||||||
Segment margin | $ | 21,742 | $ | — | $ | 21,742 | |||||||
General and administrative expenses (3) | 11,452 | — | 11,452 | ||||||||||
Depreciation, depletion, amortization and accretion | 11,831 | — | 11,831 | ||||||||||
Loss from operations | $ | (1,541 | ) | $ | — | $ | (1,541 | ) | |||||
Capital expenditures (2) | $ | 18,261 | $ | — | $ | 18,261 | |||||||
At December 31, 2013 | |||||||||||||
Total assets | $ | 181,440 | $ | 73,270 | $ | 254,710 | |||||||
__________ | |||||||||||||
-1 | The Partnership's oilfield services segment was established with the MCE Acquisition that occurred in November 2013. See Note 2 "Acquisitions" for discussion. | ||||||||||||
-2 | On an accrual basis and exclusive of acquisitions. | ||||||||||||
-3 | Includes $7.7 million of compensation expense related to common units granted to consultants, officers, directors and employees in conjunction with our initial public offering. |
Subsequent_Events_Tables
Subsequent Events (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Subsequent Events [Abstract] | ' | ||||||||||||||||
Schedule of Distributions Made to Units | ' | ||||||||||||||||
The Partnership has declared quarterly distributions per unit to unitholders of record, including holders of common, subordinated and general partner units during the three and nine months ended September 30, 2014 and 2013, as shown in the following table (in thousands): | |||||||||||||||||
Distributions | Common Units | Subordinated Units | General Partner Units | Total | |||||||||||||
2014 | |||||||||||||||||
First Quarter (1) | $ | 4,681 | $ | 1,268 | $ | 89 | $ | 6,038 | |||||||||
Second Quarter (2) | $ | 7,852 | $ | 1,279 | $ | 90 | $ | 9,221 | |||||||||
Third Quarter (3) | $ | 9,025 | $ | 1,290 | $ | 91 | $ | 10,406 | |||||||||
2013 | |||||||||||||||||
Second Quarter (4) | $ | 1,857 | $ | 604 | $ | 43 | $ | 2,504 | |||||||||
Third Quarter (1) | $ | 3,895 | $ | 1,268 | $ | 89 | $ | 5,252 | |||||||||
__________ | |||||||||||||||||
(1) Reflects quarterly distributions of $0.575 per unit paid in the third quarter of 2013 and the first quarter of 2014. | |||||||||||||||||
(2) Reflects quarterly distributions of $0.58 per unit paid in the second quarter of 2014. | |||||||||||||||||
(3) Reflects quarterly distributions of $0.585 per unit paid in the third quarter of 2014. | |||||||||||||||||
(4) Prorated to reflect 47 days of the quarterly cash distribution of $0.525 per unit paid in the second quarter of 2013. | |||||||||||||||||
The following distributions will be paid on November 14, 2014 to holders of record as of the close of business on November 3, 2014 (in thousands): | |||||||||||||||||
Common Units | Subordinated Units | General Partner Units | Total | ||||||||||||||
Distributions | $ | 9,454 | $ | 1,290 | $ | 91 | $ | 10,835 | |||||||||
Acquisitions_Details
Acquisitions (Details) (USD $) | 3 Months Ended | 9 Months Ended | 9 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 1 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||||||||||||||||||||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Nov. 12, 2013 | Nov. 30, 2013 | Mar. 31, 2013 | 31-May-13 | Jul. 31, 2013 | Jul. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Oct. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Oct. 04, 2013 | Nov. 30, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Nov. 12, 2013 | Nov. 30, 2013 | Sep. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2013 | Nov. 30, 2013 | Jan. 31, 2014 | Sep. 30, 2014 | Jun. 26, 2014 | Sep. 30, 2014 | Jun. 26, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 26, 2014 | Jun. 26, 2014 | Jun. 26, 2014 | Jun. 26, 2014 | Jun. 26, 2014 | Sep. 30, 2014 | Jun. 26, 2014 | Jun. 26, 2014 | Sep. 30, 2014 | Jun. 26, 2014 | Jun. 26, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | ||||||||||
Common Units | Chief Executive Officer | Chief Executive Officer | March Acquired Properties | May Acquired Properties | July Acquired Properties | Orion Acquisition | 2013 Material Acquisitions | 2013 Material Acquisitions | Southern Dome | Southern Dome | Southern Dome | Southern Dome | MidCentral Energy Services | MidCentral Energy Services | MidCentral Energy Services | MidCentral Energy Services | MidCentral Energy Services | MidCentral Energy Services | MidCentral Energy Services | MidCentral Energy Services | MidCentral Energy Services | CEU Paradigm | CEU Paradigm | MCCS | MCCS | MCCS | MCCS | MCCS | MCCS | EFS | EFS | RPS | EFS and RPS | EFS and RPS | EFS and RPS | EFS and RPS | EFS and RPS | EFS and RPS | EFS and RPS | 2014 Material Acquisitions | 2014 Material Acquisitions | 2014 Material Acquisitions | 2014 Material Acquisitions | ||||||||||||||||
MidCentral Energy Services | MidCentral Energy Services | producing_well | Customer Relationships | Maximum | Maximum | MCE Owners | Select MCE Employees | producing_well | Chief Executive Officer | Customer Relationships | Maximum | Maximum | EFS Employees | Phantom Units | Service Requirement Units | Customer Relationships | Customer Relationships | Noncompete Agreements | Acquisition-related Costs | Acquisition-related Costs | |||||||||||||||||||||||||||||||||||||||
Common Units | Phantom Units | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Units | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Total fair value of consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | $28,000,000 | $7,900,000 | $4,900,000 | $3,200,000 | ' | ' | $14,468,000 | ' | ' | ' | $68,170,000 | ' | ' | ' | ' | ' | ' | ' | ' | $17,124,000 | ' | $6,355,000 | ' | ' | ' | ' | ' | ' | ' | ' | $113,162,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Units issued in acquisition (in units) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,378,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,847,265 | 99,768 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Value of units issued in acquisition (in usd per unit) | ' | ' | ' | ' | ' | ' | ' | ' | ' | $20.30 | ' | ' | ' | ' | ' | $20.79 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $22.64 | $22.64 | $23.78 | ' | $23.45 | ' | ' | ' | ' | ' | ' | $23.45 | ' | $23.45 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Percentage of working interest acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Acquisition expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Issuance of common units in acquisitions (in units) | ' | ' | ' | ' | ' | ' | 1,964,957 | ' | ' | ' | ' | ' | ' | ' | ' | 414,045 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 488,667 | ' | 33,646 | ' | ' | ' | ' | ' | ' | 30,867 | ' | 1,411,777 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Equity interest percentage acquired in acquisition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | 100.00% | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Contingent consideration | 36,854,000 | ' | 36,854,000 | ' | 26,609,000 | 6,320,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | 1,600,000 | 6,320,000 | [1] | 15,400,000 | 6,300,000 | 6,320,000 | ' | 120,000,000 | 120,000,000 | ' | ' | 0 | [2] | 0 | 4,057,000 | [3] | 437,000 | ' | ' | 4,500,000 | 4,500,000 | ' | ' | ' | 21,984,000 | [4] | 21,053,000 | [4] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Class B units issued in MCE acquisition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13,988,000 | [5] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
Useful life of finite-lived intangible asset | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '7 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | '7 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | '7 years | ' | ' | ' | ' | ' | ' | |||||||||
Ownership percentage of acquired entity | ' | ' | ' | ' | ' | ' | ' | ' | 36.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Equity method carrying basis in acquisition | ' | ' | ' | ' | ' | ' | ' | 1,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Gain on acquisition of business | 0 | 0 | 2,298,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 22,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Number of wells Company in which company has acquired working interests | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 23 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Phantom units granted (in units) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 432,038 | 401,171 | ' | ' | ' | ' | ' | ' | ' | |||||||||
Purchase price adjustment related to goodwill | 3,800,000 | ' | 3,836,000 | [6] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
Intangible Asset | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 36,772,000 | [7] | ' | ' | ' | ' | ' | ' | 1,700,000 | [8] | ' | ' | ' | ' | ' | ' | ' | ' | 68,700,000 | [9] | ' | ' | ' | ' | 64,200,000 | [7] | 4,500,000 | [7] | ' | ' | ' | ' | ||||
Acquisition costs and transaction bonuses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $400,000 | $3,600,000 | $24,300,000 | $1,600,000 | |||||||||
[1] | The owners of MCE are entitled to receive additional common units in the second quarter of 2015 based on a specified multiple of the annualized EBITDA of MCES for the trailing nine month period ending March 31, 2015, less certain adjustments, subject to a $120.0 million cap ("MCE Contingent Consideration"). The MCE Contingent Consideration was valued at $6.3 million at the acquisition date through the use of a Monte Carlo simulation. See Note 3 "Contingent Consideration" for additional discussion of the MCE Contingent Consideration. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[2] | The Partnership agreed to provide additional consideration to CEU if average daily production attributable to the acquired working interests exceeds a specified average daily production during a specified period (the "CEU Contingent Consideration"). See Note 3 "Contingent Consideration" for additional discussion of the CEU Contingent Consideration. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[3] | The owners of MCCS are entitled to receive additional common units in the second quarter of 2015 based on a specified multiple of the annualized EBITDA of MCCS for the trailing nine month period ending March 31, 2015, less certain adjustments, subject to a $4.5 million cap ("MCCS Contingent Consideration"). The MCCS Contingent Consideration was valued at $4.1 million at the acquisition date through the use of a Monte Carlo simulation. See Note 3 "Contingent Consideration" for additional discussion of the MCCS Contingent Consideration. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[4] | The former owners of EFS and RPS are entitled to receive additional consideration in the second quarter of 2015 based on a specified multiple of the annualized EBITDA of EFS and RPS for the year ending December 31, 2014, less certain adjustments ("EFS/RPS Contingent Consideration"). The EFS/RPS Contingent Consideration was valued at $22.0 million at the acquisition date through the use of a probability analysis. See Note 3 "Contingent Consideration" for additional discussion of the EFS/RPS Contingent Consideration. During the three months ended September 30, 2014, a purchase price allocation adjustment was made for approximately $4.8 million to increase the value of the contingent consideration based on additional information made available. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[5] | Certain former owners of MCE retained Class B Units, which entitle the holders to receive incentive distributions of cash distributed by MCE above specified thresholds in increasing amounts. See Note 9 "Equity" for additional discussion of these incentive distributions. The Class B units were valued at $14.0 million at the acquisition date through the use of a Monte Carlo simulation. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[6] | Includes adjustments totaling $3.8 million during the three months ended September 30, 2014 as a result of purchase price allocation adjustments of $0.1 million and $3.7 million on the MCE Acquisition and Services Acquisition, respectively. See Note 2 "Acquisitions" for discussion of the purchase price allocation adjustments. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[7] | Customer relationships, an identifiable intangible asset, were valued based on the estimated free cash flows the customer relationships are expected to provide and are amortized using an accelerated method over seven years. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[8] | Customer relationships, an identifiable intangible asset, were valued based on the estimated free cash flows the customer relationships are expected to provide and are amortized using an accelerated method over seven years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[9] | Identifiable intangible assets include $64.2 million for customer relationships and $4.5 million for non-compete agreements. Customer relationships were valued based on the estimated free cash flows the customer relationships are expected to provide and are amortized using an accelerated method over seven years. Non-compete agreements were valued based on an income approach and are amortized over the agreement period. |
Acquisitions_Purchase_Price_Al
Acquisitions - Purchase Price Allocation for March Acquisitions (Details) (March Acquired Properties, USD $) | Mar. 31, 2013 |
In Thousands, unless otherwise specified | |
March Acquired Properties | ' |
Business Acquisition [Line Items] | ' |
Proved oil and natural gas properties | $29,049 |
Other assets | 754 |
Asset retirement obligations | -1,333 |
Other liabilities | -488 |
Total net assets | $27,982 |
Acquisitions_Purchase_Price_Al1
Acquisitions - Purchase Price Allocation for May Acquisitions (Details) (May Acquired Properties, USD $) | 31-May-13 |
In Thousands, unless otherwise specified | |
May Acquired Properties | ' |
Business Acquisition [Line Items] | ' |
Proved oil and natural gas properties | $8,165 |
Asset retirement obligations | -19 |
Other liabilities | -254 |
Total net assets | $7,892 |
Acquisitions_Purchase_Price_Al2
Acquisitions - Purchase Price Allocation for July Acquisitions (Details) (July Acquired Properties, USD $) | Jul. 31, 2013 |
In Thousands, unless otherwise specified | |
July Acquired Properties | ' |
Business Acquisition [Line Items] | ' |
Proved oil and natural gas properties | $4,888 |
Asset retirement obligations | -4 |
Other liabilities | -18 |
Total net assets | $4,866 |
Acquisitions_Purchase_Price_Al3
Acquisitions - Purchase Price Allocation for Orion Acquisition (Details) (Orion Acquisition, USD $) | Jul. 31, 2013 |
In Thousands, unless otherwise specified | |
Orion Acquisition | ' |
Business Acquisition [Line Items] | ' |
Proved oil and natural gas properties | $3,274 |
Asset retirement obligations | -24 |
Other liabilities | -20 |
Total net assets | $3,230 |
Acquisitions_Amounts_of_Revenu
Acquisitions - Amounts of Revenues and Revenues in Excess of Direct Operating Expenses Included in Statement of Operations (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Business Acquisition [Line Items] | ' | ' | ' | ' |
Revenue | $56,424 | $12,431 | $110,669 | $32,440 |
Excess of revenues over direct operating expenses | 26,547 | 8,446 | 59,568 | 21,742 |
Income (loss) from operations | -5,075 | 2,121 | -815 | -1,541 |
2013 Material Acquisitions | ' | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' | ' |
Revenue | ' | 4,197 | ' | 6,974 |
Excess of revenues over direct operating expenses | ' | 2,180 | ' | 3,350 |
2014 Material Acquisitions | ' | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' | ' |
Revenue | 30,110 | ' | 35,047 | ' |
Income (loss) from operations | $590 | ' | $2,786 | ' |
Acquisitions_Purchase_Price_Al4
Acquisitions - Purchase Price Allocation for Southern Dome Acquisition (Details) (Southern Dome, USD $) | 1 Months Ended | |
In Thousands, unless otherwise specified | Oct. 31, 2013 | |
Southern Dome | ' | |
Consideration: | ' | |
Cash | $4,260 | |
Fair value of common units granted | 8,608 | [1] |
Contingent consideration | 1,600 | [2] |
Total fair value of consideration | 14,468 | |
Fair value of assets acquired and liabilities assumed: | ' | |
Proved oil and natural gas properties | 15,190 | |
Asset retirement obligations | -170 | |
Other liabilities | -552 | |
Total net assets | $14,468 | |
[1] | The fair value of the unit consideration was based upon 414,045 common units valued at $20.79 per unit (closing price on the date of the acquisition). | |
[2] | The Partnership agreed to provide additional consideration to Scintilla if average daily production attributable to the acquired working interests exceeds a specified average daily production during the specified period (the "Southern Dome Contingent Consideration"). See Note 3 "Contingent Consideration" for additional discussion of the Southern Dome Contingent Consideratio |
Acquisitions_Purchase_Price_Al5
Acquisitions - Purchase Price Allocation for MCE Acquisition (Details) (USD $) | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Nov. 30, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Nov. 12, 2013 | Nov. 30, 2013 | Nov. 30, 2013 | |||
MidCentral Energy Services | MidCentral Energy Services | MidCentral Energy Services | MidCentral Energy Services | MCE Owners | Select MCE Employees | |||||||
MidCentral Energy Services | MidCentral Energy Services | |||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Cash | ' | ' | ' | $3,781,000 | ' | ' | ' | ' | ' | |||
Fair value of units granted | ' | ' | ' | ' | ' | ' | ' | 41,822,000 | [1] | 2,259,000 | [2] | |
Contingent consideration | 36,854,000 | 26,609,000 | 6,320,000 | 6,320,000 | [3] | 15,400,000 | 6,300,000 | 6,320,000 | ' | ' | ||
Class B units issued in MCE acquisition | ' | ' | ' | 13,988,000 | [4] | ' | ' | ' | ' | ' | ||
Total fair value of consideration | ' | ' | ' | $68,170,000 | ' | ' | ' | ' | ' | |||
[1] | The fair value of the unit consideration was based upon 1,847,265 common units valued at $22.64 per unit (closing price on the date of the acquisition). | |||||||||||
[2] | The fair value of the unit consideration was based upon 99,768 common units valued at $22.64 per unit (closing price on the date of the acquisition). These common units were issued to certain employees of MCE under the Partnershipbs long-term incentive plan, primarily for service prior to the acquisition. Any forfeited common units do not revert to the Partnership, but would be distributed to the former owners of MCE. | |||||||||||
[3] | The owners of MCE are entitled to receive additional common units in the second quarter of 2015 based on a specified multiple of the annualized EBITDA of MCES for the trailing nine month period ending March 31, 2015, less certain adjustments, subject to a $120.0 million cap ("MCE Contingent Consideration"). The MCE Contingent Consideration was valued at $6.3 million at the acquisition date through the use of a Monte Carlo simulation. See Note 3 "Contingent Consideration" for additional discussion of the MCE Contingent Consideration. | |||||||||||
[4] | Certain former owners of MCE retained Class B Units, which entitle the holders to receive incentive distributions of cash distributed by MCE above specified thresholds in increasing amounts. See Note 9 "Equity" for additional discussion of these incentive distributions. The Class B units were valued at $14.0 million at the acquisition date through the use of a Monte Carlo simulation. |
Acquisitions_Summary_of_Assets
Acquisitions - Summary of Assets Acquired and Liabilities Assumed in MCE Acquisition (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Nov. 30, 2013 | Nov. 30, 2013 | ||
In Thousands, unless otherwise specified | MidCentral Energy Services | Customer Relationships | ||||
MidCentral Energy Services | ||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ||
Cash | ' | ' | $1,522 | ' | ||
Accounts receivable | ' | ' | 3,365 | ' | ||
Other current assets | ' | ' | 954 | ' | ||
Property and equipment | ' | ' | 7,923 | ' | ||
Intangible Asset | ' | ' | ' | 36,772 | [1] | |
Goodwill | 43,534 | 23,974 | 24,077 | [2] | ' | |
Other assets | ' | ' | 19 | ' | ||
Total assets acquired | ' | ' | 74,632 | ' | ||
Accounts payable and accrued liabilities | ' | ' | -2,448 | [3] | ' | |
Factoring payable | ' | ' | -1,679 | ' | ||
Long-term debt | ' | ' | -2,335 | ' | ||
Total liabilities assumed | ' | ' | -6,462 | ' | ||
Total net assets | ' | ' | $68,170 | ' | ||
[1] | Customer relationships, an identifiable intangible asset, were valued based on the estimated free cash flows the customer relationships are expected to provide and are amortized using an accelerated method over seven years. | |||||
[2] | Goodwill is calculated as the excess of the consideration transferred over the fair value of net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Such goodwill is not deductible for tax purposes. Specifically, the goodwill recorded as part of the acquisition of MCE includes any intangible assets that do not qualify for separate recognition, such as the MCE trained, skilled and assembled workforce, along with the expected synergies from leveraging the customer relationships and integrating new product offerings into MCE's business. Goodwill has been allocated to the oilfield services segment. | |||||
[3] | Includes purchase price allocation adjustment of $0.1 million made during the three months ended September 30, 2014 based on additional information received on accounts payable assumed. |
Acquisitions_Purchase_Price_Al6
Acquisitions - Purchase Price Allocation of CEU Acquisition (Details) (USD $) | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jan. 31, 2014 | Sep. 30, 2014 | |
CEU Paradigm | CEU Paradigm | |||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | |
Cash | ' | ' | ' | $5,503,000 | ' | |
Fair value of common units granted | ' | ' | ' | 11,621,000 | [1] | ' |
Contingent consideration | 36,854,000 | 26,609,000 | 6,320,000 | 0 | [2] | 0 |
Total fair value of consideration | ' | ' | ' | 17,124,000 | ' | |
Property and equipment | ' | ' | ' | 17,306,000 | ' | |
Asset retirement obligations | ' | ' | ' | -182,000 | ' | |
Total net assets | ' | ' | ' | $17,124,000 | ' | |
[1] | The fair value of the unit consideration was based upon 488,667 common units valued at $23.78 per unit (closing price on the date of the acquisition). | |||||
[2] | The Partnership agreed to provide additional consideration to CEU if average daily production attributable to the acquired working interests exceeds a specified average daily production during a specified period (the "CEU Contingent Consideration"). See Note 3 "Contingent Consideration" for additional discussion of the CEU Contingent Consideration. |
Acquisitions_Purchase_Price_Al7
Acquisitions - Purchase Price Allocation for MCCS Acquisition (Details) (USD $) | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 26, 2014 | Sep. 30, 2014 | |
MCCS | MCCS | |||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | |
Fair value of common units granted | ' | ' | ' | $789,000 | [1] | ' |
Contingent consideration | 36,854,000 | 26,609,000 | 6,320,000 | 4,057,000 | [2] | 437,000 |
Noncontrolling interest | 15,497,000 | ' | 13,988,000 | 1,509,000 | [3] | ' |
Total fair value of consideration | ' | ' | ' | $6,355,000 | ' | |
[1] | The fair value of the unit consideration was based upon 33,646 common units valued at $23.45 per unit (closing price on the date of the acquisition). | |||||
[2] | The owners of MCCS are entitled to receive additional common units in the second quarter of 2015 based on a specified multiple of the annualized EBITDA of MCCS for the trailing nine month period ending March 31, 2015, less certain adjustments, subject to a $4.5 million cap ("MCCS Contingent Consideration"). The MCCS Contingent Consideration was valued at $4.1 million at the acquisition date through the use of a Monte Carlo simulation. See Note 3 "Contingent Consideration" for additional discussion of the MCCS Contingent Consideration. | |||||
[3] | As a condition of the acquisition agreement, MCCS was contributed to MCE by the Partnership, which increased the value of the noncontrolling interest held by MCE's Class B unitholders. The increase in the value of the noncontrolling interest that resulted from this is part of the total consideration paid for the MCCS Acquisition and was valued at the acquisition date through the use of a Monte Carlo simulation. |
Acquisitions_Summary_of_Assets1
Acquisitions - Summary of Assets Acquired and Liabilities Assumed in MCCS Acquisition (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Jun. 26, 2014 | |
In Thousands, unless otherwise specified | MCCS | |||
Business Acquisition [Line Items] | ' | ' | ' | |
Cash | ' | ' | $109 | |
Accounts receivable | ' | ' | 524 | |
Inventory | ' | ' | 2,035 | |
Other current assets | ' | ' | 14 | |
Property and equipment | ' | ' | 107 | |
Intangible Asset | ' | ' | 1,700 | [1] |
Goodwill | 43,534 | 23,974 | 4,060 | [2] |
Other assets | ' | ' | 28 | |
Total assets acquired | ' | ' | 8,577 | |
Accounts payable and accrued liabilities | ' | ' | -1,431 | |
Long-term debt | ' | ' | -791 | |
Total liabilities assumed | ' | ' | -2,222 | |
Total net assets | ' | ' | $6,355 | |
[1] | Customer relationships, an identifiable intangible asset, were valued based on the estimated free cash flows the customer relationships are expected to provide and are amortized using an accelerated method over seven years | |||
[2] | Goodwill is calculated as the excess of the consideration transferred over the fair value of net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Such goodwill is not deductible for tax purposes. Specifically, the goodwill recorded as part of the acquisition of MCCS includes any intangible assets that do not qualify for separate recognition, such as the MCCS trained, skilled and assembled workforce, along with the expected synergies from leveraging the customer relationships and integrating new product offerings into MCCS's business. Goodwill has been allocated to the oilfield services segment. |
Acquisitions_Purchase_Price_Al8
Acquisitions - Purchase Price Allocation of EFS and RPS Acquisition (Details) (USD $) | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 26, 2014 | Sep. 30, 2014 | Jun. 26, 2014 | |||
EFS and RPS | EFS and RPS | EFS and RPS Employees | |||||||
EFS and RPS | |||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | |||
Cash | ' | ' | ' | $57,348,000 | ' | ' | |||
Fair value of common units granted | ' | ' | ' | 33,106,000 | [1] | ' | ' | ||
Common units granted for the benefit of EFS and RPS employees | ' | ' | ' | ' | ' | 724,000 | [2] | ||
Contingent consideration | 36,854,000 | 26,609,000 | 6,320,000 | 21,984,000 | [3] | 21,053,000 | [3] | ' | |
Total fair value of consideration | ' | ' | ' | 113,162,000 | ' | ' | |||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Consideration Transferred | ' | ' | ' | ' | ($4,800,000) | ' | |||
[1] | The fair value of the unit consideration was based upon 1,411,777 common units valued at $23.45 per unit (closing price on the date of the acquisition). | ||||||||
[2] | The fair value of the unit consideration was based upon 30,867 common units valued at $23.45 per unit (closing price on the date of the transaction). These units were issued to satisfy the settlement of phantom units granted to EFS employees with no service requirement. An additional 401,171 common units were issued and are held in escrow to satisfy the future settlement of phantom units granted to EFS and RPS employees in conjunction with the Services Acquisition are excluded from consideration based on the future service requirement for vesting. See Note 9 "Equity" for additional discussion of phantom units. | ||||||||
[3] | The former owners of EFS and RPS are entitled to receive additional consideration in the second quarter of 2015 based on a specified multiple of the annualized EBITDA of EFS and RPS for the year ending December 31, 2014, less certain adjustments ("EFS/RPS Contingent Consideration"). The EFS/RPS Contingent Consideration was valued at $22.0 million at the acquisition date through the use of a probability analysis. See Note 3 "Contingent Consideration" for additional discussion of the EFS/RPS Contingent Consideration. During the three months ended September 30, 2014, a purchase price allocation adjustment was made for approximately $4.8 million to increase the value of the contingent consideration based on additional information made available. |
Acquisitions_Summary_of_Assets2
Acquisitions - Summary of Assets Acquired and Liabilities Assumed in EFS and RPS Acquisition (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Jun. 26, 2014 | Jun. 26, 2014 | Jun. 26, 2014 | |||
In Thousands, unless otherwise specified | EFS and RPS | Customer Relationships | Noncompete Agreements | |||||
EFS and RPS | EFS and RPS | |||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | |||
Cash | ' | ' | $1,668 | ' | ' | |||
Accounts receivable | ' | ' | 21,611 | ' | ' | |||
Other current assets | ' | ' | 620 | [1] | ' | ' | ||
Property and equipment | ' | ' | 43,853 | [1] | ' | ' | ||
Other asset | ' | ' | 68,700 | [2] | 64,200 | [3] | 4,500 | [3] |
Goodwill | 43,534 | 23,974 | 15,397 | [1],[4] | ' | ' | ||
Total assets acquired | ' | ' | 151,849 | ' | ' | |||
Accounts payable and accrued liabilities | ' | ' | -6,047 | [1] | ' | ' | ||
Factoring payable | ' | ' | -15,840 | ' | ' | |||
Long-term debt | ' | ' | -16,800 | ' | ' | |||
Total liabilities assumed | ' | ' | -38,687 | ' | ' | |||
Total net assets | ' | ' | $113,162 | ' | ' | |||
[1] | Includes purchase price allocation adjustments, resulting in an increase totaling $3.7 million to goodwill, during the three months ended September 30, 2014, based on additional information received primarily on other current assets and property and equipment acquired. | |||||||
[2] | Identifiable intangible assets include $64.2 million for customer relationships and $4.5 million for non-compete agreements. Customer relationships were valued based on the estimated free cash flows the customer relationships are expected to provide and are amortized using an accelerated method over seven years. Non-compete agreements were valued based on an income approach and are amortized over the agreement period. | |||||||
[3] | Customer relationships, an identifiable intangible asset, were valued based on the estimated free cash flows the customer relationships are expected to provide and are amortized using an accelerated method over seven years. | |||||||
[4] | Goodwill is calculated as the excess of the consideration transferred over the fair value of net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Such goodwill is not deductible for tax purposes. Specifically, the goodwill recorded as part of the Services Acquisition includes any intangible assets that do not qualify for separate recognition, such as the EFS and RPS trained, skilled and assembled workforce, along with the expected synergies from leveraging the customer relationships. Goodwill has been allocated to the oilfield services segment. During the three months ended, a purchase price allocation adjustment was made to increase the amount assigned to goodwill by approximately $3.7 million, primarily as a result of an increase to the value of the contingent consideration based on additional information made available. |
Acquisitions_Pro_Forma_Results
Acquisitions - Pro Forma Results of Operations (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
2013 and 2014 Material Acquisitions [Member] | 2013 and 2014 Material Acquisitions [Member] | 2014 Material Acquisitions | 2014 Material Acquisitions | Acquisition-related Costs | Acquisition-related Costs | ||||
2014 Material Acquisitions | 2014 Material Acquisitions | ||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | |||
Revenue | $65,673,000 | $136,851,000 | ' | $172,590,000 | ' | ' | |||
Net income | -3,971,000 | [1] | -10,647,000 | [1] | ' | 5,084,000 | [2] | ' | ' |
Net income per common unit (1): | ' | ' | ' | ' | ' | ' | |||
Basic (in usd per unit) | ($0.24) | [1] | ($0.83) | [1] | ' | $0.31 | [2] | ' | ' |
Diluted (in usd per unit) | ($0.24) | [1] | ($0.83) | [1] | ' | $0.31 | [2] | ' | ' |
Acquisition costs and transaction bonuses | ' | ' | ($400,000) | ($3,600,000) | ($24,300,000) | ($1,600,000) | |||
[1] | Includes $1.6 million of the Partnership's acquisition costs related to the 2014 Material Acquisitions in the nine months ended September 30, 2013. | ||||||||
[2] | Excludes $24.3 million of acquisition costs and transaction bonuses paid to EFS and RPS employees that were included in the historical results of the Partnership, EFS or RPS. |
Contingent_Consideration_Recon
Contingent Consideration - Reconciliation of Acquisition Related Accrued Earnouts (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||
Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Jan. 31, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 26, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 26, 2014 | ||||||
CEU Paradigm | CEU Paradigm | CEU Paradigm | MCCS | MCCS | MCCS | EFS and RPS | EFS and RPS | EFS and RPS | |||||||||
Business Acquisition, Contingent Consideration [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Contingent consideration, beginning balance | $26,609,000 | $6,320,000 | ' | ' | ' | $0 | [1] | ' | ' | $4,057,000 | [2] | ' | ' | $21,984,000 | [3] | ||
Acquisition date fair value of contingent consideration | ' | 4,493,000 | 0 | 0 | 0 | ' | 0 | 4,057,000 | ' | 4,841,000 | 21,984,000 | ' | |||||
Change in fair value of contingent consideration | 5,404,000 | 4,493,000 | ' | ' | ' | ' | -3,700,000 | ' | ' | -900,000 | ' | ' | |||||
Settlement of contingent consideration | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Contingent consideration, ending balance | $36,854,000 | $36,854,000 | ' | $0 | $0 | $0 | [1] | $437,000 | $437,000 | $4,057,000 | [2] | $21,053,000 | [3] | $21,053,000 | [3] | $21,984,000 | [3] |
[1] | The Partnership agreed to provide additional consideration to CEU if average daily production attributable to the acquired working interests exceeds a specified average daily production during a specified period (the "CEU Contingent Consideration"). See Note 3 "Contingent Consideration" for additional discussion of the CEU Contingent Consideration. | ||||||||||||||||
[2] | The owners of MCCS are entitled to receive additional common units in the second quarter of 2015 based on a specified multiple of the annualized EBITDA of MCCS for the trailing nine month period ending March 31, 2015, less certain adjustments, subject to a $4.5 million cap ("MCCS Contingent Consideration"). The MCCS Contingent Consideration was valued at $4.1 million at the acquisition date through the use of a Monte Carlo simulation. See Note 3 "Contingent Consideration" for additional discussion of the MCCS Contingent Consideration. | ||||||||||||||||
[3] | The former owners of EFS and RPS are entitled to receive additional consideration in the second quarter of 2015 based on a specified multiple of the annualized EBITDA of EFS and RPS for the year ending December 31, 2014, less certain adjustments ("EFS/RPS Contingent Consideration"). The EFS/RPS Contingent Consideration was valued at $22.0 million at the acquisition date through the use of a probability analysis. See Note 3 "Contingent Consideration" for additional discussion of the EFS/RPS Contingent Consideration. During the three months ended September 30, 2014, a purchase price allocation adjustment was made for approximately $4.8 million to increase the value of the contingent consideration based on additional information made available. |
Contingent_Consideration_Detai
Contingent Consideration (Details) (USD $) | 3 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||||||||||
Sep. 30, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Nov. 30, 2013 | Nov. 12, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Oct. 04, 2013 | Sep. 30, 2014 | Jan. 31, 2014 | Sep. 30, 2014 | Jun. 26, 2014 | Sep. 30, 2014 | Jun. 26, 2014 | Sep. 30, 2014 | Nov. 30, 2013 | Sep. 30, 2014 | Jun. 26, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | ||||||
MidCentral Energy Services | MidCentral Energy Services | MidCentral Energy Services | MidCentral Energy Services | Southern Dome | Southern Dome | Southern Dome | CEU Paradigm | CEU Paradigm | MCCS | MCCS | EFS and RPS | EFS and RPS | Maximum | Maximum | Maximum | Maximum | General and Administrative Expenses | General and Administrative Expenses | General and Administrative Expenses | General and Administrative Expenses | ||||||||||
Boe | Boe | MidCentral Energy Services | MidCentral Energy Services | MCCS | MCCS | MidCentral Energy Services | MidCentral Energy Services | MCCS | EFS and RPS | |||||||||||||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Average daily production needed to provide additional consideration for acquisition (in Boe per day) | ' | ' | ' | ' | ' | ' | ' | ' | 383.5 | ' | ' | 566 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Contingent consideration | $36,854,000 | $36,854,000 | $26,609,000 | $6,320,000 | $15,400,000 | $6,300,000 | $6,320,000 | [1] | $6,320,000 | $0 | $0 | $1,600,000 | $0 | $0 | [2] | $437,000 | $4,057,000 | [3] | $21,053,000 | [4] | $21,984,000 | [4] | $120,000,000 | $120,000,000 | $4,500,000 | $4,500,000 | ' | ' | ' | ' |
Change in fair value of contingent consideration | ($5,404,000) | ($4,493,000) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $3,700,000 | ' | $900,000 | ' | ' | ' | ' | ' | $10,000,000 | $9,100,000 | $3,700,000 | $900,000 | |||||
Percentage of contingent consideration to be paid in cash | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | [4] | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Percentage of contingent consideration to be paid in common units | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | [4] | ' | ' | ' | ' | ' | ' | ' | ' | ||||
[1] | The owners of MCE are entitled to receive additional common units in the second quarter of 2015 based on a specified multiple of the annualized EBITDA of MCES for the trailing nine month period ending March 31, 2015, less certain adjustments, subject to a $120.0 million cap ("MCE Contingent Consideration"). The MCE Contingent Consideration was valued at $6.3 million at the acquisition date through the use of a Monte Carlo simulation. See Note 3 "Contingent Consideration" for additional discussion of the MCE Contingent Consideration. | |||||||||||||||||||||||||||||
[2] | The Partnership agreed to provide additional consideration to CEU if average daily production attributable to the acquired working interests exceeds a specified average daily production during a specified period (the "CEU Contingent Consideration"). See Note 3 "Contingent Consideration" for additional discussion of the CEU Contingent Consideration. | |||||||||||||||||||||||||||||
[3] | The owners of MCCS are entitled to receive additional common units in the second quarter of 2015 based on a specified multiple of the annualized EBITDA of MCCS for the trailing nine month period ending March 31, 2015, less certain adjustments, subject to a $4.5 million cap ("MCCS Contingent Consideration"). The MCCS Contingent Consideration was valued at $4.1 million at the acquisition date through the use of a Monte Carlo simulation. See Note 3 "Contingent Consideration" for additional discussion of the MCCS Contingent Consideration. | |||||||||||||||||||||||||||||
[4] | The former owners of EFS and RPS are entitled to receive additional consideration in the second quarter of 2015 based on a specified multiple of the annualized EBITDA of EFS and RPS for the year ending December 31, 2014, less certain adjustments ("EFS/RPS Contingent Consideration"). The EFS/RPS Contingent Consideration was valued at $22.0 million at the acquisition date through the use of a probability analysis. See Note 3 "Contingent Consideration" for additional discussion of the EFS/RPS Contingent Consideration. During the three months ended September 30, 2014, a purchase price allocation adjustment was made for approximately $4.8 million to increase the value of the contingent consideration based on additional information made available. |
Debt_Schedule_of_Debt_Details
Debt - Schedule of Debt (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Line of Credit Facility [Line Items] | ' | ' |
Outstanding Credit | $92,250 | $78,500 |
Notes payable | 21,889 | 2,233 |
Total debt | 117,433 | 80,733 |
Less: current maturities of long-term debt | 21,132 | 719 |
Long-term debt | 96,301 | 80,014 |
Revolving Credit Facility | ' | ' |
Line of Credit Facility [Line Items] | ' | ' |
Outstanding Credit | $3,294 | $0 |
Debt_Details
Debt (Details) (USD $) | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | |||||||||||||||||||||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Oct. 31, 2014 | Sep. 30, 2014 | Aug. 31, 2014 | Sep. 30, 2014 | Feb. 28, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |
Notes Payable to Banks | Term Loans | Minimum | Minimum | Minimum | Maximum | Maximum | Federal Funds Rate | Base Rate | Base Rate | Base Rate | Base Rate | London Interbank Offered Rate (LIBOR) | London Interbank Offered Rate (LIBOR) | London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | MidCentral Energy Services | MidCentral Energy Services | MidCentral Energy Services | EFS and RPS | EFS and RPS | ||||
Notes Payable to Banks | Term Loans | Notes Payable to Banks | Term Loans | Minimum | Minimum | Maximum | Minimum | Maximum | Subsequent Event | Bank of Oklahoma Corporation National Prime Rate | Notes Payable to Banks | Revolving Credit Facility | Revolving Credit Facility | Minimum | Maximum | ||||||||||||
Term Loans | Term Loans | Term Loans | |||||||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Required ratio of EBITDA to interest expense | ' | ' | ' | ' | ' | 2.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Required ratio of total debt to EBITDA | ' | ' | ' | ' | ' | ' | ' | ' | 3.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Required current ratio | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum borrowing base utilization permitted under credit facility | 90.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basis spread on debt instruments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.50% | -2.30% | 1.50% | ' | 2.25% | 1.00% | 2.50% | 3.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitment fee percentage | 0.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rates on debt instruments | 3.25% | ' | 3.25% | ' | ' | ' | ' | ' | ' | ' | ' | 5.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.00% | ' | ' | ' | ' | ' |
Line of credit current borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $102,500,000 | ' | ' | ' | ' | ' | $4,000,000 | ' | ' |
Line of credit remaining borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,250,000 | ' | 9,250,000 | ' | ' | 700,000 | ' | ' | ' |
Available borrowing capacity before distribution restrictions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' |
Repayments on borrowings | 8,401,000 | 95,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,250,000 | ' | ' | ' | ' | ' | ' |
Long-term Debt | ' | ' | ' | 7,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,500,000 | ' | ' | ' | ' |
Durations of debt instruments | ' | ' | ' | ' | ' | ' | '12 months | ' | ' | '60 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stated rates on debt instruments | ' | ' | ' | ' | ' | ' | 5.28% | ' | ' | 10.51% | ' | ' | ' | 5.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term loans balance | ' | ' | ' | ' | 14,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum balance required to be maintained on reserve bank account | ' | ' | ' | ' | ' | ' | ' | 300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of excess cash flow to be maintained as balance of reserve account if greater than $0.3 million | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Required fixed-charge ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.25 | ' |
Required leverage ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.5 |
Required working capital and cash balance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,000,000 | ' |
Line of credit maximum borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,000,000 | ' | ' |
Outstanding balance of line of credit | $92,250,000 | ' | $78,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $3,294,000 | $0 | ' | ' | ' | ' | $3,300,000 | ' | ' |
Required debt service coverage ratio | 1.25 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Factoring_Payable_Details
Factoring Payable (Details) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Factoring Payable [Line Items] | ' | ' |
Factoring payable | $15,526 | $1,907 |
Percentage of funding from factoring payable received upfront | 90.00% | ' |
Percentage of balance of payables factored that is reserved | 10.00% | ' |
Days till outstanding factored payable are repurchased | '90 days | ' |
London Interbank Offered Rate (LIBOR) | ' | ' |
Factoring Payable [Line Items] | ' | ' |
Interest margin on factoring payables | 3.00% | ' |
Derivative_Contracts_Commodity
Derivative Contracts - Commodity Derivative Positions Oil Collars (Details) (Oil Collar) | 9 Months Ended |
Sep. 30, 2014 | |
bbl | |
2014 | ' |
Derivative [Line Items] | ' |
Volumes (Bbls) | 23,763 |
Floor Price (in usd per Bbl) | 80 |
Ceiling Price (in usd per Bbl) | 103.5 |
2015 | ' |
Derivative [Line Items] | ' |
Volumes (Bbls) | 42,649 |
Floor Price (in usd per Bbl) | 80 |
Ceiling Price (in usd per Bbl) | 93.25 |
Derivative_Contracts_Commodity1
Derivative Contracts - Commodity Derivative Positions of Oil Collars - Three Way (Details) (Oil Collars - Three Way, 2015) | 9 Months Ended |
Sep. 30, 2014 | |
bbl | |
Oil Collars - Three Way | 2015 | ' |
Derivative [Line Items] | ' |
Volumes (Bbls) | 36,500 |
Sold Put (in usd per Bbl) | 77.5 |
Purchased Put (in usd per Bbl) | 92.5 |
Ceiling Price (in usd per Bbl) | 102.6 |
Derivative_Contracts_Commodity2
Derivative Contracts - Commodity Derivative Positions Natural Gas Collars (Details) (Natural Gas Collars) | 9 Months Ended |
Sep. 30, 2014 | |
MMBTU | |
2014 | ' |
Derivative [Line Items] | ' |
Volumes (MMBtu) | 260,751 |
Floor Price (in usd per MMBtu) | 4 |
Ceiling Price (in usd per MMBtu) | 4.41 |
2015 | ' |
Derivative [Line Items] | ' |
Volumes (MMBtu) | 1,362,382 |
Floor Price (in usd per MMBtu) | 4 |
Ceiling Price (in usd per MMBtu) | 4.32 |
Derivative_Contracts_Commodity3
Derivative Contracts - Commodity Derivative Positions Oil Options (Details) (Oil Options, 2014) | 9 Months Ended |
Sep. 30, 2014 | |
bbl | |
Oil Options | 2014 | ' |
Derivative [Line Items] | ' |
Volumes (Bbls) | 7,418 |
Floor Price (in usd per Bbl) | 80 |
Derivative_Contracts_Commodity4
Derivative Contracts - Commodity Derivative Positions Natural Gas Options (Details) (Natural Gas Options) | 9 Months Ended |
Sep. 30, 2014 | |
MMBTU | |
2014 | ' |
Derivative [Line Items] | ' |
Volumes (MMBtu) | 99,034 |
Floor Price (in usd per MMBtu) | 3.5 |
2015 | ' |
Derivative [Line Items] | ' |
Volumes (MMBtu) | 798,853 |
Floor Price (in usd per MMBtu) | 3.5 |
2016 | ' |
Derivative [Line Items] | ' |
Volumes (MMBtu) | 930,468 |
Floor Price (in usd per MMBtu) | 3.5 |
Derivative_Contracts_Commodity5
Derivative Contracts - Commodity Derivative Positions Natural Gas Liquid Options (Details) (Natural Gas Liquid Options, 2014) | 9 Months Ended |
Sep. 30, 2014 | |
bbl | |
Natural Gas Liquid Options | 2014 | ' |
Derivative [Line Items] | ' |
Volumes (Bbls) | 5,535 |
Average Floor Price (in usd per Bbl) | 63.19 |
Derivative_Contracts_Commodity6
Derivative Contracts - Commodity Derivative Positions Oil Swaps (Details) (Oil Swaps) | 9 Months Ended |
Sep. 30, 2014 | |
bbl | |
2014 | ' |
Derivative [Line Items] | ' |
Volumes (Bbls) | 6,900 |
Derivative, Swap Type, Average Fixed Price | 103.52 |
2015 | ' |
Derivative [Line Items] | ' |
Volumes (Bbls) | 39,411 |
Derivative, Swap Type, Average Fixed Price | 88.9 |
2016 | ' |
Derivative [Line Items] | ' |
Volumes (Bbls) | 36,658 |
Derivative, Swap Type, Average Fixed Price | 86 |
Derivative_Contracts_Commodity7
Derivative Contracts - Commodity Derivative Positions Natural Gas Swaps (Details) (Natural Gas Swaps) | 9 Months Ended |
Sep. 30, 2014 | |
MMBTU | |
2014 | ' |
Derivative [Line Items] | ' |
Volumes (MMBtu) | 176,795 |
Derivative, Swap Type, Average Fixed Price | 4.09 |
2015 | ' |
Derivative [Line Items] | ' |
Volumes (MMBtu) | 800,573 |
Derivative, Swap Type, Average Fixed Price | 4.25 |
2016 | ' |
Derivative [Line Items] | ' |
Volumes (MMBtu) | 629,301 |
Derivative, Swap Type, Average Fixed Price | 4.37 |
Derivative_Contracts_Commodity8
Derivative Contracts - Commodity Derivative Positions Liquid Swaps (Details) (Natural Gas Liquid Swaps) | 9 Months Ended |
Sep. 30, 2014 | |
bbl | |
2014 | ' |
Derivative [Line Items] | ' |
Volumes (Bbls) | 168,924 |
Derivative, Swap Type, Average Fixed Price | 39.44 |
2015 | ' |
Derivative [Line Items] | ' |
Volumes (Bbls) | 84,793 |
Derivative, Swap Type, Average Fixed Price | 75.18 |
Derivative_Contracts_Offsettin
Derivative Contracts - Offsetting Commodity Derivative Assets and Liabilities (Details) (Commodity, USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Derivative [Line Items] | ' | ' |
Gross amounts of recognized assets | $1,630 | $2,980 |
Gross Amounts Offset | -410 | -2,190 |
Net Amounts Presented | 1,220 | 790 |
Gross amounts of recognized liabilities | 1,055 | 5,394 |
Gross Amounts Offset | -410 | -2,190 |
Net Amounts Presented | 645 | 3,204 |
Current Assets | ' | ' |
Derivative [Line Items] | ' | ' |
Gross amounts of recognized assets | 1,065 | 1,342 |
Gross Amounts Offset | -404 | -1,212 |
Net Amounts Presented | 661 | 130 |
Long-term Assets | ' | ' |
Derivative [Line Items] | ' | ' |
Gross amounts of recognized assets | 565 | 1,638 |
Gross Amounts Offset | -6 | -978 |
Net Amounts Presented | 559 | 660 |
Current Liabilities | ' | ' |
Derivative [Line Items] | ' | ' |
Gross amounts of recognized liabilities | 1,012 | 4,379 |
Gross Amounts Offset | -404 | -1,212 |
Net Amounts Presented | 608 | 3,167 |
Long-term Liabilities | ' | ' |
Derivative [Line Items] | ' | ' |
Gross amounts of recognized liabilities | 43 | 1,015 |
Gross Amounts Offset | -6 | -978 |
Net Amounts Presented | $37 | $37 |
Derivative_Contracts_Gains_Los
Derivative Contracts - Gains (Losses) on Derivative Contracts (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ' | ' | ' | ||||
Gain (loss) on derivative contracts, net | $3,768 | [1] | ($3,453) | [1] | ($760) | [1] | ($2,597) | [1] |
[1] | Included in gain (loss) on derivative contracts for the three months ended September 30, 2014 and 2013 are net cash payments upon contract settlement of $0.3 million and $0.5 million, respectively. Included in loss on derivative contracts for the nine months ended September 30, 2014 and 2013 are net cash payments upon contract settlement of $3.8 million and $0.9 million, respectively. |
Derivative_Contracts_Details
Derivative Contracts (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ' | ' | ' |
Cash paid on settlement of derivative contracts | ($338) | ($500) | ($3,750) | ($878) |
Fair_Value_Measurements_Deriva
Fair Value Measurements - Derivative Assets and Contingent Consideration Measured at Fair Value (Details) (USD $) | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
Fair Value, Inputs, Level 3 | Fair Value, Inputs, Level 3 | Fair Value, Inputs, Level 3 | Fair Value, Inputs, Level 3 | Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | Fair Value, Measurements, Recurring | ||||
Fair Value, Inputs, Level 1 | Fair Value, Inputs, Level 1 | Fair Value, Inputs, Level 2 | Fair Value, Inputs, Level 2 | Fair Value, Inputs, Level 3 | Fair Value, Inputs, Level 3 | Oil And Natural Gas Collars | Oil And Natural Gas Collars | Oil And Natural Gas Collars | Oil And Natural Gas Collars | Natural Gas and NGL Puts | Natural Gas and NGL Puts | Natural Gas and NGL Puts | Natural Gas and NGL Puts | Natural Gas and NGL Puts | Natural Gas and NGL Puts | Natural Gas and NGL Puts | Natural Gas and NGL Puts | Oil Collar | Oil Collar | Oil Collar | Oil Collar | Natural Gas Collars | Natural Gas Collars | Natural Gas Collars | Natural Gas Collars | Oil Put Options | Oil Put Options | Oil Put Options | Oil Put Options | Oil and Natural Gas Swaps | Oil and Natural Gas Swaps | Oil and Natural Gas Swaps | Oil and Natural Gas Swaps | Oil, Natural Gas and NGL Swaps | Oil, Natural Gas and NGL Swaps | Oil, Natural Gas and NGL Swaps | Oil, Natural Gas and NGL Swaps | NGL Swaps | NGL Swaps | NGL Swaps | NGL Swaps | |||||||||||
Fair Value, Inputs, Level 1 | Fair Value, Inputs, Level 2 | Fair Value, Inputs, Level 3 | Fair Value, Inputs, Level 1 | Fair Value, Inputs, Level 1 | Fair Value, Inputs, Level 2 | Fair Value, Inputs, Level 2 | Fair Value, Inputs, Level 3 | Fair Value, Inputs, Level 3 | Fair Value, Inputs, Level 1 | Fair Value, Inputs, Level 2 | Fair Value, Inputs, Level 3 | Fair Value, Inputs, Level 1 | Fair Value, Inputs, Level 2 | Fair Value, Inputs, Level 3 | Fair Value, Inputs, Level 1 | Fair Value, Inputs, Level 2 | Fair Value, Inputs, Level 3 | Fair Value, Inputs, Level 1 | Fair Value, Inputs, Level 2 | Fair Value, Inputs, Level 3 | Fair Value, Inputs, Level 1 | Fair Value, Inputs, Level 2 | Fair Value, Inputs, Level 3 | Fair Value, Inputs, Level 1 | Fair Value, Inputs, Level 2 | Fair Value, Inputs, Level 3 | ||||||||||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net fair value of derivative | ' | ' | ' | $0 | ($2,517,000) | ($965,000) | $1,866,000 | ($112,000) | ' | ' | ' | ' | ' | ' | ' | ' | $157,000 | $0 | $157,000 | $0 | $539,000 | $403,000 | $0 | $0 | $539,000 | $0 | $0 | $403,000 | ($57,000) | $0 | ($57,000) | $0 | ($9,000) | $0 | $0 | ($9,000) | $28,000 | $0 | $28,000 | $0 | $132,000 | $0 | $132,000 | $0 | ($121,000) | $0 | ($121,000) | $0 | ($2,911,000) | $0 | $0 | ($2,911,000) |
Contingent consideration | -36,854,000 | -26,609,000 | -6,320,000 | ' | ' | ' | ' | ' | -36,854,000 | -6,320,000 | 0 | 0 | 0 | 0 | -36,854,000 | -6,320,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total | ' | ' | ' | ' | ' | ' | ' | ' | ($36,279,000) | ($8,734,000) | $0 | $0 | $575,000 | $103,000 | ($36,854,000) | ($8,837,000) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair_Value_Measurements_Fair_V
Fair Value Measurements - Fair Value of Allocated Derivative Assets and Liabilities (Details) (Fair Value, Inputs, Level 3, USD $) | 3 Months Ended | 9 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |||
Fair Value, Inputs, Level 3 | ' | ' | ' | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | |||
Beginning balance | $1,866 | ($2,517) | ($112) | |||
Loss on derivative contracts | -3,277 | -2,432 | -1,522 | |||
Transfers out | 0 | [1] | 2,843 | [1] | 0 | [1] |
Cash paid upon settlement | 446 | 2,106 | 669 | |||
Ending balance | -965 | 0 | -965 | |||
Unrealized losses included in earnings relating to derivatives held at period end | ($2,677) | $0 | ($884) | |||
[1] | Fair values related to the Companybs natural gas collars, natural gas and NGL put options and NGL fixed price swaps were transferred from Level 3 to Level 2 in the second quarter of 2014 due to enhancements to the Companybs internal valuation process, including the use of observable inputs to assess the fair value. During the three and nine months ended September 30, 2013, the Company did not have any transfers between Level 1, Level 2 or Level 3 fair value measurements. The Companybs policy is to recognize transfers in and/or out of fair value hierarchy levels as of the beginning of the quarterly reporting period in which the event or change in circumstances causing the transfer occurred. |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value Disclosures [Abstract] | ' | ' |
Outstanding balance of line of credit | $92,250 | $78,500 |
Notes payable | $21,889 | $2,233 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets - Schedule of Goodwill (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 26, 2014 | ||
Goodwill [Roll Forward] | ' | ' | ' | ||
Goodwill at December 31, 2013 | ' | $23,974 | ' | ||
Change due to purchase price allocation adjustments | 3,800 | 3,836 | [1] | ' | |
Goodwill at September 30, 2014 | 43,534 | 43,534 | ' | ||
EFS and RPS | ' | ' | ' | ||
Goodwill [Roll Forward] | ' | ' | ' | ||
Goodwill at December 31, 2013 | ' | ' | 15,397 | [2],[3] | |
Additions | ' | 11,664 | ' | ||
Change due to purchase price allocation adjustments | 3,700 | ' | ' | ||
Goodwill at September 30, 2014 | ' | ' | 15,397 | [2],[3] | |
MCCS | ' | ' | ' | ||
Goodwill [Roll Forward] | ' | ' | ' | ||
Goodwill at December 31, 2013 | ' | ' | 4,060 | [4] | |
Additions | ' | 4,060 | ' | ||
Goodwill at September 30, 2014 | ' | ' | $4,060 | [4] | |
[1] | Includes adjustments totaling $3.8 million during the three months ended September 30, 2014 as a result of purchase price allocation adjustments of $0.1 million and $3.7 million on the MCE Acquisition and Services Acquisition, respectively. See Note 2 "Acquisitions" for discussion of the purchase price allocation adjustments. | ||||
[2] | Includes purchase price allocation adjustments, resulting in an increase totaling $3.7 million to goodwill, during the three months ended September 30, 2014, based on additional information received primarily on other current assets and property and equipment acquired. | ||||
[3] | Goodwill is calculated as the excess of the consideration transferred over the fair value of net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Such goodwill is not deductible for tax purposes. Specifically, the goodwill recorded as part of the Services Acquisition includes any intangible assets that do not qualify for separate recognition, such as the EFS and RPS trained, skilled and assembled workforce, along with the expected synergies from leveraging the customer relationships. Goodwill has been allocated to the oilfield services segment. During the three months ended, a purchase price allocation adjustment was made to increase the amount assigned to goodwill by approximately $3.7 million, primarily as a result of an increase to the value of the contingent consideration based on additional information made available. | ||||
[4] | Goodwill is calculated as the excess of the consideration transferred over the fair value of net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Such goodwill is not deductible for tax purposes. Specifically, the goodwill recorded as part of the acquisition of MCCS includes any intangible assets that do not qualify for separate recognition, such as the MCCS trained, skilled and assembled workforce, along with the expected synergies from leveraging the customer relationships and integrating new product offerings into MCCS's business. Goodwill has been allocated to the oilfield services segment. |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets (Details) (USD $) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2014 | ||
Finite-Lived Intangible Assets [Line Items] | ' | ' | |
Change due to purchase price allocation adjustments | ($3,800,000) | ($3,836,000) | [1] |
Amortization expense | 9,400,000 | 15,600,000 | |
MidCentral Energy Services | ' | ' | |
Finite-Lived Intangible Assets [Line Items] | ' | ' | |
Change due to purchase price allocation adjustments | -100,000 | ' | |
EFS and RPS | ' | ' | |
Finite-Lived Intangible Assets [Line Items] | ' | ' | |
Change due to purchase price allocation adjustments | ($3,700,000) | ' | |
[1] | Includes adjustments totaling $3.8 million during the three months ended September 30, 2014 as a result of purchase price allocation adjustments of $0.1 million and $3.7 million on the MCE Acquisition and Services Acquisition, respectively. See Note 2 "Acquisitions" for discussion of the purchase price allocation adjustments. |
Goodwill_and_Intangible_Assets4
Goodwill and Intangible Assets - Schedule of Finite-Lived Intangible Assets (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Total intangible assets | $107,172 | $36,772 |
Less: accumulated amortization | 17,359 | 1,763 |
Intangible assets, net | 89,813 | 35,009 |
MidCentral Energy Services | Customer Relationships | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Total intangible assets | 36,772 | 36,772 |
EFS and RPS | Customer Relationships | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Total intangible assets | 64,200 | 0 |
EFS and RPS | Noncompete Agreements | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Total intangible assets | 4,500 | 0 |
MCCS | Customer Relationships | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Total intangible assets | $1,700 | $0 |
Equity_Details
Equity (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | ||||||||||
Apr. 29, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Jun. 26, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Apr. 29, 2014 | Sep. 30, 2014 | Jun. 26, 2014 | Jun. 26, 2014 | Jun. 26, 2014 | |
EFS and RPS | Class B Units | Class B Units | Class B Units | First Target Distribution | First Target Distribution | Second Target Distribution | Second Target Distribution | Third and Thereafter Target Distribution | Common Units | Common Units | Common Units | Common Units | Common Units | ||||||
Maximum | Class B Units | Maximum | Class B Units | Class B Units | Phantom Units | Phantom Units | Phantom Units | ||||||||||||
EFS and RPS | EFS and RPS | EFS and RPS | |||||||||||||||||
Service Requirement Units | Maximum | ||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common units in acquisitions (in units) | ' | ' | ' | ' | ' | 1,411,777 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,964,957 | ' | ' | ' |
Common partnership units sold in public offering | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,450,000 | ' | ' | ' | ' |
Unit price of units sold in public offering | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $23.25 | ' | ' | ' | ' |
Proceeds from public offering of common partnership units | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $76,200,000 | ' | ' | ' | ' |
Underwriter's fees associated with public sale of common units | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,600,000 | ' | ' | ' | ' |
Offering costs associated with public sale of common units | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 | ' | ' | ' | ' |
Net proceeds from offering used to repay credit facility | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Days after quarter end in which distributions are declared and distributed | ' | ' | ' | '45 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increasing distribution percentage associated with Class B Units | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15.00% | ' | 25.00% | 50.00% | ' | ' | ' | ' | ' |
Distributions | ' | ' | ' | ' | ' | ' | 200,000 | 0 | 0 | 20,144 | ' | 24,173 | ' | ' | ' | ' | ' | ' | ' |
Equity-based compensation expense | ' | 1,300,000 | 0 | 1,906,000 | 7,738,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Phantom units granted (in units) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 432,038 | 401,171 | ' |
Value of phantom units granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,400,000 | ' | ' |
Compensation expense | ' | ' | ' | ' | 400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Phantom unit vesting period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2 years |
Fair value of units granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $8,200,000 | ' | ' |
Equity_Schedule_of_Distributio
Equity - Schedule of Distributions (Details) (USD $) | 3 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2013 | Jun. 30, 2013 | |||||
Schedule of Incentive Distribution Made to Unitholders [Table] [Line Items] | ' | ' | ' | ' | ' | |||||
Distributions | $10,406 | [1] | $9,221 | [2] | $6,038 | [3] | $5,252 | [3] | $2,504 | [4] |
Common Units | ' | ' | ' | ' | ' | |||||
Schedule of Incentive Distribution Made to Unitholders [Table] [Line Items] | ' | ' | ' | ' | ' | |||||
Distributions | 9,025 | [1] | 7,852 | [2] | 4,681 | [3] | 3,895 | [3] | 1,857 | [4] |
Subordinated Units | ' | ' | ' | ' | ' | |||||
Schedule of Incentive Distribution Made to Unitholders [Table] [Line Items] | ' | ' | ' | ' | ' | |||||
Distributions | 1,290 | [1] | 1,279 | [2] | 1,268 | [3] | 1,268 | [3] | 604 | [4] |
General Partnership Units | ' | ' | ' | ' | ' | |||||
Schedule of Incentive Distribution Made to Unitholders [Table] [Line Items] | ' | ' | ' | ' | ' | |||||
Distributions | $91 | [1] | $90 | [2] | $89 | [3] | $89 | [3] | $43 | [4] |
Cash Distribution | ' | ' | ' | ' | ' | |||||
Schedule of Incentive Distribution Made to Unitholders [Table] [Line Items] | ' | ' | ' | ' | ' | |||||
Distributions paid (in usd per unit) | $0.59 | $0.58 | $0.57 | $0.57 | $0.53 | |||||
Period of Prorated Distribution | ' | ' | ' | ' | '47 days | |||||
[1] | Reflects quarterly distributions of $0.585 per unit paid in the third quarter of 2014. | |||||||||
[2] | Reflects quarterly distributions of $0.58 per unit paid in the second quarter of 2014. | |||||||||
[3] | Reflects quarterly distributions of $0.575 per unit paid in the third quarter of 2013 and the first quarter of 2014. | |||||||||
[4] | Prorated to reflect 47 days of the quarterly cash distribution of $0.525 per unit paid in the second quarter of 2013. |
Equity_Allocation_of_Distribut
Equity - Allocation of Distributions (Details) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Minimum Quarterly Distribution [Member] | ' |
Incentive Distribution Made to Managing Member or General Partner [Line Items] | ' |
Distributions | $16,116 |
Minimum | First Target Distribution | ' |
Incentive Distribution Made to Managing Member or General Partner [Line Items] | ' |
Distributions | 18,533 |
Minimum | Second Target Distribution | ' |
Incentive Distribution Made to Managing Member or General Partner [Line Items] | ' |
Distributions | 20,145 |
Minimum | Third and Thereafter Target Distribution | ' |
Incentive Distribution Made to Managing Member or General Partner [Line Items] | ' |
Distributions | 24,174 |
Maximum | First Target Distribution | ' |
Incentive Distribution Made to Managing Member or General Partner [Line Items] | ' |
Distributions | 20,144 |
Maximum | Second Target Distribution | ' |
Incentive Distribution Made to Managing Member or General Partner [Line Items] | ' |
Distributions | $24,173 |
New Source Energy Partners LP | Minimum Quarterly Distribution [Member] | ' |
Incentive Distribution Made to Managing Member or General Partner [Line Items] | ' |
Marginal percentage interest in distributions | 100.00% |
New Source Energy Partners LP | First Target Distribution | ' |
Incentive Distribution Made to Managing Member or General Partner [Line Items] | ' |
Marginal percentage interest in distributions | 85.00% |
New Source Energy Partners LP | Second Target Distribution | ' |
Incentive Distribution Made to Managing Member or General Partner [Line Items] | ' |
Marginal percentage interest in distributions | 75.00% |
New Source Energy Partners LP | Third and Thereafter Target Distribution | ' |
Incentive Distribution Made to Managing Member or General Partner [Line Items] | ' |
Marginal percentage interest in distributions | 50.00% |
Class B | Minimum Quarterly Distribution [Member] | ' |
Incentive Distribution Made to Managing Member or General Partner [Line Items] | ' |
Marginal percentage interest in distributions | 0.00% |
Class B | First Target Distribution | ' |
Incentive Distribution Made to Managing Member or General Partner [Line Items] | ' |
Marginal percentage interest in distributions | 15.00% |
Class B | Second Target Distribution | ' |
Incentive Distribution Made to Managing Member or General Partner [Line Items] | ' |
Marginal percentage interest in distributions | 25.00% |
Class B | Third and Thereafter Target Distribution | ' |
Incentive Distribution Made to Managing Member or General Partner [Line Items] | ' |
Marginal percentage interest in distributions | 50.00% |
Earnings_per_Unit_Earnings_Per
Earnings per Unit - Earnings Per Unit (Details) (USD $) | 1 Months Ended | 3 Months Ended | 5 Months Ended | 9 Months Ended | ||||
In Thousands, except Share data, unless otherwise specified | Feb. 11, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ' | ' | ' | ' | ' | ' | ||
Common units excluded from EPS calculation because of antidilutive effect | ' | 3,257 | ' | ' | 9,664 | ' | ||
Net loss | $5,303 | ($2,996) | ($1,986) | ($535) | ($2,943) | $4,768 | ||
Common Stock Units | ' | ' | ' | ' | ' | ' | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ' | ' | ' | ' | ' | ' | ||
Net loss | ' | -2,599 | -1,473 | [1] | ' | -2,503 | -76 | [1] |
Weighted average units outstanding | ' | 15,428,822 | 6,773,500 | ' | 12,646,084 | 6,480,439 | ||
Basic and diluted income per unit (in usd per unit) | ' | ($0.17) | ($0.22) | ' | ($0.20) | ($0.01) | ||
Subordinated Units | ' | ' | ' | ' | ' | ' | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ' | ' | ' | ' | ' | ' | ||
Net loss | ' | -371 | -479 | [1] | ' | -411 | -430 | [1] |
Weighted average units outstanding | ' | 2,205,000 | 2,205,000 | ' | 2,205,000 | 2,205,000 | ||
Basic and diluted income per unit (in usd per unit) | ' | ($0.17) | ($0.22) | ' | ($0.19) | ($0.20) | ||
General Partnership Units | ' | ' | ' | ' | ' | ' | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ' | ' | ' | ' | ' | ' | ||
Net loss | ' | ($26) | ($34) | [1] | ' | ($29) | ($29) | [1] |
Weighted average units outstanding | ' | 155,102 | 155,102 | ' | 155,102 | 154,503 | ||
Basic and diluted income per unit (in usd per unit) | ' | ($0.17) | ($0.22) | ' | ($0.19) | ($0.19) | ||
[1] | Reflects net loss from February 13, 2013 through September 30, 2013 for the nine months ended September 30, 2013. |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 3 Months Ended | ||||||||||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | ||
General Partner | General Partner | General Partner | Board of Directors Chairman | Chief Executive Officer | New Dominion LLC | New Dominion LLC | Chief Financial Officer | Chief Financial Officer | General Partner | Subordinated Units | MCCS | MidCentral Energy Services | MidCentral Energy Services | Class B Units | Class B Units | Class B Units | |||||||
Chief Executive Officer | Board of Directors Chairman | Chief Executive Officer | President | ||||||||||||||||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Ownership percentage of reporting company | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | ' | ' | ' | ' | ' | 69.40% | ' | ' | ' | ' | ' | ' | ' | |
Percentage of common stock owned | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.30% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Percentage of common stock owned | ' | ' | ' | ' | ' | ' | ' | ' | 17.20% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Percentage of subordinate units owned | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Number of subordinate units owned | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,205,000 | ' | ' | ' | ' | ' | ' | |
Leasehold cost obligations | $400,000 | ' | $400,000 | ' | $400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Charges and fees due to related parties | 5,103,000 | ' | 5,103,000 | ' | 8,221,000 | ' | ' | ' | ' | ' | 2,200,000 | 1,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Service management fees | ' | 700,000 | ' | 1,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
General and administrative expense | 13,785,000 | 1,353,000 | 22,835,000 | 11,452,000 | [1] | ' | 500,000 | 1,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from operational advances | ' | ' | ' | ' | ' | ' | 1,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Payments for operational advances | ' | ' | ' | ' | ' | ' | 1,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Professional fees paid | ' | ' | ' | ' | ' | ' | 800,000 | 400,000 | ' | ' | ' | ' | 60,000 | 400,000 | ' | ' | ' | ' | ' | ' | ' | ' | |
Ownership percentage of acquired entity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 36.00% | 36.00% | ' | ' | ' | |
Distributions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | 0 | 0 | |
Liability assumed in acquisition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $700,000 | ' | ' | ' | ' | ' | |
Ownership percentage in Finley & Cook | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 31.50% | 31.50% | ' | ' | ' | ' | ' | ' | ' | ' | |
[1] | Includes $7.7 million of compensation expense related to common units granted to consultants, officers, directors and employees in conjunction with our initial public offering. |
Related_Party_Transactions_Sum
Related Party Transactions - Summary of Related Party Transactions (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Related Party Costs | $944 | $912 | $3,385 | $2,025 |
Producing Overhead Charges | New Dominion LLC | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Related Party Costs | 624 | 464 | 2,080 | 1,277 |
Drilling And Completion Overhead Charges | New Dominion LLC | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Related Party Costs | 60 | 119 | 230 | 246 |
Saltwater Disposal Fees | New Dominion LLC | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Related Party Costs | $260 | $329 | $1,075 | $502 |
Property_Plant_and_Equipment_S
Property, Plant and Equipment - Schedule of Property and Equipment (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, net | $63,281 | $8,166 |
Iron | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Total | 11,212 | 2,971 |
Oilfield Services | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Total | 65,747 | 8,368 |
Less: accumulated depreciation | -2,466 | -202 |
Property and equipment, net | 63,281 | 8,166 |
Oilfield Services | Vehicles and Transportation Equipment | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Total | 15,317 | 561 |
Oilfield Services | Machinery and Equipment | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Total | 38,746 | 4,757 |
Oilfield Services | Office Furniture and Equipment | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Total | $472 | $79 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Annual maintenance drilling budget | $8,200,000 |
Maintenance budget incurred to date | 10,500,000 |
Estimated contingency loss | $250,000 |
Asset_Retirement_Obligations_C
Asset Retirement Obligations - Changes in Asset Retirement Obligations (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | ' | ' | ' | ' |
Asset retirement obligation at December 31, 2013 | ' | ' | $3,455 | ' |
Liability incurred upon acquiring and drilling wells | ' | ' | 235 | ' |
Liability settled or disposed | ' | ' | -32 | ' |
Accretion | 77 | 59 | 219 | 145 |
Asset retirement obligation at September 30, 2014 | $3,877 | ' | $3,877 | ' |
Business_Segment_Information_D
Business Segment Information (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
segment | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Number of operating segments | ' | ' | 2 | ' |
Equity-based compensation | $1,300 | $0 | $1,906 | $7,738 |
Exploration and Production | General and Administrative Expenses | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Equity-based compensation | ' | ' | $7,700 | ' |
Business_Segment_Information_S
Business Segment Information - Summary of Segment Operating Activities (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | |||||
Revenue | $56,424 | $12,431 | $110,669 | $32,440 | ' | |||||
Direct operating expenses | 29,877 | 3,985 | 51,101 | 10,698 | ' | |||||
Segment margin | 26,547 | 8,446 | 59,568 | 21,742 | ' | |||||
General and administrative | 13,785 | 1,353 | 22,835 | 11,452 | [1] | ' | ||||
Depreciation, depletion, amortization and accretion | 17,837 | 4,972 | 37,548 | 11,831 | ' | |||||
Operating (loss) income | -5,075 | 2,121 | -815 | -1,541 | ' | |||||
Property, Plant and Equipment, Additions | 4,559 | [2] | 14,745 | [2] | 26,010 | [2] | 18,261 | [2] | ' | |
Total assets | 434,524 | ' | 434,524 | ' | 254,710 | |||||
Exploration and Production | ' | ' | ' | ' | ' | |||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | |||||
Revenue | 15,561 | 12,431 | 51,130 | 32,440 | ' | |||||
Direct operating expenses | 5,562 | 3,985 | 16,252 | 10,698 | ' | |||||
Segment margin | 9,999 | 8,446 | 34,878 | 21,742 | ' | |||||
General and administrative | 7,354 | 1,353 | 13,220 | 11,452 | [1] | ' | ||||
Depreciation, depletion, amortization and accretion | 6,834 | 4,972 | 19,692 | 11,831 | ' | |||||
Operating (loss) income | -4,189 | 2,121 | 1,966 | -1,541 | ' | |||||
Property, Plant and Equipment, Additions | 824 | [2] | 14,745 | [2] | 19,284 | [2] | 18,261 | [2] | ' | |
Total assets | 194,541 | ' | 194,541 | ' | 181,440 | |||||
Oilfield Services | ' | ' | ' | ' | ' | |||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | |||||
Revenue | 40,863 | [3] | 0 | [3] | 59,539 | [3] | 0 | [3] | ' | |
Direct operating expenses | 24,315 | [3] | 0 | [3] | 34,849 | [3] | 0 | [3] | ' | |
Segment margin | 16,548 | [3] | 0 | [3] | 24,690 | [3] | 0 | [3] | ' | |
General and administrative | 6,431 | [3] | 0 | [3] | 9,615 | [3] | 0 | [1],[3] | ' | |
Depreciation, depletion, amortization and accretion | 11,003 | [3] | 0 | [3] | 17,856 | [3] | 0 | [3] | ' | |
Operating (loss) income | -886 | [3] | 0 | [3] | -2,781 | [3] | 0 | [3] | ' | |
Property, Plant and Equipment, Additions | 3,735 | [2] | 0 | [2] | 6,726 | [2],[3] | 0 | [2],[3] | ' | |
Total assets | $239,983 | [3] | ' | $239,983 | [3] | ' | $73,270 | [3] | ||
[1] | Includes $7.7 million of compensation expense related to common units granted to consultants, officers, directors and employees in conjunction with our initial public offering. | |||||||||
[2] | On an accrual basis and exclusive of acquisitions. | |||||||||
[3] | The Partnership's oilfield services segment was established with the MCE Acquisition that occurred in November 2013. See Note 2 "Acquisitions" for discussion. |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 0 Months Ended | 0 Months Ended | |||
Oct. 21, 2014 | Oct. 27, 2014 | Apr. 29, 2014 | Oct. 06, 2014 | Oct. 03, 2014 | |
Subsequent Event | MidCentral Energy Services | Common Units | Common Units | Common Units | |
Subsequent Event | Subsequent Event | Subsequent Event | |||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' |
Aggregate offering price | ' | ' | $76,200,000 | ' | $50,000,000 |
Common partnership units sold in public offering | ' | ' | 3,450,000 | 720,000 | ' |
Proceeds from sale of common units | ' | ' | ' | 16,400,000 | ' |
Distributions declared (in usd per unit) | $0.59 | ' | ' | ' | ' |
Capital lease obligations | ' | $25,000,000 | ' | ' | ' |
Subsequent_Events_Schedule_of_
Subsequent Events - Schedule of Distributions (Details) (USD $) | 3 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | ||||||||||||||||||||||||||||||||||||||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2013 | Jun. 30, 2013 | Oct. 21, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2013 | Jun. 30, 2013 | Oct. 21, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2013 | Jun. 30, 2013 | Oct. 21, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2013 | Jun. 30, 2013 | Oct. 21, 2014 | ||||||||||||||||||||||||
Subsequent Event | Common Units | Common Units | Common Units | Common Units | Common Units | Common Units | Subordinated Units | Subordinated Units | Subordinated Units | Subordinated Units | Subordinated Units | Subordinated Units | General Partnership Units | General Partnership Units | General Partnership Units | General Partnership Units | General Partnership Units | General Partnership Units | ||||||||||||||||||||||||||||||
Subsequent Event | Subsequent Event | Subsequent Event | ||||||||||||||||||||||||||||||||||||||||||||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||||||
Distributions | $10,406 | [1] | $9,221 | [2] | $6,038 | [3] | $5,252 | [3] | $2,504 | [4] | $10,835 | [3] | $9,025 | [1] | $7,852 | [2] | $4,681 | [3] | $3,895 | [3] | $1,857 | [4] | $9,454 | [3] | $1,290 | [1] | $1,279 | [2] | $1,268 | [3] | $1,268 | [3] | $604 | [4] | $1,290 | [3] | $91 | [1] | $90 | [2] | $89 | [3] | $89 | [3] | $43 | [4] | $91 | [3] |
[1] | Reflects quarterly distributions of $0.585 per unit paid in the third quarter of 2014. | |||||||||||||||||||||||||||||||||||||||||||||||
[2] | Reflects quarterly distributions of $0.58 per unit paid in the second quarter of 2014. | |||||||||||||||||||||||||||||||||||||||||||||||
[3] | Reflects quarterly distributions of $0.575 per unit paid in the third quarter of 2013 and the first quarter of 2014. | |||||||||||||||||||||||||||||||||||||||||||||||
[4] | Prorated to reflect 47 days of the quarterly cash distribution of $0.525 per unit paid in the second quarter of 2013. |