Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 02, 2017 | |
Entity Information [Line Items] | ||
Entity Registrant Name | CONE Midstream Partners LP | |
Entity Central Index Key | 1,610,418 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common Units | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 34,426,482 | |
Subordinated Units | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 29,163,121 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Revenue | |||||
Gathering revenue — related party | $ 32,699 | $ 60,729 | $ 147,324 | $ 181,384 | |
Gathering revenue — third party | 23,959 | 0 | 24,826 | 0 | |
Total Revenue | 56,658 | 60,729 | 172,150 | 181,384 | |
Expenses | |||||
Operating expense — related party | 6,324 | 7,209 | 21,041 | 22,631 | |
Operating expense — third party | 6,332 | 7,769 | 18,922 | 24,322 | |
General and administrative expense — related party | 2,713 | 2,624 | 8,364 | 6,521 | |
General and administrative expense — third party | 995 | 1,049 | 3,115 | 3,196 | |
Loss on asset sales | 0 | 0 | 3,914 | 10,083 | |
Depreciation expense | 5,629 | 5,392 | 16,975 | 15,384 | |
Interest expense | 1,197 | 305 | 3,359 | 1,105 | |
Total Expense | 23,190 | 24,348 | 75,690 | 83,242 | |
Net Income | 33,468 | 36,381 | 96,460 | 98,142 | |
Less: Net income attributable to noncontrolling interest | 4,554 | 12,750 | 8,488 | 26,505 | |
Net Income Attributable to General and Limited Partner Ownership Interest in CONE Midstream Partners LP | 28,914 | 23,631 | 87,972 | 71,637 | |
Calculation of Limited Partner Interest in Net Income: | |||||
Net Income Attributable to General and Limited Partner Ownership Interest in CONE Midstream Partners LP | 28,914 | 23,631 | 87,972 | 71,637 | |
Less: General partner interest in net income, including incentive distribution rights | 1,504 | 473 | 3,938 | 1,433 | |
Limited partner interest in net income | $ 27,410 | $ 23,158 | $ 84,034 | $ 70,204 | |
Net income per limited partner unit - Basic (in dollars per unit) | $ 0.43 | $ 0.40 | $ 1.32 | $ 1.20 | |
Net income per limited partner unit - Diluted (in dollars per unit) | $ 0.43 | $ 0.40 | $ 1.32 | $ 1.20 | |
Limited partner units outstanding - Basic (in shares) | 63,588 | 58,343 | 63,580 | 58,343 | |
Limited partner units outstanding - Diluted (in shares) | 63,645 | 58,431 | 63,631 | 58,410 | |
Cash distributions declared per unit (in dollars per share) | [1] | $ 0.3025 | $ 0.2630 | $ 0.8768 | $ 0.762 |
[1] | Represents the cash distributions declared during the month following the end of each respective quarterly period. See Note 16. |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash | $ 3,839 | $ 6,421 |
Receivables — related party (Note 7) | 11,797 | 22,434 |
Receivables — third party (Note 7) | 7,759 | 0 |
Other current assets | 1,744 | 2,181 |
Total Current Assets | 25,139 | 31,036 |
Property and Equipment (Note 8): : | ||
Property and equipment | 953,766 | 930,732 |
Less — accumulated depreciation | 67,932 | 52,172 |
Property and Equipment, Net | 885,834 | 878,560 |
Other assets (Note 9) | 634 | 8,961 |
TOTAL ASSETS | 911,607 | 918,557 |
Current Liabilities: | ||
Accounts payable | 18,530 | 18,007 |
Accounts payable — related party (Note 10) | 2,248 | 8,289 |
Total Current Liabilities | 20,778 | 26,296 |
Other Liabilities: | ||
Revolving credit facility (Note 11) | 157,000 | 167,000 |
Total Liabilities | 177,778 | 193,296 |
Partners' Capital: | ||
General partner interest | 3,988 | (2,311) |
Partners' capital attributable to CONE Midstream Partners LP | 387,054 | 350,055 |
Noncontrolling interest | 346,775 | 375,206 |
Total Partners' Capital | 733,829 | 725,261 |
TOTAL LIABILITIES AND PARTNERS' CAPITAL | 911,607 | 918,557 |
Common Units | ||
Partners' Capital: | ||
Limited partners' capital | 435,202 | 418,352 |
Subordinated Units | ||
Partners' Capital: | ||
Limited partners' capital | $ (52,136) | $ (65,986) |
CONSOLIDATED BALANCE SHEETS (U4
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - shares | Sep. 30, 2017 | Dec. 31, 2016 |
Common Units | ||
Units issued (in shares) | 34,426,482 | 34,363,371 |
Units outstanding (in shares) | 34,426,482 | 34,363,371 |
Subordinated Units | ||
Units issued (in shares) | 29,163,121 | 29,163,121 |
Units outstanding (in shares) | 29,163,121 | 29,163,121 |
CONSOLIDATED STATEMENTS OF PART
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL AND NONCONTROLLING INTEREST (Unaudited) - 9 months ended Sep. 30, 2017 - USD ($) $ in Thousands | Total | Total Capital Attributable to Partners | Total Capital Attributable to PartnersLimited PartnersCommon Units | Total Capital Attributable to PartnersLimited PartnersSubordinated Units | Total Capital Attributable to PartnersGeneral Partner | Noncontrolling Interest |
Partners' Capital, beginning balance at Dec. 31, 2016 | $ 725,261 | $ 350,055 | $ 418,352 | $ (65,986) | $ (2,311) | $ 375,206 |
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||
Net income | 96,460 | 87,972 | 45,492 | 38,542 | 3,938 | 8,488 |
Contributions from (distributions to) general partner and noncontrolling interest holders, net | (36,890) | 29 | 29 | (36,919) | ||
Quarterly distributions to unitholders | (56,544) | (56,544) | (29,130) | (24,692) | (2,722) | |
Noncash contribution of assets held by general partner | 5,054 | 5,054 | 5,054 | |||
Unit-based compensation | 899 | 899 | 899 | |||
Vested units withheld for unitholder taxes | (411) | (411) | (411) | |||
Partners' Capital, ending balance at Sep. 30, 2017 | $ 733,829 | $ 387,054 | $ 435,202 | $ (52,136) | $ 3,988 | $ 346,775 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash Flows from Operating Activities: | ||
Net income | $ 96,460 | $ 98,142 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation expense and amortization of debt issuance costs | 17,101 | 15,507 |
Unit-based compensation | 899 | 577 |
Loss on asset sales | 3,914 | 10,083 |
Other | 680 | 580 |
Changes in assets and liabilities: | ||
Receivables — related party | 10,637 | 9,411 |
Receivables — third party | (7,759) | 0 |
Other current and non-current assets | 588 | 606 |
Accounts payable | (1,874) | (11,961) |
Accounts payable — related party | (6,009) | (7) |
Net Cash Provided by Operating Activities | 114,637 | 122,938 |
Cash Flows from Investing Activities: | ||
Capital expenditures | (34,905) | (40,466) |
Proceeds from sale of assets | 21,531 | 237 |
Net Cash Used in Investing Activities | (13,374) | (40,229) |
Cash Flows from Financing Activities: | ||
Distributions to general partner and noncontrolling interest holders, net | (36,890) | (2,344) |
Quarterly distributions to unitholders | (56,544) | (43,863) |
Net payments on revolving credit facility | (10,000) | (32,500) |
Vested units withheld for unitholders taxes | (411) | (23) |
Net Cash Used In Financing Activities | (103,845) | (78,730) |
Net (Decrease) Increase in Cash | (2,582) | 3,979 |
Cash at Beginning of Period | 6,421 | 217 |
Cash at End of Period | 3,839 | 4,196 |
Cash paid during the period for: | ||
Interest | $ 3,352 | $ 1,141 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS CONE Midstream Partners LP (the “ Partnership") is a master limited partnership formed in May 2014 by CONSOL Energy Inc. (NYSE: CNX) ( “ CONSOL”) and Noble Energy, Inc. (NYSE: NBL) ( “ Noble Energy”) primarily to own, operate, develop and acquire natural gas gathering and other midstream energy assets to service each of CONSOL's and Noble Energy's production in the Marcellus Shale in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. The Partnership's general partner is CONE Midstream GP LLC (our “ general partner”), a wholly owned subsidiary of CONE Gathering LLC ( “ CONE Gathering”). CONE Gathering, a Delaware limited liability company, is a joint venture formed by CONSOL and Noble Energy in September 2011. Noble Energy Sale of Upstream Assets On June 28, 2017, Noble Energy closed the previously announced sale of its upstream assets in northern West Virginia and southern Pennsylvania to HG Energy II Appalachia, LLC (“HG Energy”), a portfolio company of Quantum Energy Partners, LP (“Quantum”), effectively making HG Energy the new shipper on the dedicated acreage that was previously owned by Noble Energy (the “Noble Energy Asset Sale”). In connection with the Noble Energy Asset Sale, Noble Energy provided notice to the Partnership of its release of approximately 37,000 undeveloped acres, which were primarily within the Growth and Additional Systems, from amounts dedicated to us as per the terms of our gathering agreement, which is more fully discussed in Note 5. The Partnership is in the process of confirming the dedication status of the acres that were released. The Partnership currently gathers the natural gas and condensate volumes produced by HG Energy on our dedicated acreage under the terms of our gathering agreement with Noble Energy, which was assigned to HG Energy upon consummation of the Noble Energy Asset Sale. Noble Energy Proposed Sale of Interests in CONE Gathering and the Partnership On May 18, 2017, Noble Energy announced that it had reached an agreement to divest the holding company which owns its 50% membership interest in CONE Gathering, as well as 7,110,638 common units and 14,581,560 subordinated units in the Partnership (collectively, the “ Interests”), to Wheeling Creek Midstream, LLC ( “ Wheeling Creek”), a portfolio company of Quantum (the “Wheeling Creek Acquisition ” ) . The proposed transaction is subject to customary closing conditions. CONSOL has advised Noble Energy that CONSOL disagrees with Noble Energy’s ability to sell its interest in CONE Gathering, which owns our general partner, without first offering a preferential right of purchase to CONSOL. Accordingly, CONSOL has filed a lawsuit against Noble Energy seeking to enforce this right. Noble Energy disputes that CONSOL has such a right. A bench trial was concluded on October 20, 2017 and the Sponsors are awaiting a decision from the court. Given the pendency of the matter and the possibility of appeal by either Sponsor, Noble Energy's ability to close the Wheeling Creek Acquisition as originally contemplated is uncertain at this time. As of November 2, 2017, Noble Energy continues to own the Interests. Accordingly, in this Quarterly Report on Form 10-Q, we may refer to CONSOL and Noble Energy together as our Sponsors. Description of Business Our midstream assets are divided among three operating segments that we refer to as our “Anchor Systems,” “Growth Systems” and “Additional Systems” based on their relative current cash flows, growth profiles, capital expenditure requirements and the timing of their development. • Our Anchor Systems include our most developed midstream systems that generate the largest portion of our current cash flows, which includes our three primary midstream systems (the McQuay System, the Majorsville System and the Mamont System) and related assets. • Our Growth Systems are primarily located in the dry gas regions of our dedicated acreage that are generally in earlier phases of development and require substantial future expansion capital expenditures to materially increase production, which would primarily be funded by CONSOL and Noble Energy in proportion to CONE Gathering's 95% retained ownership interest. • Our Additional Systems include several gathering systems primarily located in the wet gas regions of our dedicated acreage that we expect will require lower levels of expansion capital investment relative to our Growth Systems. The substantial majority of capital investment on these systems would primarily be funded by CONSOL and Noble Energy in proportion to CONE Gathering's 95% retained ownership interest. On September 30, 2014 , in connection with the closing of the Partnership's initial public offering ( “ IPO”), CONE Gathering contributed to the Partnership a 75% controlling interest in the Anchor Systems, a 5% controlling interest in the Growth Systems and a 5% controlling interest in the Additional Systems. On November 16, 2016, the Partnership acquired the remaining 25% noncontrolling interest in the Anchor Systems from CONE Gathering (the “Anchor Systems Acquisition”), which was accounted for as a transaction between unitholders under Accounting Standards Codification (“ASC”) 810 - Consolidations. Accordingly, at December 31, 2016 and September 30, 2017, the Partnership owned a 100% controlling limited partner interest in the Anchor Systems and a 5% controlling limited partner interest in each of the Growth and Additional Systems. In order to maintain operational flexibility, our operations are conducted through, and our operating assets are owned by, our operating subsidiaries. However, neither we nor our operating subsidiaries have any employees. Our general partner has the sole responsibility for providing the personnel necessary to conduct our operations, whether through directly hiring employees or by obtaining the services of others, which may include personnel of our Sponsors as provided through contractual relationships with the Partnership. All of the personnel that conduct our business are employed or contracted by our general partner and its affiliates, including our Sponsors, but we sometimes refer to these individuals as our employees because they provide services directly to us. See Note 5 for details. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Use of Estimates The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ( “ GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and various disclosures. Actual results could differ from those estimates, which are evaluated on an ongoing basis, utilizing historical experience and other methods considered reasonable under the particular circumstances. Although these estimates are based on management’s best available knowledge at the time, changes in facts and circumstances or discovery of new facts or circumstances may result in revised estimates and actual results may differ from these estimates. Effects on the Partnership’s business, financial position and results of operations resulting from revisions to estimates are recognized when the facts that give rise to the revision become known. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the accompanying consolidated financial statements have been included. The balance sheet at December 31, 2016 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. Principles of Consolidation The consolidated financial statements include the accounts of the Partnership and all of its controlled subsidiaries, including 100% of each of the Anchor Systems, Growth Systems and Additional Systems. Although the Partnership has less than a 100% economic interest in the Growth and Additional Systems, each are consolidated fully with the results of the Partnership. However, after adjusting for noncontrolling interests, net income attributable to general and limited partner ownership interests in the Partnership reflects only that portion of net income that is attributable to the Partnership's unitholders. As a result of the Anchor Systems Acquisition, net income attributable to general and limited partner ownership interests in the Partnership includes 100% of the results of the Anchor Systems during the nine months ended September 30, 2017. Transactions between the Partnership and its Sponsors have been identified in the consolidated financial statements as transactions between related parties and are discussed in Note 5. Jumpstart Our Business Startups Act ( “ JOBS Act ” ) Under the JOBS Act, for as long as the Partnership remains an “emerging growth company” as defined in the JOBS Act, we may take advantage of certain exemptions from the Securities and Exchange Commission's ( “ SEC”) reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to provide an auditor’s attestation report on management’s assessment of the effectiveness of its system of internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and seeking unitholder approval of any golden parachute payments not previously approved. We may take advantage of these reporting exemptions until we are no longer an emerging growth company. We continue to be an emerging growth company at September 30, 2017 . The Partnership will remain an emerging growth company for up to five years from the date of our IPO (through December 31, 2019), although we will lose that status sooner if: • we have more than $1.0 billion of revenues in a fiscal year; • the limited partner interests held by non-affiliates have a market value of more than $700 million as of the last business day of our most recently completed second fiscal quarter, which determination shall be made as of the last day of such fiscal year; or • we issue more than $1.0 billion of non-convertible debt over a three -year period. The JOBS Act also provides that an emerging growth company can delay adopting new or revised accounting standards until such time as those standards apply to private companies. The Partnership has irrevocably elected to “opt out” of this exemption and, therefore, is and will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. Revenue Recognition Our revenues primarily consist of fees, which we charge on a per unit basis, for gathering natural gas that was produced by our shippers. We recognize revenue when services have been rendered, the prices are fixed or determinable, and collectibility is reasonably assured. The fees we charge CONSOL and the fees we charged Noble Energy, prior to consummation of the Noble Energy Asset Sale are recorded in gathering revenue — related party in our consolidated statements of operations. Following consummation of the Noble Energy Asset Sale, fees from midstream services we perform for HG Energy and any other third party shipper are recorded in gathering revenue — third party in our consolidated statements of operations. Cash Cash includes cash on hand and on deposit at banking institutions. Receivables Receivables are recorded at the invoiced amount and do not bear interest. When applicable, we reserve for specific accounts receivable when it is probable that all or a part of an outstanding balance will not be collected. Collectibility is determined based on terms of sale, credit status of customers and various other circumstances. We regularly review collectibility and establish or adjust the allowance as necessary using the specific identification method. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. There were no reserves for uncollectible amounts at September 30, 2017 or December 31, 2016 . Fair Value Measurement The Financial Accounting Standards Board (the “FASB”) ASC Topic 820, Fair Value Measurements and Disclosures, clarifies the definition of fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. This guidance also relates to all nonfinancial assets and liabilities that are not recognized or disclosed on a recurring basis (e.g., the initial recognition of asset retirement obligations and impairments of long‑lived assets). The fair value is the price that we estimate we would receive upon selling an asset or that we would pay to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy is used to prioritize input to valuation techniques used to estimate fair value. An asset or liability subject to the fair value requirements is categorized within the hierarchy based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The highest priority (Level 1) is given to unadjusted quoted market prices in active markets for identical assets or liabilities, and the lowest priority (Level 3) is given to unobservable inputs. Level 2 inputs are data, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly. The carrying values on our balance sheet of our current assets and liabilities approximate fair values due to their short maturities. The carrying value of our revolving credit facility approximates fair value as the facility bears interest at a variable, market rate that resets periodically. Property and Equipment Property and equipment is recorded at cost upon acquisition and is depreciated on a straight-line basis over the assets' estimated useful lives or over their lease terms. Expenditures which extend the useful lives of existing property and equipment are capitalized. When properties are retired or otherwise disposed, the related cost and accumulated depreciation are removed from the respective accounts and any profit or loss on disposition is recognized as a gain or loss. We routinely assess whether impairment indicators arise during any given quarter and have processes in place to ensure that we become aware of such indicators. Impairment indicators include, but are not limited to, sustained decreases in commodity prices, a decline in customer well results and lower throughput forecasts, and increases in construction or operating costs. For such long-lived assets, impairment exists when the carrying amount of an asset or group of assets exceeds our estimates of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or group of assets. If the carrying amount of the long-lived asset(s) is not recoverable, based on the estimated future undiscounted cash flows, the impairment loss would be measured as the excess of the asset’s carrying amount over its estimated fair value. In the event that impairment indicators exist, we conduct an impairment test. Fair value represents the estimated price between market participants to sell an asset in the principal or most advantageous market for the asset, based on assumptions a market participant would make. When warranted, management assesses the fair value of long-lived assets using commonly accepted techniques and may use more than one source in making such assessments. Sources used to determine fair value include, but are not limited to, recent third-party comparable sales, internally developed discounted cash flow analyses and analyses from outside advisors. Significant changes, such as the condition of an asset or management’s intent to utilize the asset, generally require management to reassess the cash flows related to long-lived assets. No property and equipment impairments were identified during the periods presented in the accompanying consolidated financial statements. Environmental Matters We are subject to various federal, state and local laws and regulations relating to the protection of the environment. Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations, and do not contribute to current or future revenue generation, are expensed. Liabilities are recorded when environmental assessments and/or clean-ups are probable, and the costs can be reasonably estimated. At this time, we are unable to assess the timing and/or effect of potential liabilities related to greenhouse gas emissions or other environmental issues. As of September 30, 2017 and December 31, 2016 , we had no material environmental matters that required the recognition of a separate liability or specific disclosure. Asset Retirement Obligations Our gathering pipelines and compressor stations have an indeterminate life. If properly maintained, they will operate for an indeterminate period as long as supply and demand for natural gas exists, which we expect for the foreseeable future. Accordingly, any retirement obligations associated with such assets cannot be estimated. A liability for asset retirement obligations will be recorded only if and when a future retirement obligation with a determinable life exists and can be estimated. We have not recorded any liabilities for asset retirement obligations at September 30, 2017 or December 31, 2016 . Variable Interest Entities Each of the Anchor, Growth and Additional Systems (the “ Limited Partnerships”) is also a limited partnership and a variable interest entity ( “ VIE”). These VIEs correspond with the manner in which we report our segment information in Note 14–Segment Information, which also includes information regarding the Partnership's involvement with each of these VIEs and their relative contributions to our financial position, operating results and cash flows. The Partnership fully consolidates each of the Limited Partnerships through its ownership of CONE Midstream Operating Company LLC (the “ Operating Company”). The Operating Company, through its general partner ownership interest in each of the Limited Partnerships, is considered to be the primary beneficiary for accounting purposes and has the power to direct all substantive strategic and day-to-day operational decisions of the Limited Partnerships. Equity Compensation Equity compensation expense for all unit-based compensation awards is based on the grant date fair value estimated in accordance with the provisions of the Stock Compensation Topic of the FASB Accounting Standards Codification. We recognize unit-based compensation costs on a straight-line basis over the requisite service period of an award, which is generally the same as the award's vesting term. See Note 15–Long Term Incentive Plan, for further discussion. Income Taxes We are treated as a partnership for federal and state income tax purposes, with each partner being separately taxed on its share of the Partnership's taxable income. Accordingly, no provision for federal or state income taxes has been recorded in the Partnership's consolidated financial statements for any period presented in the accompanying consolidated financial statements. Recent Accounting Pronouncements In May 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-09–Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting. ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The updated guidance is effective for interim and annual periods beginning after December 15, 2017, and early adoption is permitted. We do not believe the updated requirements will materially impact our consolidated financial statements. In January 2017, the FASB issued ASU 2017-01–Business Combinations (Topic 805): Clarifying the Definition of a Business, which changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. The updated guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets is not a business. ASU 2017-01 is effective for annual reporting periods beginning after December 31, 2017 and interim periods therein. The Partnership does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. In December 2016, the FASB issued ASU 2016-19–Technical Corrections and Improvements, which covers a wide range of Topics in the ASC. The amendments in this ASU represent changes to clarify, correct errors, or make minor improvements to the ASC, making it easier to understand and apply by eliminating inconsistencies and providing clarifications. The amendments generally fall into one of the following categories: amendments related to differences between original guidance and the ASC, guidance clarification and reference corrections, simplification, or minor improvements. Most of the amendments in ASU 2016-19 do not require transition guidance and are effective immediately. In August 2016, the FASB issued ASU 2016-15–Classification of Certain Cash Receipts and Cash Payments (Topic 230). ASU 2016-15 addresses the existing diversity in practice of how several specific cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows. ASU 2016-15 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2017. The Partnership does not expect the adoption of this guidance will have a material impact on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02–Leases (Topic 842), which is intended to improve financial reporting about leasing transactions. The ASU will require organizations (“lessees”) that lease assets with terms of more than 12 months to recognize the assets and liabilities for the rights and obligations created by those leases on the balance sheet. Organizations that own the assets leased by lessees (“lessors”) will remain largely unchanged from current GAAP. In addition, the ASU will require disclosures to help investors and other financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. The effective date of this ASU is for fiscal years beginning after December 31, 2018 and interim periods within that year. We are currently evaluating the impact that this standard will have on our financial statements and financial covenants with lenders; however, we do not believe this standard will materially adversely impact our existing credit agreements. In May 2014, the FASB issued ASU 2014-09–Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. The objective of the amendments in this update is to improve financial reporting by creating common revenue recognition guidance under both U.S. GAAP and International Financial Reporting Standards ( “ IFRS”). 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 and should disclose sufficient information, both qualitative and quantitative, to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The following updates to Topic 606 were made during 2016: • In March 2016, the FASB updated Topic 606 by issuing ASU 2016-08–Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarifies how an entity determines whether it is a principal or an agent for goods or services promised to a customer as well as the nature of the goods or services promised to their customers. • In April 2016, the FASB issued ASU 2016-10–Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which seeks to address implementation issues in the areas of identifying performance obligations and licensing. • In May 2016, the FASB issued ASU 2016-12–Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients. The update, which was issued in response to feedback received by the FASB-IASB joint revenue recognition transition resource group, seeks to address implementation issues in the areas of collectibility, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition. After considering the FASB's issuance of a standard that delayed application of Topic 606 by one year, the new standards are effective for annual reporting periods beginning after December 15, 2017. We expect to adopt Topic 606 using the modified retrospective method of adoption on January 1, 2018 and anticipate that this standard will not have a material impact on net income. We continue to evaluate the impact of the standard on related disclosures. |
PARTNERSHIP EQUITY AND DISTRIBU
PARTNERSHIP EQUITY AND DISTRIBUTIONS (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
PARTNERSHIP EQUITY AND DISTRIBUTIONS | PARTNERSHIP EQUITY AND DISTRIBUTIONS Cash Distributions Our partnership agreement requires that we distribute all of our available cash within 45 days after the end of each quarter to unitholders of record on the applicable record date. The Board of Directors of the Partnership’s general partner (the “Board of Directors ”) declared the following cash distributions to the Partnership’s common, subordinated and general partner unitholders for the periods presented: (in thousands, except per unit information) Quarters Ended Total Quarterly Distribution Per Unit Total Quarterly Cash Distribution Date of Distribution 2016 March 31 $ 0.2450 $ 14,593 May 13, 2016 June 30 0.2540 15,209 August 12, 2016 September 30 0.2630 15,827 November 14, 2016 December 31 0.2724 18,004 February 14, 2017 2017 March 31 $ 0.2821 $ 18,842 May 15, 2017 June 30 0.2922 19,698 August 14, 2017 See Note 16 for information regarding the distribution that was approved by the Board of Directors with respect to the quarter ended September 30, 2017 . Subordinated Units Our partnership agreement provides that, during the subordination period, the common unitholders will have the right to receive distributions of available cash from operating surplus each quarter in an amount equal to $ 0.2125 per unit, which is defined in our partnership agreement as the minimum quarterly distribution, plus any arrearages in the payment of the minimum quarterly distribution on the common units from prior quarters, before any distributions of available cash from operating surplus may be made on the subordinated units. The practical effect of the subordinated units is to increase the likelihood that, during the subordination period, there will be available cash to be distributed on the common units. The subordination period will end, and the subordinated units will automatically convert to common units, on a one-for-one basis, when certain distribution requirements, as defined in the partnership agreement, have been met. At September 30, 2017, CONSOL and Noble Energy own 29,163,121 subordinated units in the aggregate, which represents all of our subordinated units. See Note 16 for additional information regarding the termination of our subordinated period and conversion of our subordinated units on November 15, 2017. Incentive Distribution Rights Incentive distribution rights ( “ IDRs”) represent the right to receive an increasing percentage, up to a maximum of 48% (which does not include the 2% general partner interest), of quarterly distributions of available cash from operating surplus after the minimum quarterly distribution and the target distribution levels described in the table below have been achieved. All of the IDRs are currently held by our general partner. Our general partner may transfer the IDRs separately from its general partner interest. See Note 4–Net Income Per Limited Partner Unit for additional details regarding achievement of target distribution levels. |
NET INCOME PER LIMITED PARTNER
NET INCOME PER LIMITED PARTNER UNIT | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
NET INCOME PER LIMITED PARTNER UNIT | NET INCOME PER LIMITED PARTNER UNIT We allocate net income between our general partner and limited partners using the two-class method, under which we allocate net income to our limited partners, our general partner and the holders of our IDRs in accordance with the terms of our partnership agreement. We also allocate any earnings in excess of distributions to our limited partners, our general partner and the holders of the IDRs in accordance with the terms of our partnership agreement. We allocate any distributions in excess of earnings for the period to our general partner and our limited partners based on their respective proportionate ownership interests in us, after taking into account distributions to be paid with respect to the IDRs, as set forth in our partnership agreement. Percentage Allocations of Available Cash from Operating Surplus The following table illustrates the percentage allocations of available cash from operating surplus between the unitholders and our general partner based on the specified target distribution levels. The amounts set forth under “Marginal Percentage Interest in Distributions” are the percentage interests of our general partner, as holder of our IDRs, and the unitholders in any available cash from operating surplus we distribute up to and including the corresponding amount in the column “Total Quarterly Distribution Per Unit Target Amount.” The percentage interests shown for our unitholders and our general partner for the minimum quarterly distribution are also applicable to quarterly distribution amounts that are less than the minimum quarterly distribution. The percentage interests set forth below for our general partner include its 2% general partner interest and assume that our general partner has contributed any additional capital necessary to maintain its 2% general partner interest, our general partner has not transferred its incentive distribution rights and that there are no arrearages on common units. Marginal Percentage Interest in Distributions Distribution Targets Total Quarterly Distribution Per Unit Target Amount Unitholders General Partner (including IDRs) Minimum Quarterly Distribution $0.2125 98% 2% First Target Distribution Above $0.2125 up to $0.24438 98% 2% Second Target Distribution Above $0.24438 up to $0.26563 85% 15% Third Target Distribution Above $0.26563 up to $0.31875 75% 25% Thereafter Above $0.31875 50% 50% The Second and Third Target Distributions were reached for the cash flow quarters ended March 31, 2016 and December 31, 2016, respectively, which were paid within 45 days following the ends of these quarters. All quarterly distributions prior to March 31, 2016 were paid in accordance with the First Target Distribution. Historical earnings per unit The Partnership calculates historical earnings per unit under the two-class method and allocates the earnings or losses of a transferred business before the date of a dropdown transaction entirely to the general partner. If applicable, the previously reported earnings per unit of the limited partners would not change as a result of a dropdown transaction. Diluted net income per limited partner unit reflects the potential dilution that could occur if securities or agreements to issue common units, such as awards under the long-term incentive plan, were exercised, settled or converted into common units. When it is determined that potential common units resulting from an award subject to performance or market conditions should be included in the diluted net income per limited partner unit calculation, the impact is calculated by applying the treasury stock method. There were 46,976 phantom units that were not included in the calculation for the three months ended September 30, 2017 because the effect would have been antidilutive. There were also 53,650 and 13,968 phantom units that were not included in the calculation for the nine months ended September 30, 2017 and 2016 , respectively, because the effect would have been antidilutive. The following table illustrates the Partnership’s calculation of net income per unit for common and subordinated partner units: Three Months Ended September 30, Nine Months Ended (in thousands, except per unit information) 2017 2016 2017 2016 Net Income Attributable to General and Limited Partner Ownership Interest in CONE Midstream Partners LP $ 28,914 $ 23,631 $ 87,972 $ 71,637 Less: General partner interest in net income, including incentive distribution rights 1,504 473 3,938 1,433 Limited partner interest in net income $ 27,410 $ 23,158 $ 84,034 $ 70,204 Net income allocable to common units — Basic and Diluted $ 14,840 $ 11,582 $ 45,492 $ 35,112 Net income allocable to subordinated units — Basic and Diluted 12,570 11,576 38,542 35,092 Limited partner interest in net income — Basic and Diluted $ 27,410 $ 23,158 $ 84,034 $ 70,204 Weighted average limited partner units outstanding — Basic Common units 34,425 29,180 34,417 29,180 Subordinated units 29,163 29,163 29,163 29,163 Total 63,588 58,343 63,580 58,343 Weighted average limited partner units outstanding — Diluted Common units 34,482 29,268 34,468 29,247 Subordinated units 29,163 29,163 29,163 29,163 Total 63,645 58,431 63,631 58,410 Net income per limited partner unit — Basic Common units $ 0.43 $ 0.40 $ 1.32 $ 1.20 Subordinated units 0.43 0.40 1.32 1.20 Total $ 0.43 $ 0.40 $ 1.32 $ 1.20 Net income per limited partner unit — Diluted Common units $ 0.43 $ 0.40 $ 1.32 $ 1.20 Subordinated units 0.43 0.40 1.32 1.20 Total $ 0.43 $ 0.40 $ 1.32 $ 1.20 |
RELATED PARTY
RELATED PARTY | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY | RELATED PARTY In the ordinary course of business, we have transactions with CONSOL (and certain of its subsidiaries), Noble Energy, and CONE Gathering which constitute related party transactions. During the nine months ended September 30, 2017, the Partnership sold property and equipment to CONSOL with a carrying value of $17.4 million for $14.0 million in cash proceeds. The resulting loss of $3.4 million was recorded as a loss on asset sales in the accompanying consolidated statement of operations, within the Additional Systems segment. In addition, CONE Gathering contributed assets with a carrying value of $5.0 million to the Partnership's Anchor Systems in the current year period. Sponsor-related charges within operating expense and general and administrative expense – related party consisted of the following: Three Months Ended Nine Months Ended (in thousands) 2017 2016 2017 2016 Operational services — CONSOL $ 4,255 $ 2,856 $ 10,442 $ 10,010 Electrical compression 2,069 4,353 10,599 12,621 Total Operating Expense — Related Party $ 6,324 $ 7,209 $ 21,041 $ 22,631 CONSOL $ 2,580 $ 2,462 $ 7,926 $ 6,031 Noble Energy 133 162 438 490 Total General and Administrative Expense — Related Party $ 2,713 $ 2,624 $ 8,364 $ 6,521 In addition to the aforementioned transactions, throughout the nine months ended September 30, 2017 and 2016, the Sponsors, through their ownership of CONE Gathering, regularly reimbursed the Partnership for capital expenditures, initially funded by the Partnership, in proportion to CONE Gathering's noncontrolling ownership interests in the Anchor, Growth and Additional Systems. We also distributed to the Sponsors amounts related to their noncontrolling ownership interest in the earnings of the Anchor, Growth and Additional Systems as well as proceeds from sales of any assets in which the Sponsors have ownership interests through their membership in CONE Gathering. This activity is recorded in the caption “Contributions from (distributions to) general partner and noncontrolling interest holders, net” in the consolidated statements of partners' capital and noncontrolling interest and of cash flows. Operational Services Agreement Concurrent with the closing of the IPO, we entered into an operational services agreement with CONSOL. On December 1, 2016, in connection with the consummation of our Sponsors' Exchange Agreement, pursuant to which CONSOL and Noble Energy separated their Marcellus Shale area of mutual interest into two separate operating areas (the “ Exchange Agreement”), the operational services agreement was amended and restated. Under the amended and restated operating agreement, CONSOL continues to provide certain operational services to us in support of our gathering pipelines and dehydration, treating and compressor stations and facilities, including routine and emergency maintenance and repair services, routine operational activities, routine administrative services, construction and related services and such other services as we and CONSOL may mutually agree upon from time to time. CONSOL prepares and submits for our approval a maintenance, operating and capital budget on an annual basis. CONSOL submits actual expenditures for reimbursement on a monthly basis, and we reimburse CONSOL for any direct third-party costs incurred by CONSOL in providing these services. Omnibus Agreement Concurrent with the closing of the IPO, we entered into an omnibus agreement with CONSOL, Noble Energy, CONE Gathering and our general partner that addresses the following matters: • our payment of an annually-determined administrative support fee, which will total $0.9 million for the year ending December 31, 2017, for the provision of certain services by CONSOL and its affiliates; • our payment of an annually-determined administrative support fee, which will total $0.7 million for the year ending December 31, 2017, for the provision of certain executive services by CONSOL and its affiliates; • our payment of an annually-determined administrative support fee, which will total $0.3 million for the year ending December 31, 2017, for the provision of certain executive services by Noble Energy and its affiliates; • our obligation to reimburse our Sponsors for all other direct or allocated costs and expenses incurred by our Sponsors in providing general and administrative services (which reimbursement is in addition to certain expenses of our general partner and its affiliates that are reimbursed under our partnership agreement); • our right of first offer to acquire (i) CONE Gathering’s retained interests in each of our Anchor Systems, Growth Systems and Additional Systems, (ii) CONE Gathering’s other ancillary midstream assets and (iii) any additional midstream assets that CONE Gathering develops; and • an indemnity from CONE Gathering for liabilities associated with the use, ownership or operation of our assets, including environmental liabilities, to the extent relating to the period of time prior to the closing of the IPO; and our obligation to indemnify CONE Gathering for events and conditions associated with the use, ownership or operation of our assets that occur after the closing of the IPO, including environmental liabilities. So long as CONE Gathering controls our general partner, the omnibus agreement will remain in full force and effect. If CONE Gathering ceases to control our general partner, either party may terminate the omnibus agreement, provided that the indemnification obligations will remain in full force and effect in accordance with their terms. Gathering Agreements Upon consummation of the Exchange Agreement, we entered into new fixed-fee gathering agreements with each of CNX Gas Company LLC, a wholly owned subsidiary of CONSOL ( “ CNX Gas”), and Noble Energy that replaced the gathering agreements that had been in place since the IPO. In addition to incorporating changes related to the termination of CONSOL and Noble Energy's upstream joint venture and Joint Development Agreement, the new gathering agreements were designed to provide more clarity on each of CONSOL and Noble Energy's acreage dedications to the Partnership and related releases and to allow each of CONSOL and Noble Energy to independently advance their own development programs. The new gathering agreements were also designed to simplify the decision making process relating to the Partnership's ability to gather third party gas. Our gathering agreement with Noble Energy was assigned to HG Energy upon consummation of the Noble Energy Asset Sale. The terms of the agreement remain unchanged following the assignment, except as it relates to HG Energy's inability to, without the Partnership's consent, release dedicated acreage in connection with a transfer of such acreage free of the dedication to us, and exercise other initial shipper rights provided under the gathering agreement. HG Energy is currently not a related party of the Partnership; accordingly, the focus of the following disclosure is on current and historical related party transactions, which do not include transactions with HG Energy. Under the gathering agreements with CNX Gas and Noble Energy (from whom we generated related party revenues through June 28, 2017) , we receive a fee based on the type and scope of the midstream services we provide, summarized as follows: • For the services we provide with respect to natural gas from the Marcellus Shale formation that does not require downstream processing, or dry gas, we receive a fee of $0.42 per MMBtu. • For the services we provide with respect to the natural gas from the Marcellus Shale formation that requires downstream processing, or wet gas, we receive: • a fee of $0.289 per MMBtu in the Moundsville area (Marshall County, West Virginia); • a fee of $0.289 per MMBtu in the Pittsburgh International Airport area; and • a fee of $0.578 per MMBtu for all other areas in the dedication area. • For the services we provide with respect to natural gas from the Utica Shale formation, we receive a weighted average rate of $ 0.28 per MMBtu. • For the condensate services we provide, we receive a fee of $5.25 per barrel ( “ Bbl”) in the Majorsville area and $2.627 per Bbl in the Moundsville area. Each of the foregoing fees will escalate annually by 2.5% on January 1, beginning on January 1, 2018. Notwithstanding the foregoing, from time to time, CNX Gas may request rate reductions under certain circumstances, which are reviewed by the board of directors of our general partner, with oversight, as our board of directors deems necessary, by our conflicts committee. No rate reduction arrangements are currently active. We gather, compress, dehydrate and deliver all of CNX Gas' dedicated natural gas in the Marcellus Shale on a first-priority basis and gather, inject, stabilize and store all of CNX Gas' dedicated condensate on a first-priority basis, with the exception that until December 1, 2018, CNX Gas will receive first-priority service in our Majorsville system with respect to a certain volume of production (revised bi-annually) and any excess production will receive second-priority service. We receive quarterly updates from CNX Gas on their drilling and development operations, which include detailed descriptions of the drilling plans, production details and well locations for the following 24 months and a three to ten year plan that includes more general development plans. In addition, we regularly meet with CNX Gas to discuss our plans to timely construct the necessary facilities to be able to provide midstream services to them on our dedicated acreage. In the event that we do not perform our obligations under a gathering agreement, CNX Gas will be entitled to certain rights and procedural remedies thereunder, including the temporary and/or permanent release from dedication discussed below and indemnification from us. In addition to the natural gas and condensate that is produced from the dedicated acreage, CNX Gas may elect to dedicate to us non-Marcellus Shale properties located in the dedication area in which it has an interest. If it elects to dedicate any such property, then it will propose a fee for the associated midstream services we would provide. So long as the proposed fee generates a rate of return consistent with its existing gathering agreement on both incremental capital and operating expense associated with any expenditures necessary to gather gas from such property, any midstream services that we agree to provide will be on a second priority basis; second only to the first priority basis afforded to CNX Gas on its dedicated production. Throughput that we currently gather from Utica Shale wells operated by CNX Gas is also addressed in its gathering agreement with us. While our gathering agreement with CNX Gas, as an initial shipper under our gas gathering agreement, runs with the land and, subject to the exceptions described therein, is binding upon the transferee of any of our dedicated acreage, the gathering agreement with CNX Gas provides that it may divest 25,000 net acres of its dedicated acreage (plus or minus the net of acreage acquired or divested within the dedicated area since our IPO) free of the dedication to us (the “Acreage Bucket”). The amount of net acreage that may be divested by CNX Gas free of the dedication will be increased by the amount, if any, of the net acreage acquired (or deemed to be acquired) by CNX Gas within the geographic boundaries of the dedication area that will become automatically dedicated to us. For purposes of determining if acreage can be released free and clear of the dedications under our gathering agreement with CNX Gas, the actual net acreage divested or acquired may be adjusted upwards or downwards based on the geographic location of such net acreage, the timing of the respective divestiture or acquisition and certain other conditions set forth in the agreement. During the nine month period ended September 30, 2017, CNX Gas completed several land transactions, involving both developed and undeveloped acreage located primarily in the Anchor and Additional Systems, that impacted our acreage dedication. At November 2, 2017, CNX Gas has approximately 10,000 acres in its Acreage Bucket. The Noble Energy gathering agreement also provided for an Acreage Bucket, as described above. However, this right was unique to Noble Energy, as an initial shipper under its gathering agreement, and was not transferred to HG Energy upon assignment of the gathering agreement. In connection with the Noble Energy Asset Sale, Noble Energy provided notice to the Partnership of its release of approximately 37,000 undeveloped acres, which were primarily within the Growth and Additional Systems and approximated the amount of the Acreage Bucket attributed to Noble Energy at the time of sale. After the Noble Energy Asset Sale, Noble Energy can no longer release acres from dedication. The Partnership is in the process of confirming the dedication status of the acres that were released. There are no restrictions under our gathering agreements on the ability of CNX Gas to transfer acreage in the right of first offer ( “ ROFO”) area, and any such transfer of acreage in the ROFO area will not be subject to our right of first offer. For additional information on the ROFO area, see Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations–How We Evaluate Our Operations–Throughput Volumes. Upon completion of its initial term in 2034, each of our gathering agreements will continue in effect from year to year until such time as the agreement is terminated by either us or the other party to such agreement on or before 180 days prior written notice. |
CONCENTRATION OF CREDIT RISK
CONCENTRATION OF CREDIT RISK | 9 Months Ended |
Sep. 30, 2017 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION OF CREDIT RISK | CONCENTRATION OF CREDIT RISK During the three months ended September 30, 2017, substantially all of our revenues were attributable to our two largest customers, CNX Gas and HG Energy. Prior to the Noble Energy Asset Sale, which was completed on June 28, 2017, all of our revenues since the IPO were attributed to our Sponsors, CNX Gas and Noble Energy. |
RECEIVABLES
RECEIVABLES | 9 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
RECEIVABLES | RECEIVABLES Receivables consisted of the following: (in thousands) September 30, 2017 December 31, 2016 Receivables - related party CONSOL $ 11,733 $ 10,956 Noble Energy — 8,268 CONE Gathering 64 3,210 Receivables - related party $ 11,797 $ 22,434 Receivables - third party 7,759 — Total receivables $ 19,556 $ 22,434 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment consisted of the following: (in thousands) September 30, 2017 December 31, 2016 Estimated Useful Lives in Years Land $ 74,950 $ 72,878 N/A Gathering equipment 657,089 643,422 25 — 40 Compression equipment 172,219 169,681 30 — 40 Processing equipment 30,979 30,979 40 Assets under construction 18,529 13,772 N/A Total Property and Equipment $ 953,766 $ 930,732 Less: Accumulated depreciation Gathering equipment $ 49,206 $ 37,275 Compression equipment 13,799 10,590 Processing equipment 4,927 4,307 Total Accumulated Depreciation $ 67,932 $ 52,172 Property and Equipment, Net $ 885,834 $ 878,560 |
OTHER ASSETS
OTHER ASSETS | 9 Months Ended |
Sep. 30, 2017 | |
Other Assets [Abstract] | |
OTHER ASSETS | OTHER ASSETS Other assets consisted of the following: (in thousands) September 30, 2017 December 31, 2016 Pipe stock $ 392 $ 8,596 Financing fees 163 286 Other 79 79 Total Other Assets $ 634 $ 8,961 During the nine months ended September 30, 2017, the Partnership sold a significant portion of its pipe stock, which was in the Growth Systems, to a third party for approximately $0.5 million below its carrying value, which was recorded as a loss from asset sales in the accompanying consolidated statements of operations. |
ACCOUNTS PAYABLE - RELATED PART
ACCOUNTS PAYABLE - RELATED PARTY | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE - RELATED PARTY | ACCOUNTS PAYABLE — RELATED PARTY Related party payables consisted of the following: (in thousands) September 30, 2017 December 31, 2016 CONSOL: Expense reimbursements $ 935 $ 999 Capital expenditures reimbursements 11 1,148 General and administrative services 1,258 1,964 Operational expenditures reimbursements — 395 Other reimbursements — 1,060 Total due to CONSOL 2,204 5,566 Noble Energy: Capital expenditures reimbursements — 1,105 General and administrative services 44 53 Operational expenditures reimbursements — 401 Other reimbursements — 1,060 Total due to Noble Energy 44 2,619 CONE Gathering LLC: Capital expenditures reimbursement to CONE Gathering LLC — 104 Total due to CONE Gathering LLC — 104 Total Accounts Payable — Related Party $ 2,248 $ 8,289 |
REVOLVING CREDIT FACILITY
REVOLVING CREDIT FACILITY | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
REVOLVING CREDIT FACILITY | REVOLVING CREDIT FACILITY We are party to a credit facility agreement which provides for a $250 million unsecured five year revolving credit facility that matures on September 30, 2019. Our revolving credit facility is available for working capital, capital expenditures, certain acquisitions, distributions, unit repurchases and other lawful partnership purposes. Borrowings under our revolving credit facility bear interest at our option at either: • the base rate, which is defined as the highest of (i) the federal funds rate plus 0.50% ; (ii) JP Morgan’s prime rate; or (iii) the daily LIBOR rate for a one month interest period plus 1.00% ; in each case, plus a margin varying from 0.125% to 1.00% , depending on our most recent consolidated total leverage ratio (as defined in the agreement governing our revolving credit facility) or our credit rating; or • the LIBOR rate plus a margin varying from 1.125% to 2.00% , in each case, depending on our most recent consolidated leverage ratio (as defined in the agreement governing our revolving credit facility) or our credit rating, as the case may be. Interest on base rate loans is payable quarterly. Interest on LIBOR loans is payable on the last day of each interest period or, in the case of interest periods longer than three months, every three months. The unused portion of our revolving credit facility is subject to a commitment fee ranging from 0.15% to 0.35% per annum depending on our most recent consolidated leverage ratio or our credit rating, as the case may be. The outstanding balances and LIBOR interest rates in effect (plus applicable margin) on our revolving credit facility as of the following dates are presented below. September 30, 2017 December 31, 2016 (in thousands, except percentages) Amount Outstanding Interest Rate Amount Outstanding Interest Rate Revolving credit facility $ 157,000 2.75 % $ 167,000 2.26 % Our revolving credit facility agreement also contains covenants and conditions that, among other things, limit (subject to certain exceptions) our ability to incur or guarantee additional debt, make cash distributions (though there will be an exception for distributions permitted under the partnership agreement, subject to certain customary conditions), incur certain liens or permit them to exist, make certain investments and acquisitions, enter into certain types of transactions with affiliates, merge or consolidate with another company, and transfer, sell or otherwise dispose of assets. In addition, the agreement contains other provisions, including circumstances that would result in a change of control, which is defined in the agreement as either CONSOL or Noble Energy failing to each own and control, directly or indirectly, at least 35% of the capital stock of our general partner. A change of control would constitute a default under our revolving credit facility unless waived or amended. Any such waiver or amendment may, among other things, result in a change to existing covenants and conditions based on current credit market conditions and changes in our credit profile as well as incremental costs to the Partnership. We are subject to covenants that require us to maintain certain financial ratios, the most important of which are as follows: • The ratio of (i) consolidated total funded debt (as defined in the agreement governing our revolving credit facility) as of the last day of each fiscal quarter to (ii) consolidated EBITDA (as defined in the agreement governing our revolving credit facility) for the four consecutive fiscal quarters ending on the last day of such fiscal quarter may not exceed (A) at any time other than during a qualified acquisition period (as defined in the agreement governing our revolving credit facility), 5.0 to 1.0 and (B) during a qualified acquisition period, 5.5 to 1.0. This consolidated leverage ratio is calculated as the total amount outstanding on our credit facility divided by EBITDA Attributable to General and Limited Partner Ownership Interest in the CONE Midstream Partners LP. • The ratio of (i) consolidated EBITDA for the four consecutive fiscal quarters ending on the last day of each fiscal quarter to (ii) consolidated interest expense (as defined in the agreement governing our revolving credit facility) for such four consecutive fiscal quarters may not be less than 3.0 to 1.0. This consolidated interest coverage ratio is calculated as EBITDA Attributable to General and Limited Partner Ownership Interest in CONE Midstream Partners LP divided by total interest charges. The Partnership is in compliance with each of the above referenced financial covenants at September 30, 2017 . Accordingly, the Partnership had $93.0 million , the maximum amount of revolving credit, available for borrowing at September 30, 2017 . |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES We may become involved in claims and other legal matters arising in the ordinary course of business. Although claims are inherently unpredictable, we are not aware of any matters that may have a material adverse effect on our business, financial position, results of operations or cash flows. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2017 | |
Leases, Operating [Abstract] | |
LEASES | LEASES We have entered into various non-cancelable operating leases, primarily related to compression facilities. Future minimum lease payments under operating leases as of September 30, 2017 are as follows: (in thousands) Minimum Lease Payments remainder of 2017 $ 1,342 2018 3,080 2019 1,643 2020 945 $ 7,010 Rental expense under operating leases was $1.9 million and $1.8 million for the three months ended September 30, 2017 and 2016 , respectively, and $5.7 million and $5.8 million for nine months ended September 30, 2017 and 2016 , respectively. These expenses are included within operating expense - third party on our consolidated statement of operations. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION Operating segments are the revenue-producing components of a company for which separate financial information is produced internally and is subject to evaluation by the chief operating decision maker in deciding how to allocate resources. The Partnership has three operating segments, which are also its reportable segments - the Anchor Systems, Growth Systems and Additional Systems, each of which does business entirely within the United States of America. See Note 1–Description of Business for details. Segment results for the periods presented were as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2017 2016 2017 2016 Gathering Revenue: Anchor Systems $ 45,729 $ 50,005 $ 142,067 $ 149,150 Growth Systems 1,967 2,587 6,210 8,186 Additional Systems 8,962 8,137 23,873 24,048 Total Gathering Revenue $ 56,658 $ 60,729 $ 172,150 $ 181,384 Net Income (Loss): Anchor Systems $ 28,676 $ 31,159 $ 87,526 $ 95,328 Growth Systems (366 ) 1,112 87 (7,204 ) Additional Systems 5,158 4,110 8,847 10,018 Total Net Income $ 33,468 $ 36,381 $ 96,460 $ 98,142 Depreciation Expense: Anchor Systems $ 3,803 $ 3,620 $ 11,294 $ 10,474 Growth Systems 556 530 1,644 1,590 Additional Systems 1,270 1,242 4,037 3,320 Total Depreciation Expense $ 5,629 $ 5,392 $ 16,975 $ 15,384 Capital Expenditures for Segment Assets: Anchor Systems $ 9,767 $ 4,868 $ 29,916 $ 27,109 Growth Systems 114 465 935 693 Additional Systems 1,609 1,409 4,054 12,664 Total Capital Expenditures $ 11,490 $ 6,742 $ 34,905 $ 40,466 Segment assets as of the dates presented were as follows: (in thousands) September 30, 2017 December 31, 2016 Segment Assets Anchor Systems $ 583,428 $ 571,415 Growth Systems 100,277 98,447 Additional Systems 227,902 248,695 Total Segment Assets $ 911,607 $ 918,557 |
LONG-TERM INCENTIVE PLAN
LONG-TERM INCENTIVE PLAN | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
LONG-TERM INCENTIVE PLAN | LONG-TERM INCENTIVE PLAN Under the CONE Midstream Partners LP 2014 Long-Term Incentive Plan (our “LTIP”), our general partner may issue long-term equity-based awards to directors, officers and employees of the general partner or its affiliates, or to any consultants, affiliates of our general partner or other individuals who perform services on behalf of the Partnership. The Partnership is responsible for the cost of awards granted under the LTIP, which limits the number of units that may be delivered pursuant to vested awards to 5,800,000 common units, subject to proportionate adjustment in the event of unit splits and similar events. Common units subject to awards that are canceled, forfeited, withheld to satisfy tax withholding obligations or otherwise terminated without delivery of the common units will be available for delivery pursuant to other awards. The following table presents phantom unit activity during the nine months ended September 30, 2017: Number of Units Weighted Average Grant Date Fair Value Total awarded and unvested at December 31, 2016 158,117 $ 10.57 Granted 69,976 23.64 Vested (80,004) 11.05 Forfeited (12,082) 18.03 Total awarded and unvested at September 30, 2017 136,007 $ 16.35 The Partnership accounts for phantom units as equity awards and records compensation expense on a straight line basis over the vesting period based on the fair value of the awards at their grant dates. Awards granted to independent directors vest over a period of one year, and awards granted to certain officers and employees of the general partner vest 33% per year over a period of three years. The Partnership recognized $0.2 million of compensation expense for each of the three months ended September 30, 2017 and 2016 and $0.9 million and $0.6 million for the nine months ended September 30, 2017 and 2016 , respectively, which was included in general and administrative expense - related party in the consolidated statements of operations. At September 30, 2017 , the unrecognized compensation related to all outstanding awards was $ 1.4 million , which is expected to vest over the next 28 months. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On October 19, 2017 , the Board of Directors of CONE Midstream GP LLC, the Partnership's general partner, declared a cash distribution to the Partnership’s unitholders with respect to the third quarter of 2017 of $0.3025 per common and subordinated unit. The cash distribution will be paid on November 14, 2017 to unitholders of record at the close of business on November 3, 2017 . On October 19, 2017, the Board of Directors of CONE Midstream GP LLC also confirmed and approved that, upon the payment of the distribution with respect to the quarter ended September 30, 2017, the financial tests required for conversion of the Partnership’s subordinated units will be met. Accordingly, the subordination period with respect to the Partnership’s subordinated units is expected to expire on November 15, 2017, and all of the 29,163,121 outstanding subordinated units will automatically convert into common units on a one -for-one basis on that day. |
SIGNIFICANT ACCOUNTING POLICI23
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Accounting | The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ( “ GAAP”). |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and various disclosures. Actual results could differ from those estimates, which are evaluated on an ongoing basis, utilizing historical experience and other methods considered reasonable under the particular circumstances. Although these estimates are based on management’s best available knowledge at the time, changes in facts and circumstances or discovery of new facts or circumstances may result in revised estimates and actual results may differ from these estimates. Effects on the Partnership’s business, financial position and results of operations resulting from revisions to estimates are recognized when the facts that give rise to the revision become known. |
Principles of Consolidation | The consolidated financial statements include the accounts of the Partnership and all of its controlled subsidiaries, including 100% of each of the Anchor Systems, Growth Systems and Additional Systems. Although the Partnership has less than a 100% economic interest in the Growth and Additional Systems, each are consolidated fully with the results of the Partnership. However, after adjusting for noncontrolling interests, net income attributable to general and limited partner ownership interests in the Partnership reflects only that portion of net income that is attributable to the Partnership's unitholders. As a result of the Anchor Systems Acquisition, net income attributable to general and limited partner ownership interests in the Partnership includes 100% of the results of the Anchor Systems during the nine months ended September 30, 2017. Transactions between the Partnership and its Sponsors have been identified in the consolidated financial statements as transactions between related parties and are discussed in Note 5. |
Revenue Recognition | Our revenues primarily consist of fees, which we charge on a per unit basis, for gathering natural gas that was produced by our shippers. We recognize revenue when services have been rendered, the prices are fixed or determinable, and collectibility is reasonably assured. The fees we charge CONSOL and the fees we charged Noble Energy, prior to consummation of the Noble Energy Asset Sale are recorded in gathering revenue — related party in our consolidated statements of operations. Following consummation of the Noble Energy Asset Sale, fees from midstream services we perform for HG Energy and any other third party shipper are recorded in gathering revenue — third party in our consolidated statements of operations. |
Cash | Cash includes cash on hand and on deposit at banking institutions. |
Receivables | Receivables are recorded at the invoiced amount and do not bear interest. When applicable, we reserve for specific accounts receivable when it is probable that all or a part of an outstanding balance will not be collected. Collectibility is determined based on terms of sale, credit status of customers and various other circumstances. We regularly review collectibility and establish or adjust the allowance as necessary using the specific identification method. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. |
Fair Value Measurement | The Financial Accounting Standards Board (the “FASB”) ASC Topic 820, Fair Value Measurements and Disclosures, clarifies the definition of fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. This guidance also relates to all nonfinancial assets and liabilities that are not recognized or disclosed on a recurring basis (e.g., the initial recognition of asset retirement obligations and impairments of long‑lived assets). The fair value is the price that we estimate we would receive upon selling an asset or that we would pay to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy is used to prioritize input to valuation techniques used to estimate fair value. An asset or liability subject to the fair value requirements is categorized within the hierarchy based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The highest priority (Level 1) is given to unadjusted quoted market prices in active markets for identical assets or liabilities, and the lowest priority (Level 3) is given to unobservable inputs. Level 2 inputs are data, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly. The carrying values on our balance sheet of our current assets and liabilities approximate fair values due to their short maturities. The carrying value of our revolving credit facility approximates fair value as the facility bears interest at a variable, market rate that resets periodically. |
Property and Equipment | Property and equipment is recorded at cost upon acquisition and is depreciated on a straight-line basis over the assets' estimated useful lives or over their lease terms. Expenditures which extend the useful lives of existing property and equipment are capitalized. When properties are retired or otherwise disposed, the related cost and accumulated depreciation are removed from the respective accounts and any profit or loss on disposition is recognized as a gain or loss. We routinely assess whether impairment indicators arise during any given quarter and have processes in place to ensure that we become aware of such indicators. Impairment indicators include, but are not limited to, sustained decreases in commodity prices, a decline in customer well results and lower throughput forecasts, and increases in construction or operating costs. For such long-lived assets, impairment exists when the carrying amount of an asset or group of assets exceeds our estimates of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or group of assets. If the carrying amount of the long-lived asset(s) is not recoverable, based on the estimated future undiscounted cash flows, the impairment loss would be measured as the excess of the asset’s carrying amount over its estimated fair value. In the event that impairment indicators exist, we conduct an impairment test. Fair value represents the estimated price between market participants to sell an asset in the principal or most advantageous market for the asset, based on assumptions a market participant would make. When warranted, management assesses the fair value of long-lived assets using commonly accepted techniques and may use more than one source in making such assessments. Sources used to determine fair value include, but are not limited to, recent third-party comparable sales, internally developed discounted cash flow analyses and analyses from outside advisors. Significant changes, such as the condition of an asset or management’s intent to utilize the asset, generally require management to reassess the cash flows related to long-lived assets. No property and equipment impairments were identified during the periods presented in the accompanying consolidated financial statements. |
Environmental Matters | We are subject to various federal, state and local laws and regulations relating to the protection of the environment. Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations, and do not contribute to current or future revenue generation, are expensed. Liabilities are recorded when environmental assessments and/or clean-ups are probable, and the costs can be reasonably estimated. At this time, we are unable to assess the timing and/or effect of potential liabilities related to greenhouse gas emissions or other environmental issues. |
Asset Retirement Obligations | Our gathering pipelines and compressor stations have an indeterminate life. If properly maintained, they will operate for an indeterminate period as long as supply and demand for natural gas exists, which we expect for the foreseeable future. Accordingly, any retirement obligations associated with such assets cannot be estimated. A liability for asset retirement obligations will be recorded only if and when a future retirement obligation with a determinable life exists and can be estimated. |
Variable Interest Entities | Each of the Anchor, Growth and Additional Systems (the “ Limited Partnerships”) is also a limited partnership and a variable interest entity ( “ VIE”). These VIEs correspond with the manner in which we report our segment information in Note 14–Segment Information, which also includes information regarding the Partnership's involvement with each of these VIEs and their relative contributions to our financial position, operating results and cash flows. The Partnership fully consolidates each of the Limited Partnerships through its ownership of CONE Midstream Operating Company LLC (the “ Operating Company”). The Operating Company, through its general partner ownership interest in each of the Limited Partnerships, is considered to be the primary beneficiary for accounting purposes and has the power to direct all substantive strategic and day-to-day operational decisions of the Limited Partnerships. |
Equity Compensation | Equity compensation expense for all unit-based compensation awards is based on the grant date fair value estimated in accordance with the provisions of the Stock Compensation Topic of the FASB Accounting Standards Codification. We recognize unit-based compensation costs on a straight-line basis over the requisite service period of an award, which is generally the same as the award's vesting term. |
Income Taxes | We are treated as a partnership for federal and state income tax purposes, with each partner being separately taxed on its share of the Partnership's taxable income. Accordingly, no provision for federal or state income taxes has been recorded in the Partnership's consolidated financial statements for any period presented in the accompanying consolidated financial statements. |
Recent Accounting Pronouncements | In May 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-09–Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting. ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The updated guidance is effective for interim and annual periods beginning after December 15, 2017, and early adoption is permitted. We do not believe the updated requirements will materially impact our consolidated financial statements. In January 2017, the FASB issued ASU 2017-01–Business Combinations (Topic 805): Clarifying the Definition of a Business, which changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. The updated guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets is not a business. ASU 2017-01 is effective for annual reporting periods beginning after December 31, 2017 and interim periods therein. The Partnership does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. In December 2016, the FASB issued ASU 2016-19–Technical Corrections and Improvements, which covers a wide range of Topics in the ASC. The amendments in this ASU represent changes to clarify, correct errors, or make minor improvements to the ASC, making it easier to understand and apply by eliminating inconsistencies and providing clarifications. The amendments generally fall into one of the following categories: amendments related to differences between original guidance and the ASC, guidance clarification and reference corrections, simplification, or minor improvements. Most of the amendments in ASU 2016-19 do not require transition guidance and are effective immediately. In August 2016, the FASB issued ASU 2016-15–Classification of Certain Cash Receipts and Cash Payments (Topic 230). ASU 2016-15 addresses the existing diversity in practice of how several specific cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows. ASU 2016-15 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2017. The Partnership does not expect the adoption of this guidance will have a material impact on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02–Leases (Topic 842), which is intended to improve financial reporting about leasing transactions. The ASU will require organizations (“lessees”) that lease assets with terms of more than 12 months to recognize the assets and liabilities for the rights and obligations created by those leases on the balance sheet. Organizations that own the assets leased by lessees (“lessors”) will remain largely unchanged from current GAAP. In addition, the ASU will require disclosures to help investors and other financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. The effective date of this ASU is for fiscal years beginning after December 31, 2018 and interim periods within that year. We are currently evaluating the impact that this standard will have on our financial statements and financial covenants with lenders; however, we do not believe this standard will materially adversely impact our existing credit agreements. In May 2014, the FASB issued ASU 2014-09–Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. The objective of the amendments in this update is to improve financial reporting by creating common revenue recognition guidance under both U.S. GAAP and International Financial Reporting Standards ( “ IFRS”). 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 and should disclose sufficient information, both qualitative and quantitative, to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The following updates to Topic 606 were made during 2016: • In March 2016, the FASB updated Topic 606 by issuing ASU 2016-08–Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarifies how an entity determines whether it is a principal or an agent for goods or services promised to a customer as well as the nature of the goods or services promised to their customers. • In April 2016, the FASB issued ASU 2016-10–Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which seeks to address implementation issues in the areas of identifying performance obligations and licensing. • In May 2016, the FASB issued ASU 2016-12–Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients. The update, which was issued in response to feedback received by the FASB-IASB joint revenue recognition transition resource group, seeks to address implementation issues in the areas of collectibility, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition. After considering the FASB's issuance of a standard that delayed application of Topic 606 by one year, the new standards are effective for annual reporting periods beginning after December 15, 2017. We expect to adopt Topic 606 using the modified retrospective method of adoption on January 1, 2018 and anticipate that this standard will not have a material impact on net income. We continue to evaluate the impact of the standard on related disclosures. |
PARTNERSHIP EQUITY AND DISTRI24
PARTNERSHIP EQUITY AND DISTRIBUTIONS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Cash Distributions | The Board of Directors of the Partnership’s general partner (the “Board of Directors ”) declared the following cash distributions to the Partnership’s common, subordinated and general partner unitholders for the periods presented: (in thousands, except per unit information) Quarters Ended Total Quarterly Distribution Per Unit Total Quarterly Cash Distribution Date of Distribution 2016 March 31 $ 0.2450 $ 14,593 May 13, 2016 June 30 0.2540 15,209 August 12, 2016 September 30 0.2630 15,827 November 14, 2016 December 31 0.2724 18,004 February 14, 2017 2017 March 31 $ 0.2821 $ 18,842 May 15, 2017 June 30 0.2922 19,698 August 14, 2017 |
NET INCOME PER LIMITED PARTNE25
NET INCOME PER LIMITED PARTNER UNIT (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Target Distributions | The percentage interests set forth below for our general partner include its 2% general partner interest and assume that our general partner has contributed any additional capital necessary to maintain its 2% general partner interest, our general partner has not transferred its incentive distribution rights and that there are no arrearages on common units. Marginal Percentage Interest in Distributions Distribution Targets Total Quarterly Distribution Per Unit Target Amount Unitholders General Partner (including IDRs) Minimum Quarterly Distribution $0.2125 98% 2% First Target Distribution Above $0.2125 up to $0.24438 98% 2% Second Target Distribution Above $0.24438 up to $0.26563 85% 15% Third Target Distribution Above $0.26563 up to $0.31875 75% 25% Thereafter Above $0.31875 50% 50% |
Schedule of Net Income (Loss) Per Unit | The following table illustrates the Partnership’s calculation of net income per unit for common and subordinated partner units: Three Months Ended September 30, Nine Months Ended (in thousands, except per unit information) 2017 2016 2017 2016 Net Income Attributable to General and Limited Partner Ownership Interest in CONE Midstream Partners LP $ 28,914 $ 23,631 $ 87,972 $ 71,637 Less: General partner interest in net income, including incentive distribution rights 1,504 473 3,938 1,433 Limited partner interest in net income $ 27,410 $ 23,158 $ 84,034 $ 70,204 Net income allocable to common units — Basic and Diluted $ 14,840 $ 11,582 $ 45,492 $ 35,112 Net income allocable to subordinated units — Basic and Diluted 12,570 11,576 38,542 35,092 Limited partner interest in net income — Basic and Diluted $ 27,410 $ 23,158 $ 84,034 $ 70,204 Weighted average limited partner units outstanding — Basic Common units 34,425 29,180 34,417 29,180 Subordinated units 29,163 29,163 29,163 29,163 Total 63,588 58,343 63,580 58,343 Weighted average limited partner units outstanding — Diluted Common units 34,482 29,268 34,468 29,247 Subordinated units 29,163 29,163 29,163 29,163 Total 63,645 58,431 63,631 58,410 Net income per limited partner unit — Basic Common units $ 0.43 $ 0.40 $ 1.32 $ 1.20 Subordinated units 0.43 0.40 1.32 1.20 Total $ 0.43 $ 0.40 $ 1.32 $ 1.20 Net income per limited partner unit — Diluted Common units $ 0.43 $ 0.40 $ 1.32 $ 1.20 Subordinated units 0.43 0.40 1.32 1.20 Total $ 0.43 $ 0.40 $ 1.32 $ 1.20 |
RELATED PARTY (Tables)
RELATED PARTY (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Sponsor-related charges within operating expense and general and administrative expense – related party consisted of the following: Three Months Ended Nine Months Ended (in thousands) 2017 2016 2017 2016 Operational services — CONSOL $ 4,255 $ 2,856 $ 10,442 $ 10,010 Electrical compression 2,069 4,353 10,599 12,621 Total Operating Expense — Related Party $ 6,324 $ 7,209 $ 21,041 $ 22,631 CONSOL $ 2,580 $ 2,462 $ 7,926 $ 6,031 Noble Energy 133 162 438 490 Total General and Administrative Expense — Related Party $ 2,713 $ 2,624 $ 8,364 $ 6,521 |
RECEIVABLES (Tables)
RECEIVABLES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
Schedule of Receivables | Receivables consisted of the following: (in thousands) September 30, 2017 December 31, 2016 Receivables - related party CONSOL $ 11,733 $ 10,956 Noble Energy — 8,268 CONE Gathering 64 3,210 Receivables - related party $ 11,797 $ 22,434 Receivables - third party 7,759 — Total receivables $ 19,556 $ 22,434 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment consisted of the following: (in thousands) September 30, 2017 December 31, 2016 Estimated Useful Lives in Years Land $ 74,950 $ 72,878 N/A Gathering equipment 657,089 643,422 25 — 40 Compression equipment 172,219 169,681 30 — 40 Processing equipment 30,979 30,979 40 Assets under construction 18,529 13,772 N/A Total Property and Equipment $ 953,766 $ 930,732 Less: Accumulated depreciation Gathering equipment $ 49,206 $ 37,275 Compression equipment 13,799 10,590 Processing equipment 4,927 4,307 Total Accumulated Depreciation $ 67,932 $ 52,172 Property and Equipment, Net $ 885,834 $ 878,560 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Other Assets [Abstract] | |
Schedule of Other Assets | Other assets consisted of the following: (in thousands) September 30, 2017 December 31, 2016 Pipe stock $ 392 $ 8,596 Financing fees 163 286 Other 79 79 Total Other Assets $ 634 $ 8,961 |
ACCOUNTS PAYABLE - RELATED PA30
ACCOUNTS PAYABLE - RELATED PARTY (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Related Party Payables | Related party payables consisted of the following: (in thousands) September 30, 2017 December 31, 2016 CONSOL: Expense reimbursements $ 935 $ 999 Capital expenditures reimbursements 11 1,148 General and administrative services 1,258 1,964 Operational expenditures reimbursements — 395 Other reimbursements — 1,060 Total due to CONSOL 2,204 5,566 Noble Energy: Capital expenditures reimbursements — 1,105 General and administrative services 44 53 Operational expenditures reimbursements — 401 Other reimbursements — 1,060 Total due to Noble Energy 44 2,619 CONE Gathering LLC: Capital expenditures reimbursement to CONE Gathering LLC — 104 Total due to CONE Gathering LLC — 104 Total Accounts Payable — Related Party $ 2,248 $ 8,289 |
REVOLVING CREDIT FACILITY (Tabl
REVOLVING CREDIT FACILITY (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Line of Credit Facilities | The outstanding balances and LIBOR interest rates in effect (plus applicable margin) on our revolving credit facility as of the following dates are presented below. September 30, 2017 December 31, 2016 (in thousands, except percentages) Amount Outstanding Interest Rate Amount Outstanding Interest Rate Revolving credit facility $ 157,000 2.75 % $ 167,000 2.26 % |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Leases, Operating [Abstract] | |
Future minimum lease payments | Future minimum lease payments under operating leases as of September 30, 2017 are as follows: (in thousands) Minimum Lease Payments remainder of 2017 $ 1,342 2018 3,080 2019 1,643 2020 945 $ 7,010 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Operating Revenues and Income from Operations | Segment results for the periods presented were as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2017 2016 2017 2016 Gathering Revenue: Anchor Systems $ 45,729 $ 50,005 $ 142,067 $ 149,150 Growth Systems 1,967 2,587 6,210 8,186 Additional Systems 8,962 8,137 23,873 24,048 Total Gathering Revenue $ 56,658 $ 60,729 $ 172,150 $ 181,384 Net Income (Loss): Anchor Systems $ 28,676 $ 31,159 $ 87,526 $ 95,328 Growth Systems (366 ) 1,112 87 (7,204 ) Additional Systems 5,158 4,110 8,847 10,018 Total Net Income $ 33,468 $ 36,381 $ 96,460 $ 98,142 Depreciation Expense: Anchor Systems $ 3,803 $ 3,620 $ 11,294 $ 10,474 Growth Systems 556 530 1,644 1,590 Additional Systems 1,270 1,242 4,037 3,320 Total Depreciation Expense $ 5,629 $ 5,392 $ 16,975 $ 15,384 Capital Expenditures for Segment Assets: Anchor Systems $ 9,767 $ 4,868 $ 29,916 $ 27,109 Growth Systems 114 465 935 693 Additional Systems 1,609 1,409 4,054 12,664 Total Capital Expenditures $ 11,490 $ 6,742 $ 34,905 $ 40,466 |
Reconciliation of Assets from Segment to Consolidated | Segment assets as of the dates presented were as follows: (in thousands) September 30, 2017 December 31, 2016 Segment Assets Anchor Systems $ 583,428 $ 571,415 Growth Systems 100,277 98,447 Additional Systems 227,902 248,695 Total Segment Assets $ 911,607 $ 918,557 |
LONG-TERM INCENTIVE PLAN (Table
LONG-TERM INCENTIVE PLAN (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Nonvested Performance-based Units Activity | The following table presents phantom unit activity during the nine months ended September 30, 2017: Number of Units Weighted Average Grant Date Fair Value Total awarded and unvested at December 31, 2016 158,117 $ 10.57 Granted 69,976 23.64 Vested (80,004) 11.05 Forfeited (12,082) 18.03 Total awarded and unvested at September 30, 2017 136,007 $ 16.35 |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details) a in Thousands | Jun. 28, 2017a | Sep. 30, 2017segment | May 18, 2017shares | Dec. 31, 2016 | Nov. 16, 2016 | Sep. 30, 2014 |
Schedule of Equity Method Investments [Line Items] | ||||||
Number of operating segments | segment | 3 | |||||
Growth Systems | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage (as a percent) | 5.00% | |||||
Ownership percentage after all transactions | 5.00% | 5.00% | ||||
Growth Systems | CONE Gathering | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Noncontrolling interest, percent | 95.00% | |||||
Additional Systems | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage (as a percent) | 5.00% | |||||
Ownership percentage after all transactions | 5.00% | 5.00% | ||||
Additional Systems | CONE Gathering | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Noncontrolling interest, percent | 95.00% | |||||
Anchor Systems | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage (as a percent) | 75.00% | |||||
Anchor Systems | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Limited partner controlling interest acquired, percentage | 25.00% | |||||
Ownership percentage after all transactions | 100.00% | 100.00% | ||||
Noble Energy | Growth and Additional Systems | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Acres divested (in acres) | a | 37 | |||||
CONE Gathering | Noble Energy | Wheeling Creek | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Membership interest to be sold | 50.00% | |||||
CONE Gathering | Noble Energy | Common Units | Wheeling Creek | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Units to be sold (in units) | 7,110,638 | |||||
CONE Gathering | Noble Energy | Subordinated Units | Wheeling Creek | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Units to be sold (in units) | 14,581,560 |
SIGNIFICANT ACCOUNTING POLICI36
SIGNIFICANT ACCOUNTING POLICIES - ADDITIONAL INFORMATION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Schedule of Target Distributions [Line Items] | |||||
Reserves for uncollectible amounts | $ 0 | $ 0 | $ 0 | ||
Property and equipment impairments | 0 | $ 0 | 0 | $ 0 | |
Asset retirement obligation | 0 | 0 | $ 0 | ||
Provision for federal or state income taxes | $ 0 | $ 0 | $ 0 | $ 0 |
PARTNERSHIP EQUITY AND DISTRI37
PARTNERSHIP EQUITY AND DISTRIBUTIONS (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 14, 2017 | May 15, 2017 | Feb. 14, 2017 | Nov. 14, 2016 | Aug. 12, 2016 | May 13, 2016 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 |
Distribution Made to Limited Partner [Line Items] | |||||||||||||
Period to distribute available cash (in days) | 45 days | ||||||||||||
Total Quarterly Distribution Per Unit (in dollars per share) | $ 0.2922 | $ 0.2821 | $ 0.2724 | $ 0.2630 | $ 0.2540 | $ 0.245 | |||||||
Total Quarterly Cash Distribution | $ 19,698 | $ 18,842 | $ 18,004 | $ 15,827 | $ 15,209 | $ 14,593 | $ 56,544 | ||||||
Intended quarterly distribution to limited partner (in dollars per unit) | $ 0.2125 | ||||||||||||
General partner's ownership interest (as a percent) | 2.00% | ||||||||||||
Maximum | |||||||||||||
Distribution Made to Limited Partner [Line Items] | |||||||||||||
Incentive distribution, rate (as a percent) | 48.00% | ||||||||||||
Subordinated Units | |||||||||||||
Distribution Made to Limited Partner [Line Items] | |||||||||||||
Units outstanding (in shares) | 29,163,121 | 29,163,121 |
NET INCOME PER LIMITED PARTNE38
NET INCOME PER LIMITED PARTNER UNIT - Percentage Allocations of Available Cash from Operating Surplus (Details) | 9 Months Ended |
Sep. 30, 2017$ / shares | |
Schedule of Target Distributions [Line Items] | |
General partner's ownership interest (as a percent) | 2.00% |
Intended quarterly distribution to limited partner (in dollars per unit) | $ 0.2125 |
Period to distribute available cash (in days) | 45 days |
Minimum Quarterly Distribution | |
Schedule of Target Distributions [Line Items] | |
Marginal percentage interest in distributions, unitholders (as a percent) | 98.00% |
Marginal percentage interest in distributions, general partner (as a percent) | 2.00% |
First Target Distribution | |
Schedule of Target Distributions [Line Items] | |
Marginal percentage interest in distributions, unitholders (as a percent) | 98.00% |
Marginal percentage interest in distributions, general partner (as a percent) | 2.00% |
Second Target Distribution | |
Schedule of Target Distributions [Line Items] | |
Marginal percentage interest in distributions, unitholders (as a percent) | 85.00% |
Marginal percentage interest in distributions, general partner (as a percent) | 15.00% |
Third Target Distribution | |
Schedule of Target Distributions [Line Items] | |
Marginal percentage interest in distributions, unitholders (as a percent) | 75.00% |
Marginal percentage interest in distributions, general partner (as a percent) | 25.00% |
Thereafter Distributions | |
Schedule of Target Distributions [Line Items] | |
Marginal percentage interest in distributions, unitholders (as a percent) | 50.00% |
Marginal percentage interest in distributions, general partner (as a percent) | 50.00% |
Minimum | First Target Distribution | |
Schedule of Target Distributions [Line Items] | |
Intended quarterly distribution to limited partner (in dollars per unit) | $ 0.2125 |
Minimum | Second Target Distribution | |
Schedule of Target Distributions [Line Items] | |
Intended quarterly distribution to limited partner (in dollars per unit) | 0.24438 |
Minimum | Third Target Distribution | |
Schedule of Target Distributions [Line Items] | |
Intended quarterly distribution to limited partner (in dollars per unit) | 0.26563 |
Minimum | Thereafter Distributions | |
Schedule of Target Distributions [Line Items] | |
Intended quarterly distribution to limited partner (in dollars per unit) | 0.31875 |
Maximum | First Target Distribution | |
Schedule of Target Distributions [Line Items] | |
Intended quarterly distribution to limited partner (in dollars per unit) | 0.24438 |
Maximum | Second Target Distribution | |
Schedule of Target Distributions [Line Items] | |
Intended quarterly distribution to limited partner (in dollars per unit) | 0.26563 |
Maximum | Third Target Distribution | |
Schedule of Target Distributions [Line Items] | |
Intended quarterly distribution to limited partner (in dollars per unit) | $ 0.31875 |
NET INCOME PER LIMITED PARTNE39
NET INCOME PER LIMITED PARTNER UNIT - Historical Earnings Per Unit(Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Limited Partners' Capital Account [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in units) | 46,976 | 53,650 | 13,968 | |
Net Income Attributable to General and Limited Partner Ownership Interest in CONE Midstream Partners LP | $ 28,914 | $ 23,631 | $ 87,972 | $ 71,637 |
Less: General partner interest in net income, including incentive distribution rights | 1,504 | 473 | 3,938 | 1,433 |
Limited partner interest in net income | $ 27,410 | $ 23,158 | $ 84,034 | $ 70,204 |
Weighted average limited partner units outstanding — Basic (in units) | 63,588,000 | 58,343,000 | 63,580,000 | 58,343,000 |
Weighted average limited partner units outstanding — Diluted (in units) | 63,645,000 | 58,431,000 | 63,631,000 | 58,410,000 |
Net income per limited partner unit — Basic (in dollars per unit) | $ 0.43 | $ 0.40 | $ 1.32 | $ 1.20 |
Net income per limited partner unit - Diluted (in dollars per unit) | $ 0.43 | $ 0.40 | $ 1.32 | $ 1.20 |
Common Units | ||||
Limited Partners' Capital Account [Line Items] | ||||
Limited partner interest in net income | $ 14,840 | $ 11,582 | $ 45,492 | $ 35,112 |
Weighted average limited partner units outstanding — Basic (in units) | 34,425,000 | 29,180,000 | 34,417,000 | 29,180,000 |
Weighted average limited partner units outstanding — Diluted (in units) | 34,482,000 | 29,268,000 | 34,468,000 | 29,247,000 |
Net income per limited partner unit — Basic (in dollars per unit) | $ 0.43 | $ 0.40 | $ 1.32 | $ 1.20 |
Net income per limited partner unit - Diluted (in dollars per unit) | $ 0.43 | $ 0.40 | $ 1.32 | $ 1.20 |
Subordinated Units | ||||
Limited Partners' Capital Account [Line Items] | ||||
Limited partner interest in net income | $ 12,570 | $ 11,576 | $ 38,542 | $ 35,092 |
Weighted average limited partner units outstanding — Basic (in units) | 29,163,000 | 29,163,000 | 29,163,000 | 29,163,000 |
Weighted average limited partner units outstanding — Diluted (in units) | 29,163,000 | 29,163,000 | 29,163,000 | 29,163,000 |
Net income per limited partner unit — Basic (in dollars per unit) | $ 0.43 | $ 0.40 | $ 1.32 | $ 1.20 |
Net income per limited partner unit - Diluted (in dollars per unit) | $ 0.43 | $ 0.40 | $ 1.32 | $ 1.20 |
RELATED PARTY (Details)
RELATED PARTY (Details) $ in Thousands | Jun. 28, 2017a | Sep. 30, 2017USD ($)a$ / bbl$ / MMBTU | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)a$ / bbl$ / MMBTU | Sep. 30, 2016USD ($) | Dec. 31, 2018 | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Related Party Transaction [Line Items] | ||||||||
Property and equipment, net | $ 885,834 | $ 885,834 | $ 878,560 | |||||
Noncash contribution of assets held by general partner | $ 5,054 | |||||||
Gas Gathering Agreements | ||||||||
Related Party Transaction [Line Items] | ||||||||
Downstream fees receivable (in dollars per MMBtu) | $ / MMBTU | 0.578 | 0.578 | ||||||
Operational update period plan (in months) | 24 months | |||||||
Termination period (in days) | 180 days | |||||||
Gas Gathering Agreements | Minimum | ||||||||
Related Party Transaction [Line Items] | ||||||||
Term of Agreement (in years) | 3 years | |||||||
Gas Gathering Agreements | Maximum | ||||||||
Related Party Transaction [Line Items] | ||||||||
Term of Agreement (in years) | 10 years | |||||||
CNX Gas may divest up to (in net acres) | a | 25,000 | |||||||
CNX Gas' balance of acreage remaining (in acres) | a | 10,000 | 10,000 | ||||||
Gas Gathering Agreements | Marcellus Shale Formation | ||||||||
Related Party Transaction [Line Items] | ||||||||
Fees receivable, excluding downstream (in dollars per MMBtu) | $ / MMBTU | 0.42 | 0.42 | ||||||
Gas Gathering Agreements | West Virgina | ||||||||
Related Party Transaction [Line Items] | ||||||||
Downstream fees receivable (in dollars per MMBtu) | $ / MMBTU | 0.289 | 0.289 | ||||||
Condensate fees receivable (in dollars per Bbl) | $ / bbl | 2.627 | 2.627 | ||||||
Gas Gathering Agreements | Pennsylvania | ||||||||
Related Party Transaction [Line Items] | ||||||||
Downstream fees receivable (in dollars per MMBtu) | $ / MMBTU | 0.289 | 0.289 | ||||||
Condensate fees receivable (in dollars per Bbl) | $ / bbl | 5.25 | 5.25 | ||||||
Gas Gathering Agreements | Utica Shale Formation | ||||||||
Related Party Transaction [Line Items] | ||||||||
Downstream fees receivable, weighted average (in dollars per MMBtu) | $ / MMBTU | 0.28 | |||||||
Forecast | Gas Gathering Agreements | ||||||||
Related Party Transaction [Line Items] | ||||||||
Conditional fee increase, percent | 2.50% | |||||||
Affiliated Entity | CONSOL | Forecast | Administrative Services | ||||||||
Related Party Transaction [Line Items] | ||||||||
General and administrative expenses | $ 900 | |||||||
Affiliated Entity | CONSOL | Forecast | Executive Administrative Services | ||||||||
Related Party Transaction [Line Items] | ||||||||
General and administrative expenses | 700 | |||||||
Affiliated Entity | CONE Gathering | ||||||||
Related Party Transaction [Line Items] | ||||||||
Noncash contribution of assets held by general partner | $ 5,000 | |||||||
Affiliated Entity | Noble Energy | Forecast | Executive Administrative Services | ||||||||
Related Party Transaction [Line Items] | ||||||||
General and administrative expenses | $ 300 | |||||||
Additional Systems | Affiliated Entity | CONSOL | ||||||||
Related Party Transaction [Line Items] | ||||||||
Property and equipment, net | $ 17,400 | 17,400 | ||||||
Proceeds from sale of assets | 14,000 | |||||||
Loss on asset sales | 3,400 | |||||||
Operating Expense | Affiliated Entity | ||||||||
Related Party Transaction [Line Items] | ||||||||
Operating expense | 6,324 | $ 7,209 | 21,041 | $ 22,631 | ||||
Operating Expense | Affiliated Entity | CONSOL and Noble | Electrically-Powered Compression Reimbursement | ||||||||
Related Party Transaction [Line Items] | ||||||||
Operating expense | 2,069 | 4,353 | 10,599 | 12,621 | ||||
Operating Expense | Affiliated Entity | CONSOL | Shared Service Agreement | ||||||||
Related Party Transaction [Line Items] | ||||||||
Operating expense | 4,255 | 2,856 | 10,442 | 10,010 | ||||
General and administrative services | Affiliated Entity | ||||||||
Related Party Transaction [Line Items] | ||||||||
General and administrative expenses | 2,713 | 2,624 | 8,364 | 6,521 | ||||
General and administrative services | Affiliated Entity | CONSOL | Shared Service Agreement | ||||||||
Related Party Transaction [Line Items] | ||||||||
General and administrative expenses | 2,580 | 2,462 | 7,926 | 6,031 | ||||
General and administrative services | Affiliated Entity | Noble Energy | ||||||||
Related Party Transaction [Line Items] | ||||||||
General and administrative expenses | $ 133 | $ 162 | $ 438 | $ 490 | ||||
Noble Energy | Growth and Additional Systems | ||||||||
Related Party Transaction [Line Items] | ||||||||
Acres divested (in acres) | a | 37,000 |
RECEIVABLES (Details)
RECEIVABLES (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Receivables - related party | $ 11,797 | $ 22,434 |
Receivables - third party | 7,759 | 0 |
Total receivables | 19,556 | 22,434 |
Affiliated Entity | CONSOL | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Receivables - related party | 11,733 | 10,956 |
Affiliated Entity | Noble Energy | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Receivables - related party | 0 | 8,268 |
Affiliated Entity | CONE Gathering | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Receivables - related party | $ 64 | $ 3,210 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | ||
Total Property and Equipment | $ 953,766 | $ 930,732 |
Less — accumulated depreciation | 67,932 | 52,172 |
Property and Equipment, Net | 885,834 | 878,560 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total Property and Equipment | 74,950 | 72,878 |
Gathering equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total Property and Equipment | 657,089 | 643,422 |
Less — accumulated depreciation | $ 49,206 | 37,275 |
Gathering equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 25 years | |
Gathering equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 40 years | |
Compression equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total Property and Equipment | $ 172,219 | 169,681 |
Less — accumulated depreciation | $ 13,799 | 10,590 |
Compression equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 30 years | |
Compression equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 40 years | |
Processing equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total Property and Equipment | $ 30,979 | 30,979 |
Less — accumulated depreciation | $ 4,927 | 4,307 |
Estimated useful life | 40 years | |
Assets under construction | ||
Property, Plant and Equipment [Line Items] | ||
Total Property and Equipment | $ 18,529 | $ 13,772 |
OTHER ASSETS (Details)
OTHER ASSETS (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Other Assets [Abstract] | ||
Pipe stock | $ 392 | $ 8,596 |
Financing fees | 163 | 286 |
Other | 79 | 79 |
Total Other Assets | $ 634 | $ 8,961 |
OTHER ASSETS - NARRATIVE (Detai
OTHER ASSETS - NARRATIVE (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Other Assets [Abstract] | |
Loss on sale of other assets - amount below carrying value | $ 0.5 |
ACCOUNTS PAYABLE - RELATED PA45
ACCOUNTS PAYABLE - RELATED PARTY (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | ||
Total Accounts Payable — Related Party | $ 2,248 | $ 8,289 |
Affiliated Entity | CONSOL | ||
Related Party Transaction [Line Items] | ||
Total Accounts Payable — Related Party | 2,204 | 5,566 |
Affiliated Entity | CONSOL | Expense reimbursements | ||
Related Party Transaction [Line Items] | ||
Total Accounts Payable — Related Party | 935 | 999 |
Affiliated Entity | CONSOL | Capital expenditures reimbursements | ||
Related Party Transaction [Line Items] | ||
Total Accounts Payable — Related Party | 11 | 1,148 |
Affiliated Entity | CONSOL | General and administrative services | ||
Related Party Transaction [Line Items] | ||
Total Accounts Payable — Related Party | 1,258 | 1,964 |
Affiliated Entity | CONSOL | Operational expenditures reimbursements | ||
Related Party Transaction [Line Items] | ||
Total Accounts Payable — Related Party | 0 | 395 |
Affiliated Entity | CONSOL | Other reimbursements | ||
Related Party Transaction [Line Items] | ||
Total Accounts Payable — Related Party | 0 | 1,060 |
Affiliated Entity | Noble Energy | ||
Related Party Transaction [Line Items] | ||
Total Accounts Payable — Related Party | 44 | 2,619 |
Affiliated Entity | Noble Energy | Capital expenditures reimbursements | ||
Related Party Transaction [Line Items] | ||
Total Accounts Payable — Related Party | 0 | 1,105 |
Affiliated Entity | Noble Energy | General and administrative services | ||
Related Party Transaction [Line Items] | ||
Total Accounts Payable — Related Party | 44 | 53 |
Affiliated Entity | Noble Energy | Operational expenditures reimbursements | ||
Related Party Transaction [Line Items] | ||
Total Accounts Payable — Related Party | 0 | 401 |
Affiliated Entity | Noble Energy | Other reimbursements | ||
Related Party Transaction [Line Items] | ||
Total Accounts Payable — Related Party | 0 | 1,060 |
Affiliated Entity | CONE Gathering | ||
Related Party Transaction [Line Items] | ||
Total Accounts Payable — Related Party | 0 | 104 |
Affiliated Entity | CONE Gathering | Capital expenditures reimbursements | ||
Related Party Transaction [Line Items] | ||
Total Accounts Payable — Related Party | $ 0 | $ 104 |
REVOLVING CREDIT FACILITY - ADD
REVOLVING CREDIT FACILITY - ADDITIONAL INFORMATION (Details) - Credit Facility | Sep. 30, 2014USD ($) | Sep. 30, 2017USD ($) |
Debt Instrument [Line Items] | ||
Revolving credit facility | $ 250,000,000 | |
Debt instrument, term | 5 years | |
Debt covenant, consolidated total funded debt to EBITDA ratio measurement period (in years) | 1 year | |
Consolidated total funded debt to EBITDA ratio, outside acquisition period | 5 | |
Debt covenant, funded debt to EBITDA ratio, acquisition period | 5.50 | |
Interest expense ratio | 3 | |
Remaining borrowing capacity | $ 93,000,000 | |
Minimum | ||
Debt Instrument [Line Items] | ||
Commitment fee percentage | 0.15% | |
Maximum | ||
Debt Instrument [Line Items] | ||
Commitment fee percentage | 0.35% | |
Federal Funds Rate | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 0.50% | |
Base Rate, London Interbank Offered Rate (LIBOR) | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.00% | |
LIBOR plus 1% | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 0.125% | |
LIBOR plus 1% | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.00% | |
LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.125% | |
LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.00% |
REVOLVING CREDIT FACILITY - SUM
REVOLVING CREDIT FACILITY - SUMMARY OF REVOLVING CREDIT FACILITY (Details) - Credit Facility - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Line of Credit Facility [Line Items] | ||
Line of credit, outstanding amount | $ 157,000 | $ 167,000 |
Stated interest rate | 2.75% | 2.26% |
LEASES - Future Minimum Lease P
LEASES - Future Minimum Lease Payments (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Leases, Operating [Abstract] | |
remainder of 2017 | $ 1,342 |
2,018 | 3,080 |
2,019 | 1,643 |
2,020 | 945 |
Total future minimum lease payments | $ 7,010 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Leases, Operating [Abstract] | ||||
Rental expense | $ 1.9 | $ 1.8 | $ 5.7 | $ 5.8 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)segment | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Segment Reporting [Abstract] | |||||
Number of operating segments | segment | 3 | ||||
Segment Reporting Information [Line Items] | |||||
Gathering Revenue: | $ 56,658 | $ 60,729 | $ 172,150 | $ 181,384 | |
Net Income (Loss): | 33,468 | 36,381 | 96,460 | 98,142 | |
Depreciation Expense: | 5,629 | 5,392 | 16,975 | 15,384 | |
Capital Expenditures for Segment Assets: | 11,490 | 6,742 | 34,905 | 40,466 | |
Segment Assets | 911,607 | 911,607 | $ 918,557 | ||
Anchor Systems | |||||
Segment Reporting Information [Line Items] | |||||
Gathering Revenue: | 45,729 | 50,005 | 142,067 | 149,150 | |
Net Income (Loss): | 28,676 | 31,159 | 87,526 | 95,328 | |
Depreciation Expense: | 3,803 | 3,620 | 11,294 | 10,474 | |
Capital Expenditures for Segment Assets: | 9,767 | 4,868 | 29,916 | 27,109 | |
Segment Assets | 583,428 | 583,428 | 571,415 | ||
Growth Systems | |||||
Segment Reporting Information [Line Items] | |||||
Gathering Revenue: | 1,967 | 2,587 | 6,210 | 8,186 | |
Net Income (Loss): | (366) | 1,112 | 87 | (7,204) | |
Depreciation Expense: | 556 | 530 | 1,644 | 1,590 | |
Capital Expenditures for Segment Assets: | 114 | 465 | 935 | 693 | |
Segment Assets | 100,277 | 100,277 | 98,447 | ||
Additional Systems | |||||
Segment Reporting Information [Line Items] | |||||
Gathering Revenue: | 8,962 | 8,137 | 23,873 | 24,048 | |
Net Income (Loss): | 5,158 | 4,110 | 8,847 | 10,018 | |
Depreciation Expense: | 1,270 | 1,242 | 4,037 | 3,320 | |
Capital Expenditures for Segment Assets: | 1,609 | $ 1,409 | 4,054 | $ 12,664 | |
Segment Assets | $ 227,902 | $ 227,902 | $ 248,695 |
LONG-TERM INCENTIVE PLAN - Narr
LONG-TERM INCENTIVE PLAN - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 28 months | |||
Unrecognized compensation costs | $ 1.4 | $ 1.4 | ||
Common Units | 2014 LTIP | Stock Compensation Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of common units authorized (in units) | 5,800,000 | 5,800,000 | ||
Common Units | 2014 LTIP | Phantom Share Units (PSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unit based compensation | $ 0.2 | $ 0.2 | $ 0.9 | $ 0.6 |
Employee | 2014 LTIP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 3 years | |||
Annual award vesting percentage | 33.00% | |||
Director | 2014 LTIP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 1 year | |||
Officer | 2014 LTIP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 3 years | |||
Annual award vesting percentage | 33.00% |
LONG-TERM INCENTIVE PLAN - Sche
LONG-TERM INCENTIVE PLAN - Schedule of Nonvested Performance-based Units Activity (Details) - Phantom Share Units (PSUs) | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |
Total awarded and unvested, beginning balance (in shares) | shares | 158,117 |
Granted (in shares) | shares | 69,976 |
Vested (in shares) | shares | (80,004) |
Forfeited (in shares) | shares | (12,082) |
Total awarded and unvested, ending balance (in shares) | shares | 136,007 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Total awarded and unvested, beginning balance (in shares) | $ / shares | $ 10.57 |
Granted (in dollars per share) | $ / shares | 23.64 |
Vested (in dollars per share) | $ / shares | 11.05 |
Forfeited (in dollars per share) | $ / shares | 18.03 |
Total awarded and unvested, ending balance (in shares) | $ / shares | $ 16.35 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - $ / shares | Nov. 15, 2017 | Oct. 19, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Subsequent Event [Line Items] | ||||||||
Cash distributions declared per unit (in dollars per share) | [1] | $ 0.3025 | $ 0.2630 | $ 0.8768 | $ 0.762 | |||
Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Cash distributions declared per unit (in dollars per share) | [1] | $ 0.3025 | ||||||
Subordinated Units | ||||||||
Subsequent Event [Line Items] | ||||||||
Units outstanding (in shares) | 29,163,121 | 29,163,121 | 29,163,121 | |||||
Subordinated Units | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Units outstanding (in shares) | 29,163,121 | |||||||
Conversion ratio | 100.00% | |||||||
[1] | Represents the cash distributions declared during the month following the end of each respective quarterly period. See Note 16. |